10-K

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

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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 number: 000-28229

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

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

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

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

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

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

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

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

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

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

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

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

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

The aggregate market value of the registrant's voting and non-voting common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate), as of the last business day of the registrant's most recently completed second fiscal quarter was $125.0 million.

As of February 28, 2009, the registrant had 48,638,148 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Certain information required in Part III of this Annual Report on Form 10-K is either incorporated from the Registrant's Definitive Proxy Statement for the Registrant's 2009 Annual Meeting of Stockholders or from a future amendment to this Annual Report on Form 10-K, in either case to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

CALIPER LIFE SCIENCES, INC.
FORM 10-K
For the Fiscal Year Ended December 31, 2008

TABLE OF CONTENTS

		Page
	PART I	1
Item 1.	Business	1
Item 1A.	Risk Factors	25
Item 1B.	Unresolved Staff Comments	41
Item 2.	Properties	42
Item 3.	Legal Proceedings	42
Item 4.	Submission of Matters to a Vote of Security Holders	44
	PART II	45
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6.	Selected Financial Data	46
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	48
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 8.	Financial Statements and Supplementary Data	69
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	69
Item 9A.	Controls and Procedures	69
Item 9B.	Other Information	71
	PART III	72
Item 10.	Directors, Executive Officers and Corporate Governance	72
Item 11.	Executive Compensation	72
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13.	Certain Relationships and Related Transactions and Director Independence	72
Item 14.	Principal Accountant Fees and Services	72
	PART IV	73
Item 15.	Exhibits and Financial Statement Schedules	73
Signatures		79

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

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

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

PART I

Item 1.    Business

Overview

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

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

        We presently offer an array of products and services, many based on highly enabling proprietary technologies that address critical experimental needs in drug discovery and pre-clinical development, and related processes including drug formulation and quality control. Our technologies are also enabling for other life sciences applications beyond drug discovery, such as environmental-related testing, and in applied markets such as agriculture and forensics. We also believe that our technology

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platforms may be able to provide ease of use, cost and data quality benefits for certain in vitro and in vivo diagnostic applications.

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

Market Opportunity

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

        The pharmaceutical and biotechnology industries faces intense competitive and regulatory pressure to more effectively discover and deliver safe new drugs. The regulatory bodies seek to improve the drug approval process to ensure that the right drugs are approved as quickly as possible and drugs with dangerous side-effects are not brought to market. Governments want cost-effective drugs for their populations. As highlighted in the FDA Critical Path Initiative, new research methods and better experimentation models are essential to improve predictability and efficiency along the long and expensive path leading from discovery in the laboratory to commercially available drugs. We believe our solutions directly enable efficiencies derived from improved quality of data, novel biological insights, cost-effective experiments and better translation of early stage experimentation into expected results in the clinic.

        We believe that the combination of our proprietary in vivo imaging and in vitro microfluidic technologies along with our automation expertise address these key research needs. We also believe that our technologies offer insights that cannot be obtained through other means, exceptional data quality and productivity advantages, and that the portfolio of solutions we provide is a novel foundation to offer a highly correlated suite of products and services that should result in earlier, clinically relevant insights in the drug discovery process.

        More specifically, our products and services are designed to enable researchers performing drug discovery functions such as in vitro and in vivo screening and profiling of compounds against disease targets, lead optimization, toxicology, biomolecule separation and quantification, sample preparation and cell-based assays (which are the various steps that are typically used to identify, advance and validate potential preclinical drug candidates) to reduce costs, increase data quality and standardize efficient analytical techniques. We also provide solutions for drug dosage and formulation testing.

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

        We believe that our in vivo product and service offerings allow researchers unprecedented visibility into molecular level biological processes inside living animal models. Single animals can be studied over a period of time to track, for example, disease progression or the effect of a drug candidate compound.

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Conventional technology requires a larger population of animals and the animals would have to be sacrificed at various time points to allow them to be invasively examined. Further, since our proprietary imaging technology is highly sensitive, we can enable researchers to see just a few cells of interest within the living animal model. This provides enabling capabilities in a variety of therapeutic areas including cancer, for example, where metastases can be detected well before conventional methods allow. Light Producing Transgenic Animal (LPTA) models can be engineered to allow detection of biological events of interest at the molecular level, such as gene expression, and this level of direct insight goes far beyond what can be determined from a test tube experiment.

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

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The Imaging business is focused on preclinical imaging, where Caliper holds a global leadership position in the high growth optical molecular imaging market. Principal activities of this business area include the expansion of the IVIS imaging instrument and related reagent product lines, development of new therapeutic area applications and facilitating additional imaging modalities.

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

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CDAS is responsible for expanding drug discovery collaborations and alliances, and increasing sales of drug discovery services. The focus of CDAS is to capitalize on market "outsourcing" trends and to maximize the large contract opportunity with the Environmental Protection Agency under its ToxCast screening program.

Technologies

Imaging

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

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

        We have a proprietary method for noninvasive imaging. A key component of this method is the genetic modification of an organism, cell or animal to produce light that can be detected noninvasively when a specific molecular event of interest occurs from within a living animal model. We offer two detection modalities—bioluminescence and fluorescence. Bioluminescence entails inserting the firefly

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gene, luciferase, into the genetic makeup of the animal or cells injected into the animal so when a gene of interest is expressed, the firefly gene is also expressed. The expression of the firefly gene (luciferase), when the right reagent substrate is present, produces light which can be detected through the skin of the animal. The other mode of detection, fluorescence, occurs when an external light source excites a molecule within the animal, causing the molecule to produce its own light at a different wavelength. These fluorescent molecules can be genetically inserted into the animal, or can consist of dye that is injected into the animal or cell line going into the animal. We offer a full line of LPTA models, proprietary cell lines and microorganisms, and reagents to support both bioluminescence and fluorescence based research.

Microfluidics

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

Features of LabChip System

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

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

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

Key Benefits of LabChip Systems

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Improved Data Quality and Accuracy.  Our LabChip systems are designed to produce data that are more clear, accurate, consistent and reproducible. We achieve this by reducing the opportunity for human error through increased automation, reducing the variability caused by the use of multiple instruments through integration of an application on a single system, and establishing a highly-controlled environment inside the chip that ensures consistent processing of samples. Further, the microfluidic environment can enable expanded analytical capabilities in the workflow. For example, biochemical screening assays typically call for fast measurements of a complex experimental mixture that contains the molecules of interest as well as other materials.

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Reducing the volume size of the experiment allows for rapid separation and measurement of individual molecular species in the test mixture, which in turn enhances the accuracy of the overall result. With higher quality data, our customers can make better decisions earlier in the drug discovery and development process. This enables our customers to avoid the time and expense of performing additional analyses and experiments on "false positive" results from their primary screening experiments.

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

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

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

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

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

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

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database of primary screening data that could ultimately be mined by other scientists within the organization who are interested in a particular compound/target interaction.

Automation and Liquid Handling

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

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

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

Genetically Modified Animals

        Additionally, through CDAS, comprised of our NovaScreen Biosciences and Xenogen Biosciences subsidiaries, we offer to biopharmaceutical companies and biomedical researchers animal production and phenotyping services to create both traditional and bioluminescent transgenic animal models to test the effects of a drug on, or the role of a gene or protein in, these relevant model systems. Whereas previously, biopharmaceutical companies tended to perform all research and development in-house, there is a trend in recent years to focus in-house research and development departments on core competencies, and to outsource specific technologies and products to specialized service providers and vendors. As a result, a large industry segment has formed in recent years to deliver various specialized technologies and services to biopharmaceutical companies. Over the years, our scientists have offered many of these specialized technologies, including the creation and phenotypic characterization of transgenic and gene knockout animals, in vivo evaluation of compounds at various stages of development (including repositioning of existing drugs for new therapeutic uses), and utilization of molecular imaging to perform biodistribution, drug delivery and/or drug efficacy studies. Specifically, the technology most relied upon for target validation within the pharmaceutical industry today is gene knockout technology in concert with comprehensive phenotypic analysis. Genetically engineered mice can be highly informative in the discovery of gene function and pharmaceutical utility of a potential drug target, as well as in the determination of the potential side effects associated with a given target. Aside from whether a gene is a good drug target, genetically engineered animals also provide invaluable models to assess the pharmacology, and increasingly the toxicology, of drug candidates, making them well-accepted validation models. CDAS' experience includes creating and characterizing these types of animal models, creating transgenic animal models, and producing thousands of unique genetically-modified lines for academic, government and commercial customers.

Products and Services

        The following discussion summarizes our products and services portfolio as of December 31, 2008.

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Imaging Systems

        IVIS Imaging Systems and Living Image Software.    Our IVIS imaging systems are the leading preclinical optical molecular imaging solution. IVIS imaging systems are an integrated instrument solution for the researcher, at the core of which are a highly sensitive camera, optimized optics for high sensitivity detection of light produced from within animal models, and specialized software to capture and analyze images of the light producing animals. Caliper IVIS systems enable both bioluminescence and fluorescence detection, a useful combination of capabilities that enables a broad range of research. The original IVIS system was introduced in 2000, and since then, new models have been introduced that offer assorted new features and benefits, including higher throughput and sensitivity. The throughput, image resolution and analytical capabilities differ by IVIS model, and address different end user needs. From the leading optical imaging platform for in vivo analysis, IVIS systems are supported by a range of practical accessories developed through experience in research laboratories worldwide. IVIS optical imaging systems offer advantages, including ease of use, higher throughput and no radioactivity, all in a reasonably priced instrument platform. Further, Caliper's Living Image software and mouse handling accessory items facilitate efficient workflows for animal studies. Our portfolio of imaging systems includes the following:

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

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

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

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

        Method Licenses.    We control fundamental method patent rights that we provide to our customers covering certain methods of optical imaging. Commercial customers pay us a license fee for the right to practice our proprietary optical imaging methods.

        IVIS Options and Accessories.    We offer numerous options and accessories to expand our IVIS workstations, which are sold separately from the imaging systems. Our standard accessory package includes a calibration unit to ensure the overall performance and accuracy of the light sources used in the system as well as a small animal holding unit. We also offer an anesthesia accessory package, which

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is designed to work with all of our IVIS imaging systems. Our anesthesia package integrates a gas delivery system into the imaging chamber, so that mice or other small animals can be anesthetized when placed in the IVIS imaging system, thus minimizing gas exposure to lab personnel. We also provide an electrocardiograph monitoring accessory to monitor animal heart activity during imaging.

        Bioware Products—Light-Producing Cells and Microorganisms.    Our Bioware lines of light-producing cells and microorganisms enable researchers to analyze the spread and treatment of cancer and infectious diseases, as well as to study immunology. In April 2008, we introduced Bioware Ultra cell lines. Bioware Ultra cell lines are 10 to 100 times brighter than cell lines created using traditional methods, which allows researchers, for the first time ever, to detect a single cancer cell in an animal via noninvasive in vivo imaging. We currently offer approximately 29 lines of light-producing microorganisms, including E. coli, Pseudomonas, Salmonella and other gram negative bacteria, as well as Staphylococcus aureus, Streptococcus pneumonia and other gram positive bacteria. We have also developed approximately 16 tumor cell lines for breast, melanoma and prostate cancer. In addition, we are able to create custom light-producing microorganisms and tumor cell lines in accordance with the needs of our customers. All of our Bioware products are optimized to work with our IVIS imaging systems.

        LPTA Models.    Our LPTA models are mouse models that have been genetically altered to incorporate the firefly gene, luciferase, into pathway-specific model animals that enable researchers to analyze gene expression, protein activity and disease progression. We currently have over 40 types of commercially available, therapeutically-relevant LPTA models designed to assist researchers in the areas of metabolic diseases and liver failure, inflammation and drug metabolism. We are developing and in-licensing other types of LPTA models for use in the areas of cardiovascular disease, diabetes, cancer, inflammation, metabolic disease, neurodegeneration and toxicity. In addition, we are able to create customized LPTA models in accordance with customer specifications. All of our LPTA models are optimized to work with our IVIS imaging systems.

        Reagents.    We offer several types of reagents for use in connection with our Bioware products and LPTA models. Our offerings include luciferin, a chemical compound that is introduced into cells and organisms to produce bioluminescence, and XenoFluor fluorescent labeling kits for fluorescent imaging.

Microfluidics Systems

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

        LabChip EZ Reader, EZ Reader II and ProfilerPro Kits.    The EZ Reader systems and ProfilerPro reagent kits provide a convenient, affordable approach to turnkey kinase profiling and screening and mechanistic studies for a broad range of enzymatic targets which includes phosphodiesterases, histone deacetylases, proteases, phosphatases, G-protein coupled receptors (GPCRs) and many other target classes. In particular, kinases are an important class of drug discovery targets since they have been shown to play a role in cancer and cardiovascular disease, as well as other diseases. A typical kinase drug development program will focus on finding lead compounds that inhibit a particular kinase thought to play a role in the disease being studied. As scientists learn more about the human "kinome," the collective term for the 518 different kinases found in the human body, they also are becoming increasingly concerned about the interactions of lead compounds on non-target kinases, and

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the potential adverse side effects resulting from these interactions. As a result, selectivity or "profiling" screens, where lead compounds are screened against a representative group of human kinases, are increasingly becoming a routine part of drug discovery programs. Our ProfilerPro kinase panel plate kits presently consist of a representative 96 kinases that are pre-dispensed into 384-well microplates, and the library continues to grow. This diverse set of kinases spans the human kinome, and is highly relevant in a variety of therapeutic research areas including oncology, the central nervous system, cardiovascular disease, inflammation and diabetes.

Automation and Liquid Handling Systems

        Caliper Sciclone.    Our Caliper Sciclone Automated Liquid Handling (ALH) series features interchangeable 96- and 384-channel pipetting heads that can pipette and dispense volumes from 100 nanoliters to 200 microliters into and out of standard laboratory testing microplates. The Caliper Sciclone liquid handler offers multiple accessories such as an independent 8-channel pipettor for single-well access, and bulk reagent dispense modules for efficient reagent broadcasting. Other available accessories include the Sciclone gripper, microplate shakers, a positive pressure filtration system, and temperature-controlled locators. The control software enables ease-of-use capabilities and supports 21 CFR Part 11 compliance, an important regulatory requirement for researchers developing drugs. The Caliper Sciclone liquid handler can be used as a standalone instrument, or integrated in a more complete system that incorporates automated microplate carriers such as our Twister robot, and other analytical instruments.

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

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

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

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

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

Services

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

        Contract Research and Transgenic Animal Services.    We perform research projects and studies for customers on a contract basis, including in vivo compound profiling and animal model research and development. In addition, we provide professional services for the production of transgenic and gene knockout animals. We have created a portfolio of transgenic animals comprising over 9,000 unique lines proprietary to our clients for use by researchers in a wide range of research and drug discovery and development areas.

        Most of this work entails contracts for which the performance extends over multiple years. For example, we have collaborative research agreements with Pfizer, Bristol-Myers Squibb and other companies to characterize the physiological effects associated with the loss of function of a single gene. Multi-year agreements such as these allow us to utilize our in vivo serial phenotyping compression technology (SPCT) to interrogate the functional profile of knockout mice by "knocking out" specific genetic targets in mice. Over the years, the phenotypic characterization of genetically-modified mice, when compared to non-modified control groups, using SPCT has produced extensive data about numerous drug discovery targets and has contributed to timely and cost-effective decision-making. CDAS has phenotypically characterized over 150 gene knockout lines of mice for Pfizer.

        CDAS' phenotyping program includes over 85 standardized and validated bioassays, or challenge assays, designed to profile key physiological pathways associated with various disorders, including allergic disorders, arthritis, cardiovascular diseases, diabetes, immunology/inflammation, neuron-degeneration, obesity, osteoporosis, pain, psychiatric disorders, sexual health, and urological disorders. More importantly, CDAS' proprietary methodology allows our scientists to perform multiple assays on a group of animals, maximizing the data set per animal without compromising data integrity, resulting in fewer animals used, faster timelines and significantly improved cost economics.

        In addition, CDAS entered into a 10-year animal production agreement with the National Institute of Environmental Health Sciences (NIEHS) in September 2007. This multi-year agreement focuses on the development of novel genetically-modified animal models, either via gene addition (i.e., transgenic mice) or gene targeting (i.e., gene knockout mice).

        Drug Discovery and Development Services.    Through CDAS, we are also able to provide innovative drug discovery and development services designed to improve the productivity, accelerate the pace and reduce the cost of pharmaceutical research and development. CDAS develops and offers a wide range of primary and secondary screening, profiling and assay development services to major pharmaceutical, biotechnology and academic research institutions worldwide. In addition to its core screening and assay development services in pharmacology, CDAS provides in vitro ADME/TOX services. We also offer screening, pharmacological testing and database development to government agencies such as the National Institutes of Health (NIH), in particular, the National Institute on Drug Abuse (NIDA). In

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addition, we have developed a content database and pharmacoinformatics tools that provide statistical predictability in the drug discovery process.

        Environmental Testing.    Under the U.S. Environmental Protection Agency's ToxCast program, CDAS was awarded a contract to assist the EPA in developing new approaches to identify toxic environmental chemicals. Under this contract, CDAS will test compounds provided by EPA through up to 240 different in vitro screening assays for molecular targets that may potentially play a role in mechanisms of toxicity in humans or other animals. During 2007 and 2008, screening was performed by CDAS for the first set of 320 chemicals from EPA. These screening data will be used to create a database and build predictive models for identifying toxicity risk profiles of chemicals that may be released into the environment. An ultimate goal of the ToxCast program is to improve the efficiency and reduce the cost of regulatory review and approval of EPA-regulated chemicals through use of predictive in vitro assays validated under the ToxCast program to supplement or replace current regulatory processes based on animal testing.

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

Sales and Marketing

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

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

        Distributors.    We work with local distributors in certain markets where we do not have a direct presence. We currently have over 40 distributor arrangements covering countries located in Africa, Europe, the Middle East, the Pacific Rim, Scandinavia and South America. Under our distribution agreements, most of the distributors assume responsibility for the installation and post-sales support of systems. In 2008, sales through distributors comprised approximately 13% of our total sales.

        Caliper Driven Program.    Our Caliper Driven program is an important component of our business strategy and is complementary to our direct sales and distribution network activities as it enables us to extend the commercial potential of our LabChip and advanced liquid handling technologies into new industries and new application areas through collaboration with experienced commercial partners. Under this program, we supply liquid handling products, microfluidics chips, and other products on an OEM (original equipment manufacturer) basis, and in certain situations, provide product development

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expertise and services to our commercial partners, who then typically integrate an application solution and market it to their end customers. In addition, as part of our Caliper Driven program, we license our patent estate to other companies for various applications. We view out-licensing under our Caliper Driven program as a way for us to extend our technologies into certain application areas that we do not have a present strategic intent to address directly, or that may require the greater technical, marketing or financial resources of our licensing partner in order to obtain more rapid adoption of our technology in a particular application area. By using direct and indirect distribution, and out-licensing our technology under our Caliper Driven program, we seek to maximize penetration of our products and technologies into the marketplace, and to position us as a leader in the life sciences tools market.

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

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

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

Customers

        Our current customers include a majority of the world's leading biomedical and pharmaceutical companies, prestigious not-for-profit research institutions and other life sciences vendor companies who incorporate our technology and products into their products. Approximately 58% of our total revenues for 2008 were derived from customers in the United States. See Note 17 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for revenues from customers and long-lived assets attributable to geographic areas outside of the United States. During 2008, no single customer accounted for 10% or more of our total revenue.

        We have typically experienced higher revenues in the second half of our fiscal year as a result of the capital spending patterns of our customers. In addition, our revenue trends may be affected by variations in grant funding, especially among government and other not-for-profit research institutions, such as academic institutions, and customer budget cycles. For example, in the biomedical research community, grant proposals are typically due in October, February and June with funds delivered the following June, October and March, respectively. Due to the grant cycle, we may achieve higher revenues in the second and fourth quarters.

Backlog

        For a portion of our sales, we manufacture products based on our forecast of customer demand and maintain inventories in advance of receipt of purchase orders. Our net sales in any given quarter depend upon a combination of (1) orders received in that quarter for shipment in the same quarter, (2) shipments from our backlog of orders from previous quarters, and (3) recognition of revenues that

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had been previously recorded as deferred revenue pursuant to our revenue recognition policy. Our products are typically shipped within ninety days of purchase order receipt. As a result, we do not believe that the amount of backlog at any particular date is indicative of our future level of sales in any succeeding quarter. The level of backlog at December 31, 2008 was $7.4 million. In our backlog, we include only the total value of open purchase orders for products and services that management has concluded have a reasonable probability of being delivered over the subsequent twelve-month period. This amount specifically excludes deferred revenue, and products and services to be provided in the future pursuant to terms of contractual agreements for which we have not yet received purchase orders.

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

Research and Development

Research and Development Infrastructure

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

Technology Research

        Today we have ongoing core technology research and applied product development efforts in several areas:

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

        Chip Manufacturing.    We continue to seek ways to improve the yield and decrease the cost of manufacturing our microfluidic chips, and also continue to explore novel fabrication techniques and the use of new materials, including plastic, that offer functional advantages, such as superior optical features or lower manufacturing costs. Plastic devices potentially offer cost advantages and can offer favorable surface chemistry or design features for some applications. One area in which we seek continuous improvement is micromachining technology for precisely attaching capillaries to our sipper chips. In automated experimentation, the number of these capillaries governs the level of throughput. Accordingly, we have developed high-yield fabrication methods to enable us to cost-effectively manufacture chips with many capillaries. Another important area of development is surface chemistry—in particular, controlling the reproducibility of channel surface characteristics in our LabChip products.

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

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

        Liquid Handling and Automation Instrument Manufacturing and Software Design.    Our skilled electrical engineers, optical engineers, mechanical engineers, product designers and software engineers create new liquid handling and automation instruments and software that are designed to optimize liquid handling and automation of life science laboratory applications. Software engineers write computer programs to manage tasks such as controlling chip functionality, collecting data, communicating between different instrument modules and communicating between our instruments and those of other manufacturers.

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

        Our research and development expenses for the years ended December 31, 2008, 2007, and 2006 were approximately $19.9 million, $24.8 million and $24.6 million, respectively. As a percentage of revenues, we expect research and development spending to decrease in the future to the extent that our revenues grow, and as we slow the pace of discretionary spending on research programs by focusing on those opportunities with maximum commercial viability, and sharing the funding of R&D programs with our partners.

Manufacturing and Supply

        All of our instrument manufacturing is performed in our Hopkinton, Massachusetts manufacturing facility, which is ISO 9001:2000 compliant. The International Standards Organization, or ISO, sets international standards for quality in product design, manufacturing and distribution.

        We manufacture some subassemblies, and other components are made to our specifications by outside vendors. To ensure the quality and on-time delivery of parts and subassemblies, we track our

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top suppliers and score them on a monthly basis. The subassemblies are inspected and tested before being placed into final product assemblies. Production cycle times range from several hours to five days for more complex workstations.

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

        We manufacture all of our chips in a Class 1000 clean room facility in Mountain View, California. We are ISO 9001:2000 compliant for the development, manufacture and distribution of our chips and reagents. We contract with third parties to supply raw materials, component parts and sub-assemblies used in our chips and reagents kits. For a discussion of the methods we use to manufacture our chips see the sections above titled "Technologies," "Products and Services" and "Research and Development."

        We use OEM providers for various parts of the imaging systems including the cameras, boxes, certain subassemblies, filters and lenses. We rely on two primary camera vendors to provide cameras for all of our IVIS imaging systems, one of which is under a supply agreement as of December 31, 2008.

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

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

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

Animal Production

        Our CDAS in vivo operation in Cranbury, New Jersey, houses our animal production facility including a large barrier animal vivarium that is accredited by the Association for the Assessment and Accreditation of Laboratory Animal Care, or AAALAC, and has an Assurance of Compliance with OLAW (Office of Lab Animal Welfare). In this Specific Pathogen Free (SPF) facility, we perform genetically modified animal production, characterization of genetically modified animals (phenotyping), and in vivo compound profiling. We ship animals to our clients and provide in vivo research capabilities to our customers from this facility. We have scientists and animal resources personnel specially trained

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in animal care, handling, and science who provide services to our customers and support our internal needs. Proprietary animal strains that are distributed non-exclusively are shipped from the Cranbury facility. In addition, some of the strains most widely used by our customers can also be housed and distributed by one of two outside vendors, Charles River Laboratories or Taconic. Proprietary animal strains are also preserved as frozen embryos which can be used to regenerate each strain in the event of a disease outbreak.

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

        Each facility has individual environmental controls, environmental monitoring systems, as well as a veterinary consultant to assist us in monitoring the health of our animal population.

Reagents and Bioware

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

Competition

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

        Imaging.    We compete with conventional, non-imaging based approaches such as using mechanical calipers to measure tumor size, invasive surgical techniques, as well as with other molecular imaging technologies applied in the preclinical arena, including modalities such as PET, MRI, x-ray, CT, SPECT and ultrasound, which utilize the penetrating radiation of positrons, radio waves, x-rays, gamma rays and sound. Most of these technologies require operation by a highly trained technician. In addition, some are limited by the need for radioactivity and concomitant shielding, storage and disposal issues. Certain of these technologies image anatomy, rather than molecular events. By comparison, our in vivo molecular bioluminescent and fluorescent imaging methods involve optical imaging approaches that provide molecular level insight, are generally easier to perform, are higher throughput and require no radioactive substances.

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

        Numerous companies sell cameras or camera systems capable of certain forms of optical imaging, including Carestream, Berthold Detection Systems GmbH, Hamamatsu Photonics, Olympus

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Corporation, Roper Scientific, Inc., Biospace, VisEn Medical and CRi, Inc. While certain of these cameras share certain similar features and imaging capabilities of our IVIS imaging systems, none of those companies has the right to sell their cameras for in vivo imaging methods claimed by our patents, which includes patents we exclusively license from Stanford University, nor do they have rights to our instrumentation patents.

        Automation and Liquid Handling Systems.    There are many companies providing competitive liquid handling products, automation products and integration services for applications such as high throughput screening, ADME and Active Pharmaceutical Ingredient (API) analyses. We believe the primary competitive factors in these markets are productivity enhancement, breadth of applications, accuracy, ease-of-use, price, performance, product reliability and service support. Direct and indirect competition for these types of products and services comes from many companies, including Beckman Coulter, BioTek Instruments, CyBio, Hamilton, Innovadyne, Gilson, LabCyte, MDS Inc., PerkinElmer, Tecan, Thermo Fisher Scientific, Tomtec, Velocity 11 (now owned by Agilent) and Symyx.

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

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

        LabChip Electrophoresis Separations.    We compete with companies that supply both traditional gel technologies, capillary electrophoresis and more contemporary microfluidic technologies, for gel electrophoresis separations for proteins, DNA and/or RNA. We believe the primary competitive factors in these markets are cost per sample analyzed, throughput and productivity enhancement, data quality, ease of use and service support. Competition for these types of products and services comes from many companies, including Agilent, Bio-Rad Laboratories, General Electric, Beckman Coulter, Qiagen and Invitrogen (now Life Technologies). In 2008, Shimadzu Corporation introduced its MCE-202 MultiNA microchip electrophoresis system for performing DNA and RNA separations. We believe the MCE MultiNA system infringes a number of different patents owned or controlled by Caliper, and in January, 2009 we initiated a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. In this suit, Caliper alleges that Shimadzu's MCE-202 MultiNA instrument system infringes 11 different U.S. patents owned by Caliper. See the section titled "Legal Proceedings" elsewhere in this Annual Report on Form 10-K.

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

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

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

        Creation of Genetically-Modified Animals.    We also compete with companies who produce genetically-modified animals (i.e.,  transgenics or gene knockouts), including Lexicon Pharmaceuticals, genOway, Ingenious Targeting Laboratory, Taconic-Artemis and OzGene. All of these companies use animal models based on knockout mice technology. Lexicon, however, primarily focuses on developing its own pipeline of therapeutic products, rather than providing in vivo animal products and services to third parties. One other company, Deltagen, has re-organized under Chapter 11 and now offers access to previously made gene knockout models by providing embryonic stem (ES) cells. We believe that, for certain applications, the combination of our genetically-modified animal models with our in vivo optical imaging technology provides more predictive data than our competitors can offer. Additionally, none of these companies offers a complete package of instrumentation, reagents and applications for use in accelerating preclinical development.

        Phenotyping.    Although many pharmaceutical companies perform phenotyping services internally, only a small number of companies offer phenotypic analysis of animal models on a fee-for-service basis, including Jackson Laboratories, Taconic Farms, MDS Inc., PsychoGenics, Inc., Charles River Laboratories, and RIKEN Yokohama Institute-Genomic Sciences Center. However, we believe that Xenogen Biosciences, now part of CDAS, offers a greater breadth and scope of pharmacologically-validated bioassays and challenge assays. Additionally, we believe that the proprietary nature of our phenotyping program offers customers services that use fewer mice, and therefore are more cost-efficient, than those offered by competitors or those available to large pharmaceutical companies from internal resources.

        In Vivo Compound Profiling Analysis.    In addition to those competitors that conduct therapeutically-focused or comprehensive phenotypic analysis of genetically-modified animal models, there are other companies that have developed scientific platforms for the in vivo characterization of lead compounds, drug development candidates and/or clinical development candidates. This chemical characterization platform is known by various designations, but primarily as compound/drug repositioning, repurposing and/or indications discovery. Competitors in the in vivo chemical characterization space consist of those that focus primarily in one or a few therapeutic areas, such as Sention, Inc., Vela Pharmaceuticals, Inc., Bionaut Pharmaceuticals Inc., ChemGenex Therapeutics Inc., and CombinatoRx Inc., and those that have designed and validated comprehensive programs, such as Ore Pharmaceuticals, MDS Pharma Services, Covance, and Melior Discovery, Inc.

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        In many instances, our competitors have or may have substantially greater financial, technical, research and other resources and larger, more established marketing, sales, distribution and service organizations than we do. Many of our competitors also have greater name recognition than we do, and may offer more favorable pricing as a competitive tactic. In addition, given the larger scale of their operations, many of our competitors spend more on research and development than we do. Accordingly, we cannot be sure that our competitors will not succeed in developing or marketing technologies or products that are more effective or commercially attractive than our products or that would render our technologies and products obsolete. Also, we may not have the financial resources, technical expertise or marketing, distribution or support capabilities to compete successfully in the future. Our success will depend in large part on our ability to maintain a competitive position with our technologies.

Intellectual Property

        We consistently seek patent protection for our key imaging, microfluidics and other technologies. As of December 31, 2008, we owned approximately 300 issued U.S. patents and 100 pending U.S. patent applications, some of which derive from a common parent application. We are also the exclusive licensee of approximately 100 U.S. patents. Foreign counterparts of many of these patents and applications have been filed and/or issued in one or more other countries. We also rely upon trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our competitive intellectual property position. Our success will depend, in part, on our ability to obtain patent protection for our products and processes, to preserve our copyrights and trade secrets, to operate without infringing the proprietary rights of third parties, and to acquire licenses to enabling technology and products. In addition, U.S. patents filed since 1995 generally have a term of 20 years from the date of filing. In the life sciences industry, it often takes several years from the date of filing of a patent application to the date of a patent issuance, often resulting in a shortened period of patent protection, which may adversely affect our ability to exclude competitors from our markets.

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

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

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

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chip-based assay chemistries and methods;

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chip-compatible sample access;

•

software for control of microfluidic based systems and data analysis;

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chip manufacturing processes;

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analytical and control instrumentation; and

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analytical system architecture.

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

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

        We license several patents from third parties that are important to our imaging business. Our core imaging patents and related applications are licensed from Stanford University on an exclusive basis. The license is worldwide, royalty-bearing and includes the right to grant sublicenses. The term of this license is for the life of the patents resulting from the applications, which do not begin to expire until 2014. One of the patents that we have licensed from Stanford covering our methods of in vivo optical imaging was subject to a re-examination proceeding before the U.S. Patent and Trademark Office (USPTO). The re-examination concluded in 2004, and the Patent and Trademark Office issued a re-examination certificate for that patent with narrowed claims. Such narrowed claims do not affect our current licenses or business. Another one of the in vivo optical imaging patents we license from Stanford is currently the subject of a re-examination proceeding with the USPTO that was requested by a third party in 2007. While this re-examination process is still ongoing, on February 18, 2009, the USPTO issued an "Action Closing Prosecution," in which the USPTO rejected the claims of the patent under re-examination. We intend to file a response to the USPTO's rejection of the claims contained in the '851 patent arguing that certain of the amended claims of the '851 patent should be allowed by the USPTO.

        As discussed in Note 10 of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, in 2006 Stanford raised an issue with us regarding the scope of imaging products that are subject to the royalty provisions of the Stanford license agreement. We believe that Stanford's interpretation of the license agreement is not correct. However, as a result of Stanford's view of the license agreement, the parties may amend the agreement to change the royalties we pay to Stanford for future sales.

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

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

        Patents relating to the production of genetically-engineered animals by using gene-targeting methods have been licensed from Medarex, Inc., successor-in-interest to GenPharm International, Inc., since 1991. This license is non-exclusive, royalty-bearing and worldwide. Financial terms include a license issue fee, an annual fee that is creditable against earned royalties due, and a milestone fee in

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the event the FDA approves a pharmaceutical product that includes a product produced through practice under the licensed patents. The term of this license is for the life of the licensed patents, which are set to expire in 2014.

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

Environmental Matters

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

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

Government Regulation

        Our products and services are not regulated by any governmental agency. Our subsidiary, Xenogen Biosciences' line of business associated with animal production, however, may, in the future, be subject to various laws and regulations regarding the treatment of animals if the federal Animal Welfare Act, or AWA, is amended. The AWA does not currently apply to rats of the genus Rattus or mice of the genus Mus, bred for use in research, and consequently, we are not currently required to be in compliance with the AWA. Where applicable, the AWA imposes a wide variety of specific requirements on producers and users of research animals, including requirements related to personnel, facilities, sanitation, cage size, feeding, watering and shipping conditions. Although the AWA does not currently apply to our animal production business, we have voluntarily sought and received accreditation by AAALAC, which sets industry standards for care and treatment of animals used in research. In the event that the AWA is amended to include mice or rats within the scope of regulated animals, and consequently, our animal production business, we believe compliance with such regulations would require us to modify our current practices and procedures, which could require significant financial and management resources. We are not currently aware of legislation pending before the U.S. Congress to amend the AWA to cover the mice or rats used by us. In addition, some states have their own regulations, including general anti-cruelty legislation, which establishes certain standards in handling animals. With respect to the products and services we provide overseas, we also are required to comply with foreign laws, such as the European Convention for the Protection of Animals During International

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Transport and other anti-cruelty laws. The Council of Europe is presently considering proposals to more stringently regulate animal research.

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

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

Other Business Risks

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

Employees

        As of December 31, 2008, we had a total of 489 employees, including 82 in research and development, 241 in operations and service, 97 in sales and marketing and 69 in administration and finance. None of our employees is represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relations with our employees to be good.

Executive Officers of the Registrant

        Listed below are our executive officers and key employees as of February 28, 2009. No family relationship exists between any one of these individuals and any of the other executive officers or directors.

E. Kevin Hrusovsky, age 47, was appointed President and CEO immediately following the acquisition of Zymark Corporation, a liquid handling instruments company, by us in July 2003. Prior to the acquisition, Mr. Hrusovsky had served as President and CEO of Zymark since 1996. From 1992 to 1996, Mr. Hrusovsky was Director of International Business, Agricultural Chemical Division, and President of the Pharmaceutical Division, for FMC Corporation, a diversified holding company. From 1983 to 1992, Mr. Hrusovsky held several management positions at E.I. DuPont de Nemours, including North American Sales and Marketing Head, Teflon. He has also served as a board member of the Association for Laboratory Automation since January 2003. He received his B.S. in Mechanical Engineering from Ohio State University, an M.B.A. from Ohio University, and an honorary doctorate from Framingham State University.

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Bruce J. Bal, 50, currently serves as Senior Vice President, Operations, and was appointed to the position of Vice President, Operations and Aftermarket Businesses following the combination of Caliper with Zymark. Mr. Bal joined Zymark in 1997 as Vice President of R&D and Operations. He previously worked at FMC Corporation, a diversified holding company, in the Biotechnology Division as Director of Operations. He has also held a wide range of management positions in his 13 years at E.I. DuPont de Nemours and was General Manager of United States Pollution Control, Inc. in Utah. Mr. Bal received a B.S. in Chemical Engineering from the University of Wisconsin in 1981 and an MBA from Loyola University, Louisiana in 1986.

Enrique Bernal, 70, was promoted to Senior Vice President, In vitro Business Development in May 2008. He was Vice President, Instrument R&D following the acquisition of Zymark. Mr. Bernal joined Zymark in February 1999, prior to which he worked at Galileo Corporation of Sturbridge, Massachusetts, a developer and manufacturer of electron multipliers and optical fiber products, where he was responsible for all engineering functions and product development. Previously, he had spent 29 years at Honeywell Inc. He received a B.S. in Physics from the College of St. Thomas, and a Masters in Physics from the University of Minnesota.

Paula J. Cassidy, 40, was appointed Vice President, Human Resources in November 2005. Ms. Cassidy previously was Vice President, Human Resources at Virtusa, Corp., a global provider of software development and related IT services. In that position, Ms. Cassidy was responsible for all aspects of the human resources function and she established a cohesive and unified global HR practice. Prior to joining Virtusa Corp in 2003, Ms. Cassidy was with Innoveda, Inc., a publicly traded provider of software and services for the electronic design automation industry. Innoveda had facilities all over the world including the United States, Europe, Israel and Asia. Prior to Innoveda, Ms. Cassidy was Vice President, Human Resources for a wholly-owned subsidiary of Synopsys, Inc. Ms. Cassidy started her career in Human Resources at Viewlogic Systems, Inc. and held various management positions while at Viewlogic. Ms. Cassidy holds a bachelors degree from St. Anselm College.

Stephen E. Creager, 55, currently serves as Senior Vice President, General Counsel and Secretary. Mr. Creager joined the company in October 2002 as Associate General Counsel and was appointed to the position of Vice President, General Counsel and Secretary following the combination of Caliper with Zymark. Previously, Mr. Creager was Vice President of Business Development for Tyco Electronics, an operating unit of Tyco International involved in the development and manufacture of electronic components. In this role, he provided the legal support for the business development initiatives of Tyco Electronics, including the acquisition of over 40 businesses. Prior to taking on these business development responsibilities at Tyco Electronics, Mr. Creager served as the General Counsel of Tyco Electronics. Prior to that, Mr. Creager served as Associate General Counsel of Raychem Corporation, a manufacturer of electronic components, from November 1993 until August 1999, when Raychem was acquired by Tyco Electronics. Prior to his experience at Raychem, Mr. Creager was in private legal practice for nine years. Mr. Creager received a B.A. degree from The Evergreen State College, and a Masters of Philosophy degree in economics and a J.D. degree, both from Yale University.

Joseph H. Griffith IV, 34, was promoted to Vice President, Finance in April 2008. He previously served as Corporate Controller since July 2003 having also served as Corporate Controller for Zymark Corporation, which was acquired by Caliper, since 2002. Mr. Griffith was previously employed by Arthur Andersen, LLP in its Boston, MA audit practice from 1997 to 2002. He received his B.S. in Accounting from Villanova University, and is a licensed Certified Public Accountant in the State of Pennsylvania.

William C. Kruka, 48, currently serves as Senior Vice President, Corporate Business Development, and joined the Company in 2002 as Vice President, Business Development. Previously, Mr. Kruka was Senior Manager of Business Development with leading life science tool provider Applied Biosystems

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Group, an Applera Corporation business. In that role, he led the business development initiatives for proteomics, including related mass spectrometry, sample preparation, chromatography and microfluidic technologies. These initiatives included developing strategy, formulating deal structures and negotiating collaborations, licensing deals and divestitures. He also chaired an internal business development council that addressed strategic and operational matters from a cross-functional business and technology perspective. Prior to Applied Biosystems, Mr. Kruka held a number of corporate business development, sales, marketing and administration positions with Applera and its predecessors, PE Corporation and The Perkin-Elmer Corporation, from 1983 to 2002.

Jerome Leclercq, 44, was promoted to Vice President International Research Sales & Aftermarket Service & General Manager International Operations, in August 2008. From March 2007 up to his most recent appointment, Mr. Leclercq previously served as General Manager, EMEA Commercial Operations for Caliper. In the years prior to serving as General Manager EMEA, Mr. Leclercq held positions of increasing responsibility within Caliper and Zymark Corporation, which he joined in October 1987. He received his Masters Degree in Biochemical Engineering from University of Clermont-Ferrand in 1987.

Nicholas C. Mitropoulos, 51, was appointed Vice President North America Research Sales & Aftermarket Service in August 2008. Mr. Mitropoulos joined Caliper as Divisional Vice President of Commercial Operations in August 2007. Prior to joining Caliper, Mr. Mitropoulos served as Vice President of Worldwide Sales for GenomeQuest, Inc., a venture- backed life science software company. From 1988-2005, Mr. Mitropoulos held various management positions, elevating to Vice President of Worldwide Sales for Accelyrs, Inc, a life science scientific software company. Mr. Mitropoulos started his career as a Financial Analyst with GCA Corporation, a leading manufacturer of capital equipment for the semiconductor industry. He received his B.S. and an MBA in Finance and Marketing from Babson College.

David M. Manyak, Ph.D., 56, is currently Executive Vice President, Caliper Discovery Alliances & Services, and joined the Company in 2005 as Executive Vice President, Drug Discovery Services. Previously, Dr. Manyak was Chief Executive Officer of NovaScreen Biosciences, which was acquired in October 2005, since January 1993. Dr. Manyak has more than 20 years of experience in research, financial analysis, and management of biotechnology companies. Dr. Manyak was a biotechnology industry consultant and was co-founder and former Director of GeneMedicine Inc., a gene therapy company that had its initial public offering in 1994 and has since merged to form Valentis Corp. He was previously employed by Merrill Lynch & Co. (from 1985 to 1990) as Vice President, Senior Biotechnology Industry Analyst for Merrill Lynch & Co. and held a similar position with Value Line Inc. (from 1983 to 1985). Dr. Manyak holds a Ph.D. in Zoology/Biochemistry from Duke University and a B.A. from Brown University.

Peter F. McAree, 44, has served as Senior Vice President and Chief Financial Officer since April 2008 after having held the position of Vice President of Finance since 2003. Mr. McAree was Chief Financial Officer of Zymark Corporation from May 2000, until the acquisition of Zymark by Caliper in 2003. From January 2000 through November 2000, Mr. McAree served as Chief Financial Officer of Iconomy.com, Inc., a commerce solutions provider. From January 1999 through December 1999, Mr. McAree was an independent consultant. From January 1997 through December 1998, Mr. McAree served as Executive Vice President and Vice President, Finance at Elcom International, Inc., a commercial distributor of personal computers, and as President of its wholly-owned subsidiary, Elcom Systems. Prior to Elcom, Mr. McAree was Chief Financial Officer of Geerlings & Wade, Inc., a direct marketer of wine, from 1995 through 1996. Mr. McAree began his career with Arthur Andersen, Boston, where he held various positions, most recently as Senior Manager in 1995. He received his B.S. in Accountancy from Bentley College, and is a licensed Certified Public Accountant in Massachusetts.

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Bradley W. Rice, Ph.D., 49, was promoted to Senior Vice President, Systems R&D in May 2008. Dr. Rice had served as the Chief Technical Officer and Vice President of Xenogen since January 2005. From 1999 through 2004, he served as the Senior Director of Imaging R&D and played a key role in developing the suite of IVIS imaging systems. Prior to joining Xenogen, Dr. Rice worked for 15 years as a scientist at Lawrence Livermore National Laboratory developing optical diagnostic instrumentation in the magnetic fusion energy program. Dr. Rice received his B.A. in Physics from Colorado College, M.S. in Electrical Engineering from the University of Wisconsin-Madison, and his Ph.D. in Applied Science from the University of California-Davis.

Mark T. Roskey, Ph.D., 49, currently serves as Vice President, Reagents and Biology R&D, and was appointed to the position of Vice President, Worldwide Marketing following the acquisition of Zymark, where he had held this role since he joined Zymark in December 2001. Prior to that, Dr. Roskey worked for six years at Applied Biosystems, a life sciences company, where he served as Director of Marketing. He has more than 15 years of experience in product research, development and strategic marketing with complex biological solutions and automated instrument systems. Dr. Roskey holds a B.S. in Biology from Framingham State College, a Ph.D. in Microbiology from the University of Notre Dame and completed a postdoctoral fellowship in Molecular Immunobiology at the Harvard Medical School.

Item 1A.Risk Factors

Risks Related To Our Business

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

        We anticipate that our existing capital resources, including amounts available under our credit facility, together with the revenue to be derived from our commercial partners and from commercial sales of our products and services, will enable us to maintain currently planned operations through at least January 1, 2010. However, this expectation is based on our current operating plan, and our ability to maintain our borrowing base and remain in compliance with various covenants of our bank credit facility, which may change as a result of many factors, including conditions in the market for our products and services as well as the prospect of future acquisitions or other investing activities that could require substantial additional financing. Consequently, we may need additional funding sooner than anticipated. The past year has seen virtually unprecedented turmoil in the world's financial markets, and this turmoil may make it difficult or impossible for us to raise additional capital. Our inability to raise needed capital would seriously harm our business and product development efforts. Alternatively, in the event that we are able to do so, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in dilution to our stockholders.

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

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

        On March 6, 2009, we entered into a second amended and restated 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. Principal borrowings under the credit facility accrue interest at a floating annual rate equal to the prime rate plus one percent if our unrestricted cash held at the bank exceeds or is equal to $20 million, or prime plus two percent if our unrestricted cash held at the bank is below $20 million. Under the credit facility, we are permitted to borrow up to $25 million, subject to a borrowing base limit consisting of (a) 80% of eligible accounts receivable plus (b) the lesser of 70% of our unrestricted cash at the bank or $12 million; provided, that on each of the first three business days and each of the last three business days of each fiscal quarter, our borrowing base is (a) 80% of eligible accounts receivable plus (b) the lesser of 90% of our unrestricted cash at the bank or $12 million. Eligible accounts receivable do not include internationally billed receivables, unbilled receivables, and receivables aged over 90 days from invoice date. The credit facility matures on November 30, 2010. As of December 31, 2008, $14.9 million was outstanding under the previous credit facility. The credit facility serves as a source of capital for ongoing operations and working capital needs.

        The credit facility includes traditional lending and reporting covenants, including certain financial covenants applicable to liquidity and earnings that are to be maintained by us and tested as of the last day of each quarter. The credit facility also includes rights for the bank to accelerate the maturity of the debt, lower the borrowing base or stop making advances, if based upon its good faith business judgment, the bank determines that events or conditions may adversely affect the value of the collateral securing the credit facility or our ability to repay amounts outstanding under the facility. The credit facility also includes a net liquidity clause. Under this clause, if our cash, cash equivalents and marketable securities held at the bank, net of debt outstanding under the credit facility, is less than $0.5 million, the bank will apply all of our accounts receivable collections, received within our lockbox arrangement with the bank to the outstanding principal. Such amounts are eligible to be re-borrowed by us subject to the borrowing base limit described above. The credit facility is more fully discussed in Footnote 9 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

        As of December 31, 2008, we were not in compliance with the covenants under the credit facility. We subsequently received a waiver for the covenant violation. The credit facility also includes several potential events of default that could cause interest to be charged at an annual rate which is two percentage points above the floating rate in effect immediately before the event of default, or, in the event of any uncured events of default, could result in the bank's right to declare all outstanding obligations immediately due and payable, reduce our borrowing base or reduce any additional requested borrowings. Our ability to remain in compliance with applicable loan covenants through the credit facility's maturity in 2010 depends upon our ability to achieve results that are materially consistent with our internal operating plans. If a material adverse change occurs within our business, or we fail to achieve our anticipated operating results, we may become in default of one or more covenants under the credit facility, which would require us to ask the bank to waive the covenants and these waivers may or may not be granted. If such events were to occur, we have no alternative committed sources of capital.

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

        The commercial success of our LabChip products depends upon market acceptance of the merits of our drug discovery and automated electrophoresis separations systems by pharmaceutical and biotechnology companies, academic research centers and other companies that rely upon laboratory

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experimentation. Although our microfluidic drug discovery and automated electrophoresis systems have been marketed and sold commercially for over five years, their accuracy, reliability, ease-of-use and commercial value have not yet gained widespread commercial acceptance. During 2008, we introduced a wholly redesigned automated electrophoresis separations system, the LabChip GX and LabChip GXII, which is intended to replace our LabChip 90 automated electrophoresis separations system. Although the initial market reaction to our new LabChip GX systems has been positive, if these systems do not continue to gain further market acceptance, our revenue may grow more slowly than expected or decline.

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

        Because drug screening and automated electrophoresis separations systems represent substantial capital expenditures, it is important that these systems be capable of performing a wide variety of different types of assays and experiments in order to justify the cost of the systems. We intend to continue to lower the cost of these systems and to develop new versions of our microfluidic-based products with enhanced features and/or lower costs that address existing and emerging customer needs, such as offering a broad range of standardized, easy-to-use assays. In this regard, during 2007 we launched a new LabChip system based on our microfluidic LabChip technology, the EZ Reader instrument system, which is designed specifically to facilitate secondary kinase screening by providing a more highly automated system capable of utilizing our recently launched ProfilerPro reaction ready plates already loaded with required reagents. In addition, as note above, during 2008, we introduced a wholly redesigned automated electrophoresis separations system, the LabChip GX and LabChip GXII, which is targeted at customers with high throughput DNA, RNA and/or protein separations requirements. If the commercial adoption of these existing LabChip products is slower than we presently expect, we may experience a decline in revenue or slow revenue growth and may not achieve or maintain profitability.

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

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

•

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

•

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

•

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

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•

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

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

        Pharmaceutical, biotechnology and life sciences researchers have historically conducted in vivo biological assessment using physical measurement devices such as Caliper's noninvasive surgical techniques, or a variety of imaging technologies, including X-ray, MRI, ultrasound, PET and SPECT. Compared to these other technologies, our noninvasive optical imaging technology is relatively new, and the number of companies and institutions using our technology is relatively limited. We have expanded the fluorescence imaging capabilities of our imaging instruments with the IVIS Spectrum instrument, which we launched in late 2006. We believe the IVIS Spectrum instrument offers the most advanced bioluminescence and fluorescence pre-clinical in vivo imaging capability in the market today. However, the commercial success of all of our IVIS imaging systems will depend upon the continuing adoption of our technology as a preferred method to perform in vivo biological assessment. Such continuing adoption depends upon these products meeting the technical and cost requirements for in vivo biological assessment within the life sciences industry. Widespread market acceptance will depend on many factors, including:

•

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

•

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

•

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

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

        We exclusively in-license from Stanford University a portfolio of patents covering a broad range of methods for in vivo, noninvasive imaging of light generated from within mammals, which portfolio of patents includes, among other patents, U.S. Patent No. 5,650,135 and U.S. Patent No. 7,255,851, which was issued by USPTO in August 2007 based upon a continuation application relating to the '135 patent. The patents in this portfolio prior to the recent issuance of the '851 patent cover broad methods of in vivo imaging of generated light. The '851 patent expanded the scope of this patent portfolio to include in vivo, noninvasive imaging methods based on light sources that are conjugated (or combined) with any of a variety of biocompatible entities and administered to the mammal to be imaged. We actively out-license these patents to entities performing pre-clinical drug discovery and development research. These licenses, in the case of commercial entities, require the payment of fees in order to perform the patented imaging methods. We believe that the expanded patent coverage afforded by the '851 patent should enable us to extend our existing licensing program to a larger group of companies and to increase the revenue we obtain from this licensing program. However, our ability to maintain and increase the revenue we obtain from this licensing program will depend upon our continuing ability to convince researchers of the value of these patented imaging methods, including the optical imaging methods with conjugated probes covered by the '851 patent, as well as our ability to successfully defend the validity of the patents in this portfolio. It is possible that entities will seek to invalidate one or more patents included in this portfolio, either through litigation or through a reexamination process

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with the USPTO to challenge the patentability of the patent claims. For example, in November 2007 VisEn Medical filed a request with the USPTO for an Inter Partes Reexamination of the '851 patent, in January 2008 the USPTO granted VisEn's request for a reexamination of the '851 patent, and in February 2009 the USPTO issued an "Action Closing Prosecution" which rejected the claims of the '851 patent. We intend to file a response to the USPTO's rejection of the claims contained in the '851 patent arguing that certain of the amended claims of the '851 patent should be allowed by the USPTO. However, it is possible that the '851 patent, or one or more of the other patents included in our in vivo imaging patent portfolio, could be held to be invalid or unpatentable, or the scope of their claim coverage could be a narrowed. If this occurs, our revenue from out-licensing this portfolio may decline.

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

        We market our products to pharmaceutical and biotechnology companies and to academic and other biomedical research institutions, and the changes to capital spending policies of these entities could have a significant effect on the demand for our products. These policies vary significantly among different customers and are based on a wide variety of factors, including the resources available for purchasing research equipment, the spending priorities among various types of research companies and the policies regarding capital expenditures. In particular, economic conditions and regulatory requirements faced by pharmaceutical and biotechnology companies have at certain times directly affected their capital spending budgets. In addition, continued consolidation within the pharmaceutical industry, including the cost reductions often implemented during such consolidations, will likely delay and may potentially reduce capital spending by pharmaceutical companies involved in such consolidations. During the past several years, many of our customers and potential customers, particularly in the biopharmaceutical industry, have reduced their capital spending budgets because of these generally adverse prevailing economic conditions, consolidation in the industry and increased pressure on the profitability of such companies, due in part to competition from generic drugs. If our customers and potential customers do not increase their capital spending budgets, because of continuing adverse economic conditions or further consolidation in the industry, we could face weak demand for our products. Similarly, changes in availability of grant money, as well as reductions in the value of university endowments due to recent significant worldwide declines in the value of financial and real estate assets, may impact our sales to academic customers. Developments involving safety issues for widely used drugs, including actual and/or threatened litigation, also may affect capital spending by pharmaceutical companies. Any decrease or delay in capital spending by life sciences or chemical companies or biomedical researchers could cause our revenue to decline and harm our profitability.

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

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

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

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

•

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

•

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

•

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

•

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

•

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

•

decreases in the research and development budgets of our customers;

•

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

•

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

•

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

•

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

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

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

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

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

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

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

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

        Through our Xenogen subsidiary, we were involved in patent infringement litigation with AntiCancer, Inc. for approximately two and a half years until the litigation settled in February 2008. In this patent litigation, AntiCancer had alleged infringement of various patents owned by AntiCancer and requested that the court declare invalid certain of our patents covering methods of in vivo optical

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imaging, and we had alleged AntiCancer's infringement of various of our patents and sought to invalidate AntiCancer's asserted patents. For a description of the settlement reached in this litigation, see the section titled "Legal Proceedings" elsewhere in this Annual Report on Form 10-K. In addition, in order to protect or enforce our patent rights, we may initiate patent infringement litigation against third parties. For example, in January 2009 we initiated litigation against Shimadzu Corporation and its U.S. subsidiary alleging that Shimadzu's importing, marketing and selling of its MCE-202 MultiNA microchip electrophoresis system infringes 11 different U.S. patents owned by us. As another example, as noted above, in November 2007 VisEn Medical filed a request with the USPTO for an inter partes reexamination of U.S. Patent No. 7,255,851, which we exclusively license from Stanford University, and in February 2009 the USPTO issued an "Action Closing Prosecution" which rejected the claims of the '851 patent. We intend to file a response to the USPTO's rejection of the claims contained in the '851 patent arguing that certain of the amended claims of the '851 patent should be allowed by the USPTO.

        These lawsuits and proceedings before the USPTO tend to be expensive, take significant time and can divert management's attention from other business concerns. This risk is exacerbated by the fact that the other parties involved in the lawsuits or USPTO proceedings may have access to substantially greater financial resources than we have to conduct such litigation or proceeding. These lawsuits and proceedings put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Additionally, we may suffer reduced instrumentation sales and/or license revenue as a result of pending lawsuits or following final resolution of lawsuits or USPTO reexamination proceedings. Further, these lawsuits may also provoke these third parties to assert claims against us. Attempts to enforce our patents may trigger third party claims that our patents are invalid. We may not prevail in any of these suits and any damage or other remedies awarded to us, if any, may not be commercially valuable. During the course of these suits, there may be public announcements of results of hearings, motions and other interim proceedings or developments in the litigation. If securities analysts or others perceive any of these results to be negative, such perception could cause our stock price to decline.

        LabChip Electrophoresis Separations.    We compete with companies that supply both traditional gel technologies, capillary electrophoresis and more contemporary microfluidic technologies, for gel electrophoresis separations for proteins, DNA and/or RNA. We believe the primary competitive factors in these markets are cost per sample analyzed, throughput and productivity enhancement, data quality, ease of use and service support. Competition for these types of products and services comes from many companies, including Agilent, Bio-Rad Laboratories, General Electric, Beckman Coulter, Qiagen and Invitrogen (now Life Technologies). In 2008, Shimadzu Corporation introduced its MCE-202 MultiNA microchip electrophoresis system for performing DNA and RNA separations. We believe the MCE MultiNA system infringes a number of different patents owned or controlled by Caliper, and in January, 2009 we initiated a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. In this suit, Caliper alleges that Shimadzu's MCE-202 MultiNA instrument system infringes 11 different U.S. patents owned by Caliper. See the section titled "Legal Proceedings" elsewhere in this Annual Report on Form 10-K.

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

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

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company through, among other things, a possible merger or consolidation of our business into that of another entity.

        Acquisitions involve numerous risks, including the following:

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

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

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

•

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

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

•

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

•

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

•

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

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

•

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

•

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

•

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

•

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

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

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

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

        We have experienced significant operating losses each year since our inception and we expect to incur an operating loss in 2009. As of December 31, 2008, we had an accumulated deficit of approximately $302.4 million. Our losses have resulted principally from costs incurred in research and development and product marketing and from general and administrative costs associated with our operations. These costs have exceeded our cumulative cash proceeds which, to date, have been generated principally from product sales, collaborative research and development agreements, technology access fees, license fees, litigation settlement proceeds and interest income on cash and investment balances. To achieve profitability, we will need to generate and sustain higher revenue than

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we have to date, while achieving reasonable costs and expense levels. We may not be able to generate enough revenue to achieve profitability. We may not achieve or maintain reasonable costs and expense levels. Even if we become profitable, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to achieve profitability within the timeframe expected by securities analysts or investors, the market price of our common stock will likely decline.

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

        We currently derive, and we expect to continue to derive, a significant percentage of our total revenue from a relatively small number of customers. If any one of these customers terminates or substantially diminishes its relationship with us, our revenue could decline significantly. We have contractual arrangements with certain customers that encompass the sale of products, licensing of imaging intellectual property and provision of in vivo services pursuant to agreements that are renewable on an annual or multi-year basis. Failure to renew or the cancellation of these agreements by any one of our larger customers could result in a significant loss of revenue. In addition, in April 2007 we entered into a contract with the Environmental Protection Agency (EPA) to perform in vitro compound toxicity screening pursuant to which the EPA periodically issues task orders to us. If the EPA experiences a reduction in its federal funding, elects not to proceed with the program or elects to reduce the number of compounds to be screened by us pursuant to this contract, our revenue may decline or grow more slowly than we currently expect.

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

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

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

        We may be exposed to future litigation by third parties based on claims that our products infringe the intellectual property rights of others. This risk is exacerbated because there are numerous issued and pending patents in the life sciences industry and the validity and breadth of life sciences patents involve complex legal and factual questions. Our competitors may assert that their U.S. or foreign patents may cover our products and the methods we employ. For example, until February 2008 we were involved in patent litigation with AntiCancer, Inc. in which AntiCancer had alleged that we have infringed certain of its patents. Although this litigation was resolved through a settlement and cross-license agreement between the parties, there can be no assurance that we will be able to settle other infringement claims on a favorable basis in the future. For a description of our settled litigation with AntiCancer, see the section titled "Legal Proceedings" elsewhere in this Annual Report on Form 10-K. Also, because patent applications can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products may infringe. There could also be existing patents of which we are not aware that one or more of our products may inadvertently infringe.

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

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

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

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

Our tax net operating losses and credit carryforwards may expire if we do not achieve or maintain profitability.

        As of December 31, 2008, we had federal and state net operating loss carryforwards of approximately $299.1 million and $102.5 million, respectively. We also had federal and state research and development tax credit carryforwards of approximately $7.9 million and $4.9 million, respectively. The federal net operating loss and credit carryforwards will expire at various dates through 2028 if not utilized. The current remaining state net operating losses have varying expiration dates through 2028.

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

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

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

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

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

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

•

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

•

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

•

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

•

the potential delays and expense of seeking alternative suppliers; and

•

increases in prices of key components.

We face competition from companies with established technologies for in vivo biological assessment, which may prevent us from achieving significant market share for our products.

        We compete with a variety of established technologies for in vivo biological assessment that several competitors and customers may be using to analyze animal models. The most basic of these technologies have remained relatively unchanged for the past 40 years, are well established and are

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routinely used by researchers. We believe it may take several years for all researchers to become fully educated about our in vivo optical imaging technology.

        We believe that in the near term, the market for in vivo biological assessment will be subject to rapid change and will be significantly affected by new technology introductions and other market activities of industry participants. As other companies develop new technologies and products to conduct in vivo biological assessment, we may be required to compete with larger companies that enjoy several competitive advantages, including:

•

established distribution networks;

•

established relationships with life science, pharmaceutical, biotechnology and chemical companies as well as with biomedical researchers;

•

additional lines of products, and the ability to offer rebates or bundle products to offer higher discounts or incentives to gain a competitive advantage; and

•

greater resources for technology and product development, sales and marketing and patent litigation.

        Our principal competitors that use established technologies for in vivo biological assessment include MDS Pharma Services, Ore Pharmaceuticals, Exelixis, Inc. and Lexicon Pharmaceuticals. Each of these companies uses animal models in the area of target validation in drug discovery and utilizes methods of assessment based upon knockout mice as well as other organisms such as fruit flies, worms and yeast. We also face competition from several companies including Carestream Health, Inc., Berthold Detection Systems GmbH, Hamamatsu Photonics, Biospace, Olympus Corporation, and Roper Scientific, Inc., which market systems which may be used to perform optical imaging when accompanied by the appropriate intellectual property licenses. Many of these companies have greater resources than we do. There are also several privately-held companies that have recently begun to market systems that may be used to perform optical imaging with the appropriate intellectual property licenses. At any time, other companies may develop additional directly competitive products that could achieve greater market acceptance or render our products obsolete.

Contamination in our animal populations could damage our inventory, harm our reputation and result in decreased sales.

        We offer a portfolio of transgenic animals and LPTA models for use by researchers in a wide range of research and drug discovery programs and also perform breeding and model validation. We maintain animal facilities in Alameda, California and Cranbury, New Jersey. These animals and facilities must be free of contaminants, viruses or bacteria, or pathogens that would compromise the quality of research results. Contamination of our isolated breeding rooms could disrupt our models, delay delivery to customers of data generated from phenotyping and result in decreased sales. In 2003, one of Xenogen's animal facilities in Alameda was contaminated by a mouse virus introduced through one of our animal vendors. That facility was closed for decontamination, and the most valuable strains were transferred to third party breeders for rederivation so that Xenogen could continue to provide animals to its customers. The decontamination process took approximately three months. A similar contamination occurred again in 2005. Additional contamination would result in inventory loss, clean-up and start-up costs and reduced sales as a result of lost customer orders.

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

        In accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we assess the recoverability of identifiable intangibles with finite lives and other long-lived assets, such as property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying

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value may not be recoverable. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill and intangible assets with indefinite lives from acquisitions are evaluated annually, or more frequently, if events or circumstances indicate there may be an impairment, to determine whether any portion of the remaining balance of goodwill and indefinite lived intangibles may not be recoverable. If it is determined in the future that a portion of our goodwill and other intangible assets is impaired, we will be required to write off that portion of the asset according to the methods defined by SFAS No. 144 and SFAS No. 142, which will have an adverse effect on our reported GAAP net income for the period in which the write-off occurs.

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

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

        Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. With the contemporaneous sales of our PDQ and AutoTrace product lines in the fourth quarter of 2008, which met the criteria for assets held for sale prior to the goodwill impairment test date, we first determined the amount of goodwill ($14.3 million) that was to be allocated to these divestitures based upon a relative fair value basis considering their recent transaction values, and then applied our annual goodwill impairment analysis to the remaining goodwill balance ($66.3 million) which resulted in the determination that the fair value of the entity was less than its carrying value. The second step of the goodwill impairment test involved us calculating the implied goodwill for the entity. The carrying value of the goodwill assigned to the overall business exceeded the implied fair value of goodwill, resulting in a goodwill impairment of $43.4 million, which has been recorded in our results of operations in the fourth quarter of 2008.

        Goodwill is not amortized, but is reviewed for impairment at least annually. The results of this year's impairment test are as of a point in time. If the future growth and operating results of our business are not as strong as anticipated and/or our market capitalization declines further, this could impact the assumptions used in calculating the fair value in subsequent years. To the extent goodwill is impaired in future periods, its carrying value will be further written down to its implied fair value and a

38

charge will be made to our earnings. Such an impairment charge would materially and adversely affect our GAAP reported operating results. As of December 31, 2008, we had recorded goodwill and other intangibles of $22.9 million in our consolidated balance sheet. The goodwill impairment charge is non-cash in nature and does not affect our liquidity, cash flows from operating activities, or debt covenants, or have any impact on future operations. No impairment was identified in fiscal years 2007 and 2006.

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

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

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

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

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

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

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

39

amount of $1.0 million. We may not be able to maintain insurance on acceptable terms, or at all. We could be required to incur significant costs to comply with current or future environmental laws and regulations.

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

        The Animal Welfare Act, or AWA, is the federal law that covers the treatment of certain animals used in research. The AWA currently does not cover rats of the genus Rattus or mice of the genus Mus bred for use in research, and consequently, we are not currently required to be in compliance with this law.

        Currently, the AWA imposes a wide variety of specific regulations that govern the humane handling, care, treatment and transportation of certain animals by producers and users of research animals, most notably personnel, facilities, sanitation, cage size, feeding, watering and shipping conditions. If in the future the AWA is amended to include mice or rats bred for use in research in the scope of regulated animals, we will become subject to registration, inspections and reporting requirements. We believe compliance with such regulations would require us to modify our current practices and procedures, which could require significant financial and management resources.

        Furthermore, some states have their own regulations, including general anti-cruelty legislation, which establish certain standards in handling animals. To the extent that we provide products and services overseas, we also have to comply with foreign laws, such as the European Convention for the Protection of Animals During International Transport and other anti-cruelty laws. In addition, customers of our mice in certain countries may need to comply with requirements of the European Convention for the Protection of Vertebrate Animals Used for Experimental and Other Scientific Purposes. Additional regulations in this area could impact our sales of laboratory animals into signatory countries. Since we develop animals containing changes in their genetic make-up, we may become subject to a variety of laws, guidelines, regulations and treaties specifically directed at genetically modified organisms. The area of environmental releases of genetically modified organisms is rapidly evolving and is currently subject to intense regulatory scrutiny, particularly overseas. If we become subject to these laws, we could incur substantial compliance costs. For example, the Biosafety Protocol, an international treaty adopted in 2000 to which the U.S. is not a party, regulates the transit of living modified organisms, a category that includes our transgenic mice, into countries party to the treaty. As our mice are not intended for release into the environment or for use for food, feed or processing, the treaty imposes only identification, handling, packaging and transport requirements for shipments into signatory countries. However, additional requirements may be imposed on such shipments in the future.

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

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

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

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methods, particularly our use of genetically altered mice and rats, could adversely affect our market acceptance.

Risks Related to Owning Our Common Stock

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

        Our stock has been trading on the NASDAQ Global Market since mid-December 1999. We initially offered our common stock to the public at $16.00 per share. Since then our stock price has been extremely volatile and has ranged, through February 28, 2009 from a high of approximately $202.00 per share on March 2, 2000 to a low of $0.81 per share on December 1, 2008. Our stock price may drop substantially following an investment in our common stock. We expect that our stock price will remain volatile as a result of a number of factors, including:

•

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

•

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

•

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

•

general market volatility for technology stocks.

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

We have been sued, and are at risk of future securities class action litigation.

        In the spring and summer of 2001, class action lawsuits were filed against certain leading investment banks and over 300 companies that did public offerings during the prior several years, including lawsuits against Caliper and certain of its officers and directors as described under Part I, Item 3, "Legal Proceedings." This and other securities litigation could result in potential liability, cause us to incur litigation costs and divert management's attention and resources, any of which could harm our business. In addition, announcements of future lawsuits of this or some other nature, and announcements of events occurring during the course of the current and any future lawsuits, could cause our stock price to drop.

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

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

Item 1B.Unresolved Staff Comments

        None.

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Item 2.    Properties

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

        Our business locations as of December 31, 2008 were as follows:

Location	Principal Activities	Square Footage	Lease Expiration
Corporate Headquarters Hopkinton, MA	—Manufacturing —Research & development —Selling, general and administrative functions	137,000	December 2015; plus two 5-year renewal options
Mountain View, CA	—LabChip Manufacturing	17,000 occupied 36,500 idled	November 2013
Alameda, CA	—Molecular imaging, microfluidic and biology research and development	54,000	March 2019
Cranbury, NJ	—In vivo services business (office, laboratory and vivarium space)	58,000	September 2014
Hanover, MD	—In vitro services business (office and laboratory space)	47,000	February 2017
St. Louis, MO	—Idled facility	25,000 (100% sublet)	April 2010
International	—Sales and service operations —General and administrative functions	Approximately 34,000 in the aggregate	Various through 2011

Item 3.    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

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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 subsequently briefed plaintiffs' motion seeking certification of a new class of plaintiffs; that motion was withdrawn without prejudice on October 10, 2008. It is Caliper's understanding that the parties to this litigation are negotiating a global settlement of the claims at issue in this litigation. The final resolution of this litigation is not expected to have a material impact on Caliper.

        Previously, Caliper was party to a lawsuit brought by AntiCancer, Inc. against Xenogen Corporation (now a wholly owned subsidiary of Caliper) in 2005, which initially alleged that Xenogen infringed five patents of AntiCancer. Xenogen counterclaimed against AntiCancer in 2005, alleging that AntiCancer infringed four of Xenogen's patents. The case was scheduled to proceed to a Markman hearing in May 2008. However, on February 25, 2008, Caliper and AntiCancer entered into a settlement agreement pursuant to which the parties agreed to dismiss with prejudice all claims and counterclaims brought against each other in connection with this litigation. In connection with the settlement agreement, Caliper and AntiCancer also entered into a cross-licensing agreement. Under the cross-license agreement Caliper acquired the right to sublicense AntiCancer's fluorescent protein optical imaging patents to third-parties, alongside Caliper's own portfolio of in vivo fluorescent and bioluminescent optical imaging patents, and AntiCancer acquired the right to sublicense Caliper's optical imaging patents, in the field of fluorescent protein imaging, to a specified annual number of third parties throughout the life of the cross-license agreement, alongside AntiCancer's own fluorescent protein optical imaging patents. In addition, each company received a royalty free license from the other for internal and contract research operations. Under the cross-license agreement, Caliper and AntiCancer will share in any revenues generated by the licensing of their proprietary imaging technologies in the field of fluorescent protein imaging. No other payments will be made for either the settlement or cross-licensing agreements.

        Caliper had been engaged in litigation in New York State Supreme Court with Young & Partners LLC (Young), an investment banking firm that was engaged by Caliper between August 2004 and September 2005, regarding whether Caliper owed a fee to Young for Caliper's acquisition of Xenogen Corporation, which closed in August 2006. The lawsuit was filed by Young in October 2006. Young sought payment of the fee that it believed it was owed, approximately $1.1 million, plus accrued interest, and payment of attorneys' fees. A two-day bench trial regarding this dispute was held on February 7 and 8, 2008. On April 2, 2008, Caliper settled this litigation with Young. 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.

        On January 23, 2009, Caliper filed and served a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. In this suit, Caliper alleges that Shimadzu's MCE-202 MultiNA instrument system, which performs electrophoretic separations analysis of nucleic acids, infringes 11 different U.S. patents owned by Caliper. Shimadzu is not required to file an answer to this complaint until March 17, 2009.

        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

43

made, are reflected within general and administrative expenses in our statement of operations and are included within accrued legal expenses in the accompanying balance sheet. Based on the information presently available, management believes that there are no outstanding claims or actions pending or threatened against Caliper, the ultimate resolution of which will have a material adverse effect on our financial position, liquidity or results of operations, although the results of litigation are inherently uncertain, and adverse outcomes are possible.

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

        No matters were submitted to a vote of security holders during the fourth quarter of the year ended on December 31, 2008.

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PART II

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

Market Information

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

		High		Low
Fiscal 2008:
	First Quarter	$	5.58	$	3.67
	Second Quarter	$	4.15	$	2.59
	Third Quarter	$	4.19	$	2.24
	Fourth Quarter	$	3.12	$	0.81
Fiscal 2007:
	First Quarter	$	6.27	$	5.36
	Second Quarter	$	5.86	$	4.11
	Third Quarter	$	5.93	$	4.48
	Fourth Quarter	$	6.15	$	5.10

Stockholders

        As of February 28, 2009, there were approximately 300 holders of record of the 48,638,148 outstanding shares of our common stock.

Dividends

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

Unregistered Sales of Securities

        There were no sales of unregistered securities during the year ended December 31, 2008.

Issuer Purchases of Equity Securities

        None.

Performance Graph.

        The following graph shows the total stockholder return of an investment of $100 in cash on December 31, 2003 for (i) Caliper's common stock, (ii) the NASDAQ Composite Index, (iii) The

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

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2008

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

Item 6.    Selected Financial Data

        The following table sets forth selected consolidated financial data for each of our last five fiscal years. The selected financial data for each of the five years in the period ended December 31, 2008 have been derived from the consolidated financial statements of the Company, which financial statements have been audited by Ernst & Young LLP, independent registered public accounting firm. The aforementioned consolidated financial statements and the report thereon are included elsewhere in this Annual Report on Form 10-K. This data should be read in conjunction with the detailed information, financial statements and related notes, as well as "Management's Discussion and Analysis

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

	Years Ended December 31,
	2008			2007			2006			2005			2004
	(In thousands, except share data)
Statements of Operations Data(1)(2):
Revenues	$	134,054		$	140,707		$	107,871		$	87,009		$	80,127
Costs and expenses		203,585			164,535			137,856			101,558			112,669
Operating loss		(69,531	)		(23,828	)		(29,985	)		(14,549	)		(32,542	)
Interest income (expense), net		(794	)		(547	)		478			895			846
Other income (expense), net		2,640			579			469			(689	)		517
Loss before income taxes		(67,685	)		(23,796	)		(29,038	)		(14,343	)		(31,179	)
Benefit (provision) for income taxes		(607	)		(284	)		104			(114	)		(377	)
Net loss	$	(68,292	)	$	(24,080	)	$	(28,934	)	$	(14,457	)	$	(31,556	)
Net loss per common share, basic and diluted	$	(1.42	)	$	(0.51	)	$	(0.75	)	$	(0.46	)	$	(1.08	)
Shares used in computing net loss per common share, basic and diluted		48,114			47,301			38,743			31,313			29,273

	As of December 31,
	2008		2007		2006		2005		2004
	(In thousands)
Balance Sheet Data(1)(2):
Cash, cash equivalents, marketable securities and short-term restricted cash	$	26,701	$	18,955	$	24,937	$	31,704	$	50,237
Working capital, including credit facility borrowings (long-term)		19,890		12,837		18,265		33,205		52,234
Total assets		143,078		207,929		225,053		158,209		147,947
Total stockholders' equity		76,738		141,186		157,409		118,438		111,579

(1)

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

(2)

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

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

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

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

Overview

        Caliper develops and sells innovative and enabling products and services to the life sciences research community, a customer base that includes pharmaceutical and biotechnology companies, and government and other not-for-profit research institutions. We believe our integrated systems, consisting of instruments, software and reagents, our laboratory automation tools and our assay 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.

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

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

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

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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.

2008 Key Highlights

        During 2008, we placed significant emphasis on our continued strategic transformation to higher growth, higher profit product lines. In pursuing this objective, we further consolidated and streamlined our operations in order to both reduce costs as well as sharpen our focus on the core areas of our business. Key highlights of the year included:

Product Line Divestitures

        On November 10, 2008, we completed, in two unrelated transactions, the sales of our Pharmaceutical Development and Quality ("PDQ") and AutoTrace product lines. The PDQ product line was comprised of instruments used for drug content uniformity and dissolution rate testing and related services. The purchase price paid to us was approximately $15.8 million, including approximately $13.8 million in cash together with certain assumed liabilities which are estimated at approximately $2.0 million. The AutoTrace product line was designed for water sample clean-up by solid phase extraction prior to analysis of the sample for contamination. The purchase price paid to us was approximately $5.0 million in cash. We recorded a gain of approximately $2.1 million in 2008 related to these product line divestitures. In addition to the benefit of the cash proceeds generated from the sales of these two business lines, we believe the narrowed product line focus on our remaining core technologies will improve our ability to become profitable.

Business Realignment

        During the third quarter of 2008, we reorganized our various products and services along three core business areas—Optical Molecular Imaging (Imaging), Discovery Research (Research), and Drug Discovery Services (Services or CDAS which stands for Caliper Discovery Alliances and Services).

•

The Imaging business is focused on preclinical imaging, where Caliper holds a global leadership position in the high growth optical molecular imaging market. Principal activities of this business area include the expansion of the IVIS imaging instrument and related reagent product lines, development of new therapeutic area applications and facilitating additional imaging modalities.

•

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

•

CDAS is responsible for expanding drug discovery collaborations and alliances, and increasing sales of drug discovery services. The focus of CDAS is to capitalize on market "outsourcing" trends and to maximize the large contract opportunity with the Environmental Protection Agency under its ToxCast screening program.

Cost Reduction Initiatives

        Over the course of 2008, we completed several cost reduction initiatives to conserve our cash needs as well as increase productivity. During the first quarter of 2008, we approved and initiated the consolidation of our research and development operations into our Alameda, California location, which was completed during the third quarter of 2008. This research and development consolidation was coupled with certain general and administrative streamlining actions, including the resolution of certain

49

ongoing lawsuits. Also, in connection with the business realignment discussed above, we reduced our workforce, including the elimination of certain management positions. The aggregate effect of cost reduction initiatives implemented in 2008 reduced our annualized operating expenses by approximately $5.7 million and resulted in restructuring charges which totaled $4.6 million. In addition to these actions, leases related to previously closed facilities expired in June 2008, which will result in annualized cash savings of approximately $3.5 million.

2008 Summary GAAP Financial Performance

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We achieved $134.1 million of total revenue in 2008, a decrease of 5% from $140.7 million of total revenue in 2007. The key elements of the decline were the substantial microfluidic license transactions and collaboration arrangements completed in 2007 which were non-recurring by nature, the divestiture of two product lines (PDQ and AutoTrace) in November 2008, and reduced revenues within CDAS related to our (1) ToxCast screening contract with the Environmental Protection Agency and (2) in vivo phenotyping and compound profiling service revenues from one customer. Offsetting these items were our key growth drivers in 2008 which were optical imaging product revenues, an increase in optical imaging license revenue, an increase in Staccato Automated Workstations and Zephyr liquid handling instrument sales, and the continued expansion of our microfluidic installed base, especially within the LabChip GX and EZ Reader platforms. On a pro forma basis, when excluding the product line divestitures and imaging licensing revenues which were reduced as a result of fair value purchase accounting, our total revenues of $122.8 million in 2008 grew by 7% compared to 2007.

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Product gross margins decreased to 39% in 2008 versus 40% in 2007 primarily as a result of the increased material costs from the concentration of Staccato Automated Workstation revenue as offset by the benefit due to increased volume.

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Service gross margins decreased to 34% in 2008 from 41% in 2007 due largely to the fixed cost base of our in vitro and in vivo facilities and the delay in timing of work within our in vivo services business, as well as an increase in the service costs, primarily headcount related, of the instrument services business, including costs of material.

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Operating expenses increased $35.3 million in 2008 in comparison to 2007, primarily due to the goodwill impairment of $43.4 million and the restructuring charge related to the Mountain View, California facility of $4.6 million which are discussed below. All other operating expenses decreased $12.6 million in 2008 in comparison to 2007. This decrease resulted from reduced research and development spending of $3.0 million as a result of our West Coast consolidation and reduced funded collaboration work, and lower legal expenses including reduced litigation defense and settlement costs of $3.0 million. We also realized $4.8 million of reduced expenses primarily through efforts to streamline operations and gain efficiencies through reduced headcount and spending, and as a result of a decrease in incentive compensation expense in 2008. Other effects on operating expenses included a $1.8 million reduction in amortization expense from the Zymark intangibles that became fully amortized in July 2008.

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Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. With the sales of our PDQ and AutoTrace product lines in November 2008, we first determined the amount of goodwill that was to be allocated to these product groupings based upon their recent transaction values, and then applied our annual analysis (see Footnote 3 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K). As a result of our analysis we determined that the carrying value of the goodwill assigned to the overall business exceeded the implied fair value of goodwill resulting in a goodwill impairment of $43.4 million which was recorded in the fourth quarter.

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During 2008, we recorded a restructuring charge of $4.6 million related to our West Coast consolidation and the related abandonment of approximately 36,500 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 approximately 5 years remaining on our Mountain View, California lease. We expect this initiative to result in lower expensed facility costs of approximately $1.3 million per year.

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Net loss for 2008 was $68.3 million, or $1.42 per share, compared to net loss of $24.1 million, or $0.51 per share in 2007. The increase in net loss was primarily due to the goodwill impairment charge of $43.4 million.

Performance Trends and Economic Conditions

        The table below provides a reconciliation of our GAAP basis revenue to pro forma revenue results for 2008 and 2007, after giving effect to the divestures of the PDQ and AutoTrace product lines which occurred in 2008. We believe this is a useful measure in evaluating revenue performance among comparative periods, but these non-GAAP comparisons are not intended to substitute for GAAP financial measures.

	Year Ended December 31,
	GAAP				Non-GAAP Adjustments						Non-GAAP
															GAAP % Chg			Non-GAAP % Chg
	2008		2007		2008			2007			2008		2007
	(In thousands)
								$	(11,217	)(1)
					$	(11,308	)(2)		(15,492	)(2)
Research	$	68,519	$	80,673		(11,308	)		(26,709	)	$	57,211	$	53,964		(15%	)		6%
Imaging		45,765		39,084		23	(3)		1,037	(3)		45,788		40,121		17%			14%
Services (CDAS)		19,770		20,950		—			—			19,770		20,950		(6%	)		(6%	)
Total revenue	$	134,054	$	140,707	$	(11,285	)	$	(25,672	)	$	122,769	$	115,035		(5%	)		7%

For purposes of comparing growth rates for each of the three principal areas of our business, the above non-GAAP table reconciliation excludes the following:

(1)

Reflects elimination of certain collaboration-related microfluidic license and contract revenue recognized during the year ended 2007 which were concluded in 2007.

(2)

Reflects elimination of the revenues related to the PDQ and AutoTrace product lines divested in November 2008.

(3)

Reflects the add back of the deferred revenue adjustments recorded in purchase accounting that reduce revenues that would otherwise be recognized on a continuing GAAP basis.

        Significant developments and trends among each of our key product families during 2008 included:

Imaging

        In 2008, cumulative placements of IVIS imaging systems surpassed 675 units, making, we believe, our IVIS instrument one of the most successful platforms ever offered for pre-clinical molecular imaging. In 2008, overall imaging revenues increased 14% on a pro forma basis, including 13% product and service growth. We believe that there is continued market opportunity for this product line to grow, with instrument placements as well as expansion of the product line through aftermarket services and accessories, as well as reagents. We believe the opportunity for this product line to grow is enabled by i) continuing to expand beyond our historic core emphasis on oncology, to include therapeutic areas

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such as central nervous system disorders, infectious disease, inflammation and stem cell research, and ii) extension of the product line to further detection modalities beyond bioluminescence and fluorescence detection through organic investment and acquisition.

Research

        In 2008, overall research revenues comprised of our microfluidics and automation product groups increased 6% on a pro forma basis, when excluding revenues for the divested product lines and non-recurring microfluidic contract and license revenues. Key factors were as follows:

        Microfluidics.     During 2008, we experienced a 1% decline in total microfluidics products and services revenue on a pro forma basis. This decline was caused by a fall off in market demand for our LabChip 3000 system and lost datapoint revenues from a single customer who is no longer in business, offset by increasing demand for our LabChip GX instruments, which replaced the LabChip 90 in July 2008, and our EZ reader and ProfilerPro kinase profiling and reagent systems which replaced the LabChip 3000 in 2007. Our plans for 2009 and beyond are to capitalize on the successful 2008 consolidation of our West Coast research and development resources in order to broaden the capabilities and market attractiveness of our microfluidics product offerings, an example being the launch of the LabChip GX in 2008, across both our direct and indirect distribution channels. We are also exploring forensics and next generation sequencing sample preparation and molecular diagnostics as opportunities for longer-term growth.

        Automation and Liquid Handling.     During 2008, liquid handling and automation revenues increased 10% on a pro forma basis. The increase was driven by strong market demand for our core liquid handling offerings including Staccato Automated Workstations and Zephyr liquid handling instruments. We see the markets for liquid handling and automation as mature and intensely competitive; however, we believe we can continue to achieve success in these areas in a number of ways. We reorganized our sales and service teams during the third quarter of 2008, to expand our focus on utilizing our core automation and microfluidic technologies to address expanding market opportunities such as molecular biology sample preparation for genomics, proteomics, and cellular screening and forensics.

CDAS

        During 2008, CDAS service revenues decreased by approximately 6%. The decrease was balanced among both in vivo and in vitro services. In vivo decreases resulted primarily from a decline in phenotyping and compound profiling services provided to one large pharmaceutical company, and in vitro services decreased as a result of reduced level of services requested by the EPA in 2008 under the ToxCast screening contract we were awarded in 2007. The goal of the ToxCast screening program is for the EPA to shift more of its agricultural chemicals testing toward in vitro analysis as opposed to animal testing. This program has the potential to generate significant revenues over the next several years; however, the program is in its early beginning stages and relies on federal budget authorization.

Overall Economic Outlook

        Current economic conditions have led to an unprecedented level of uncertainty across industries, including the life sciences tools and services industry. Principal among concerns are that capital equipment and outsourced services budgets will be reduced and that companies will experience enhanced seasonality that could delay business to the second half of the calendar year. Coupled with these effects, the recent strengthening of the dollar in relation to certain currencies is expected to have an unfavorable impact on our reported revenues in 2009 versus 2008. If current exchange rates were to remain in effect over 2009, we estimate that this would have a potential negative impact of approximately 2 - 3% on our overall revenue growth. On the positive side, we have introduced several

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potentially high impact products such as LabChip GX, IVIS Kinetic and Zephyr which are designed to benefit customers in the areas of genomics and molecular imaging, two fields in particular where research funding appears to remain strong. In addition, we believe that we will see at least a partial rebound in EPA task orders under the ToxCast screening program in 2009. The recent American Reinvestment and Recovery Act of 2009 (Stimulus Package) includes $10 billion in incremental funding to the NIH's annual budget. While these funds are yet to be dispersed, we believe that we will achieve some level of benefit from the Stimulus Package directly or indirectly from government and academic labs which draw upon NIH funding.

Results of Operations

Revenue

	Year Ended December 31, 2008		$ Change			% Change			Year Ended December 31, 2007		$ Change		% Change		Year Ended December 31, 2006
	(In thousands)
Product revenue	$	85,149	$	2,188			3%		$	82,961	$	13,713		20%	$	69,248
Service revenue		37,734		177			—%			37,557		13,103		54%		24,454
License fees and contract revenue		11,171		(9,018	)		(45%	)		20,189		6,020		42%		14,169
Total revenue	$	134,054	$	(6,653	)		(5%	)	$	140,707	$	32,836		30%	$	107,871

        Product Revenue.    Product revenue increased during 2008 compared to 2007, primarily due to strong imaging sales which increased by $2.9 million, or 10%, driven by IVIS instrument growth, including an 8% increase in instrument placements. Research product sales decreased $0.7 million, or 1%, during 2008 as compared to 2007, primarily as a result of sales decreases caused by (a) weaker sales of non-core focus products, including the PDQ and AutoTrace product lines, which we divested in November 2008 which decreased by $3.8 million in 2008; (b) lower revenue from kinase screening (LabChip 3000 systems and EZ Reader instruments) due to increased competition from kinase screening outsourcing, which decreased by $0.3 million; and (c) overall decreases within our OEM relationships and other research product lines which decreased by $2.5 million, of which $1.1 million was related to lost datapoint revenues from a single customer that is no longer in business. Offsetting these decreases within Research were (a) strong sales in our automated sample preparation solutions led by sales of Staccato Automated Workstations and Zephyr liquid handling instruments, which increased by $4.9 million; and (b) sales of LabChip GX and GXII, our latest microfluidic benchtop instruments launched in mid-2008 for genomic sample preparation and analysis, which resulted in a $1.0 million increase.

        Product revenue increased during 2007 compared to 2006, primarily as a result of sales of optical imaging products which were added to our product portfolio as a result of our acquisition of Xenogen in August 2006. Overall, optical imaging products, which includes IVIS imaging systems and related consumables and reagents, accounted for $15.7 million of our increase in revenue in 2007, and 35% of total product revenue, with 2007 being the first full year of sales of this product line. We had a 10% increase in sales of IVIS imaging systems in 2007, compared to 2006, including during the period in which Xenogen was a standalone entity. Sales of microfluidic products, comprised of LabChip instruments and chips, increased by approximately $1.8 million, or 11%, from $15.8 million in 2006 to $17.6 million in 2007. The key reasons for this improvement were the introduction of the EZ Reader Kinase screening platform and associated ProfilerPro reagent kits in the first quarter of 2007, and continued strong demand for the LabChip 90 automated electrophoresis system. During 2007 we placed a total of 69 new LabChip systems with customers, which represented a 17% increase in units sold compared to 2006. Sales of liquid handling and automation products declined by $3.8 million on a net

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basis overall, or 10%, from $39.5 million in 2006 to $35.8 million in 2007. This decline was driven mainly by a substantial decrease of $6.6 million in sales of liquid handling and automation products, primarily as a result of weakness experienced in OEM sales and integrated Staccato platform sales, which was partially offset by a $2.8 million increase in sales of analytical instruments for drug development and other specialty applications. We believe that the decline in liquid handling and automation product sales was due, in part, to temporary market conditions as evidenced by an increase in customer orders in our fiscal fourth quarter which led to a stronger ending backlog for such products at the end of 2007 in comparison to the end of 2006. In addition, during 2007 we introduced Zephyr, a lower-priced, desktop version of our Sciclone liquid handler and have begun to see strong initial customer interest in this newer liquid handling product. Finally, in response to the decrease in OEM product sales, we took steps to realign sales management and focus greater resources on the OEM channel effective at the start of 2008.

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

        Service revenue increased during 2007 compared to 2006 primarily as a result of in vivo drug discovery services performed by Xenogen Biosciences which became part of CDAS in 2006. Overall, the in vivo arm of CDAS generated $7.9 million of incremental service revenue for us in 2007, adding to $1.8 million of in vitro service revenue growth (performed by our NovaScreen business unit), the majority of which resulted from the ToxCast screening contract that we were awarded by the EPA during 2007. In addition, we experienced a $3.5 million increase in billable services and support contracts associated with our installed instrument base. This increase was primarily driven by substantial new placements of IVIS imaging systems in 2007.

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

        License fees and contract revenue increased during 2007 compared to 2006 primarily as a result of $4.5 million of optical imaging license revenue, and an increase of $4.2 million in revenue from license rights granted under our microfluidic patent portfolio, the latter of which is not expected to be a material source of ongoing revenue beyond 2007. These sources of revenue were partially offset by a decrease in collaboration research revenue of $2.0 million in 2007 as compared to 2006 and a decrease in certain government funded research projects of approximately $0.7 million over this same period.

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Cost of Revenue

		Year Ended December 31, 2008		$ Change			% Change			Year Ended December 31, 2007		$ Change		% Change		Year Ended December 31, 2006
		(In thousands)
Cost of
	Product revenue	$	52,178	$	2,418			5%		$	49,760	$	4,301		9%	$	45,459
	Service revenue		24,739		2,382			11%			22,357		7,440		50%		14,917
	License revenue		1,477		(1,038	)		(41%	)		2,515		2,296		1,048%		219
Total cost of revenue		$	78,394	$	3,762			5%		$	74,632	$	14,037		23%	$	60,595

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

        Cost of product revenue increased during 2007 primarily due to the overall increase in product sales, including in particular sales of optical imaging products as discussed above. Material costs within cost of product revenue were approximately 33.6% of sales in 2007 versus 34.8% of sales in 2006, reflecting improvement related to strategic sourcing initiatives while other variable product costs were approximately 9.0% of product sales versus 7.6% in 2006 reflecting primarily increased sales subject to third party royalties and incremental inventory reserve allowances due to parts made obsolete by recent product introductions. Overall labor and manufacturing overhead decreased by approximately $1.6 million, from $16.1 million or 23% of sales in 2006, to $14.5 million, or 18% of sales in 2007 leading to overall product gross margin percentage improvement, as discussed below. The labor and overhead spending reductions resulted primarily from indirect labor cost reductions implemented in our Hopkinton, Massachusetts manufacturing plant during 2007 and reduced warranty support labor.

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

        Cost of service revenue increased during 2007 compared to 2006 primarily due to having a full year of Xenogen Biosciences within our CDAS operations which caused service costs to increase by $4.9 million. Also within CDAS, NovaScreen's service costs increased by approximately $1.0 million during 2007 compared to 2006 as a result of increased staffing and material costs primarily associated with the EPA ToxCast screening program. In addition to these primary increases, labor and other costs related to billable services and support contracts associated with our installed instrument base increased by approximately $1.5 million worldwide.

        Cost of License Revenue.    Cost of license revenue, which is comprised of sublicense fees and royalty payments, decreased during 2008 compared to 2007 primarily as a result of the substantial

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microfluidic revenue decline discussed above. The cost of license revenue increase during 2007 as compared to 2006 incorporated the first full year impact of royalties due to Stanford University on the basis of our Imaging license revenues, together with all other pre-existing royalties and license arrangements with certain other third parties from whom we in-license technologies.

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

        Gross margin on product revenue was 40% for 2007, as compared to 34% in 2006 which was a result of the combined effects of reduced manufacturing labor and overhead costs in relation to higher sales volumes as described above. Gross margin on service revenue was 41% for 2007 and 39% for 2006. This modest improvement reflected improved productivity leverage achieved at CDAS in vitro operations related to the EPA ToxCast contract, partially offset by lower gross margins associated with CDAS' in vivo drug discovery service revenues. In relation to service revenue, CDAS' in vivo operations cost structure is comparably higher than our historic service cost structure (prior to our acquisition of Xenogen), thus weighing down our service gross margins when compared to historic periods.

Operating Expenses

	Year Ended December 31, 2008		$ Change			% Change			Year Ended December 31, 2007		$ Change			% Change			Year Ended December 31, 2006
	(In thousands)
Research and development	$	19,921	$	(4,870	)		(20%	)	$	24,791	$	200			1%		$	24,591
Selling, general and administrative		48,987		(5,967	)		(11%	)		54,954		11,384			26%			43,570
Impairment of goodwill		43,365		43,365			nm			—		—			nm			—
Amortization of intangible assets		8,313		(1,793	)		(18%	)		10,106		1,264			14%			8,842
Restructuring charges, net		4,605		4,553			nm			52		(206	)		(80%	)		258
	$	125,191	$	35,288			39%		$	89,903	$	12,642			16%		$	77,261

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

        Research and development spending increased by $0.2 million, net, in 2007 versus 2006. This increase consisted of a number of changes in spending, including the following: a $2.9 million reduction

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for in-process research and development projects acquired from Xenogen in 2006 that were completed by us in 2007; a $1.3 million overall decrease in liquid handling and microfluidics project spending consisting of $0.6 million in reduced labor-related costs, $0.6 million in reduced material and operating supplies and $0.1 million of reduction in all other costs; and a $4.5 million increase in optical imaging research and development costs consisting primarily of approximately $2.1 million in increased labor-related costs, $1.0 million in increased facilities-related costs (as a result of a full year of Xenogen's operations) and $1.4 million of increase in all other costs.

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

        Selling, General and Administrative Expenses.    Selling, general and administrative expenses decreased by $6.0 million during the year ended December 31, 2008 compared to the same period in 2007. This decrease was primarily general and administration related ($5.6 million) and included $1.4 million reduction of litigation costs related to a settlement charge incurred in 2007 and paid in 2008, a $1.5 million reduction in litigation defense costs which included $1.0 million of proceeds from a mediated settlement in our favor, a $0.6 million reduction related to legal and advisory services related to merger and acquisition activities in 2007, a $0.8 million reduction in personnel-related costs due to headcount reductions, a $0.7 million reduction in SFAS 123R stock compensation expense, and a decrease in all other general and administrative costs of $0.6 million. In addition to the foregoing, selling and marketing expenses decreased by $0.4 million during 2008 primarily due to the decrease in SFAS 123R stock compensation expense.

        Selling, general and administrative expenses increased by $11.4 million during 2007 compared to 2006 primarily due to the full year results of Xenogen included in our 2007 operations. In general, costs and expenses were affected by the integration of Xenogen's business with our ongoing operations as follows. Sales and marketing expenses increased by approximately $1.8 million due to the full year impact of, on average, approximately 20 additional sales and marketing employees and $0.3 million in increased legal expenses. The remaining increase of $9.3 million related primarily to sales and marketing expenses of $5.3 million and $4.0 million in general and administrative costs. The increase in selling, general and administrative expenses resulted from $2.6 million of labor-related expenses (including a reallocation of existing personnel resources from other areas of the business), $2.3 million of legal spending for litigation and other legal costs, $1.6 million of sales and marketing related expenses, $0.5 million of legal and advisory services related to merger and acquisition activity, $0.6 million of increased provision for doubtful accounts, and $1.9 million of other costs, offset by a decrease of $0.2 million in stock-based compensation expense.

        Impairment of Goodwill.    We perform an annual impairment analysis of goodwill to determine if impairment exists, and may perform a test for the impairment of goodwill more frequently if events or circumstances indicate that goodwill may be impaired. Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. With the sales of our PDQ and AutoTrace product lines in the fourth quarter, we first determined the amount of goodwill that was to be allocated to these product groupings based upon their recent transaction values, and then applied our annual analysis which resulted in the determination that impairment had occurred. The second step of the goodwill impairment test involved our calculating the implied goodwill for the entity. The carrying value of the goodwill assigned to the overall business exceeded the implied fair value of goodwill resulting in a goodwill impairment of $43.4 million. The goodwill impairment charge is non-cash in nature and does not affect our liquidity, cash flows from operating activities, or debt covenants. No impairment was identified in fiscal years 2007 and 2006. The goodwill impairment assessment is more fully discussed in Footnote 7 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

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        Amortization of Intangible Assets.    Amortization expense was $8.3 million, $10.1 million and $8.8 million during the years ended December 31, 2008, 2007 and 2006, respectively, related to assets acquired with our acquisitions of Zymark, NovaScreen and Xenogen. 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. The decrease in amortization during 2008 is related to the fact that the Zymark intangibles were 100% amortized as of July 13, 2008. The increase in 2007 relates to the acquisition of Xenogen in 2006 and the inclusion of the related amortization for a full year.

        Amortization expense in 2006 included a charge of $1.7 million related to the impairment of certain intangible assets established with the acquisition of NovaScreen. The charge consisted of $990,000 related to the NovaScreen trade name and $719,000 related to government grants and contracts, each of which was written off during the fourth quarter of 2006. The charge for the trade name relates to Caliper's decision to combine its drug discovery screening and profiling services for both in vitro and in vivo research under a new trade name, Caliper Discovery and Alliance Services. The charge for government contracts and grants resulted from a relative lack of success in obtaining new sources of government research and development funding, due to increased competition for funding.

        Restructuring Charges, net.    We incurred restructuring charges in 2008, 2007 and 2006 related to acquisition and integration activities that are more fully discussed in Footnote 11 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K. Restructuring charges during 2008 related to recording a restructuring charge of $4.6 million related to the West Coast consolidation which included a $2.8 million charge in the third quarter along with a revision to the sublease assumption of $1.8 million during the fourth quarter based on the deteriorating sublease market in Mountain View, California, and the related abandonment of approximately 36,500 square feet of space in Mountain View, California. We estimate that ongoing facility-related cash outflow, primarily rent payments net of sublease income, will be spread over the 5.1 years remaining on our Mountain View, California lease. This facility closure has been accounted for in accordance with SFAS No. 146, pursuant to which we have recorded a liability equal to the fair value of the remaining lease payments, net of expected sublease payments, as of the cease-use date. We expect this initiative to result in lower expensed facility costs of approximately $1.3 million per year.

        Restructuring charges during 2007 related to accretion of interest on facilities, net of sub-lease income. Restructuring charges during 2006 relate to a charge for increased operating costs on idle facilities and accretion of interest on facilities, net of sub-lease income.

Interest and Other Income and Expenses

	Year Ended December 31, 2008			$ Change			% Change			Year Ended December 31, 2007			$ Change			% Change			Year Ended December 31, 2006
	(In thousands)
Interest income	$	259		$	(391	)		(60%	)	$	650			(258	)		(28%	)	$	908
Interest expense		(1,053	)		144			12%			(1,197	)		(767	)		(178%	)		(430	)
Gain on divestiture of product lines		2,119			2,119			nm			—			—			nm			—
Other income (expense), net		521			(58	)		(10%	)		579			110			23%			469
	$	1,846		$	1,814			nm		$	32		$	(915	)		(97%	)	$	947

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        Interest Income.    Interest income decreased in both 2008 and 2007 primarily due to lower cash, cash equivalents and marketable securities balances, on average, over the previous years due to cash used in operating and investing activities.

        Interest Expense.    Interest expense modestly declined during 2008 compared to 2007 primarily as a result of the decrease in the prime interest rate, even though outstanding borrowings increased by $2.0 million in 2008. Interest expense increased in 2007 compared to 2006 as a result of a full year of interest charges under the credit facility which was established in August 2006, including a $4.3 million increase in average outstanding borrowings during the second-half of 2007. Interest expense in 2006 reflected a partial year of interest expense of approximately $8.5 million of outstanding borrowing from August through December 2006.

        Gain on Divestiture of Product Lines.    In November 2008, we divested our PDQ and AutoTrace product lines and recorded a gain of $2.1 million which is more fully discussed in Note 3 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

        Other Income, Net.    Other income, net decreased $0.1 million in 2008 compared to 2007 primarily from reduced gains on account balances denominated in non-U.S. currencies. Other income, net increased $0.1 million in 2007 compared to 2006 primarily from gains associated with recording account balances denominated in non-U.S. currencies at fair market value. During 2007, we incurred foreign currency transaction gains of approximately $576,000 compared to $434,000 in 2006.

Liquidity and Capital Resources

        As of December 31, 2008, we had $26.7 million in cash, cash equivalents, marketable securities and short-term restricted cash in addition to approximately $8.0 million of additional borrowing capacity under our existing Credit Facility upon which we had outstanding borrowings of $14.9 million and outstanding letter of credit reserves of approximately $1.7 million. Our Credit Facility, which was amended and restated on March 6, 2009 provides for up to $25 million of available borrowing as further described below.

        On March 6, 2009, we entered into a Second Amended and Restated Loan and Security Agreement (the "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 and other contingent reserves. Principal borrowings under the credit facility accrue interest at a floating annual rate equal to the prime rate plus one percent if our unrestricted cash held at the bank exceeds or is equal to $20 million, or prime plus two percent if our unrestricted cash held at the bank is below $20 million. Under the credit facility, we are permitted to borrow up to $25 million, subject to a borrowing base limit consisting of (a) 80% of eligible accounts receivable plus (b) the lesser of 70% of our unrestricted cash at the bank or $12 million; provided, that on each of the first three (3) business days and each of the last three (3) business days of each fiscal quarter, the borrowing base is (a) 80% of eligible accounts receivable plus (b) the lesser of 90% of our unrestricted cash at the bank or $12 million. Eligible accounts receivable do not include internationally billed receivables, unbilled receivables, and receivables aged over 90 days from invoice date. The Credit Facility matures on November 30, 2010. As of December 31, 2008, $14.9 million was outstanding under the previous credit facility. The Credit Facility serves as a source of capital for ongoing operations and working capital needs.

        The Credit Facility includes traditional lending and reporting covenants including that certain financial covenants applicable to liquidity and earnings are to be maintained by us and tested as of the last day of each quarter. The credit facility also includes a net liquidity clause. Under this clause if our cash, cash equivalents and marketable securities held at the bank, net of debt outstanding under the Credit Facility, is less than $0.5 million, then the bank will apply all of our accounts receivable

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collections, received within our lockbox arrangement with the bank, to the outstanding principal. Such amounts are eligible to be re-borrowed by us subject to the borrowing base limit described above. Based on our current forecast, we expect that we will operate under the net liquidity clause beginning in the third quarter of 2009 and continue in effect for the remainder of 2009. As of December 31, 2008, we were not in compliance with one of our covenants for which we subsequently received a waiver from the bank. We expect to remain in compliance with the covenants through the Credit Facility's maturity date based on current forecasts.

        The Credit Facility also includes subjective rights for the bank to accelerate the maturity date of the debt, lower the borrowing base or stop making advances, which are typical within asset based lending arrangements. We do not believe the bank will exercise these rights as long as we are meeting our covenants and are achieving our forecasts. The Credit Facility also includes several potential events of default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at the interest rate in effect as of the date of default plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank's right to declare all outstanding obligations immediately due and payable, to modify the borrowing base formula described above to reduce credit availability, or to cease making advances to us. Should an event of default occur, including the exercise of a material adverse change condition, and based on such default the bank were to decide to either (i) declare all outstanding obligations immediately due and payable, (ii) reduce our borrowing base, or (iii) stop making credit advances to us, we may be required to significantly reduce our costs and expenses, sell additional equity or debt securities, or restructure portions of our business which could involve the sale of certain assets. We believe, based on our current projections that the bank will continue to lend to us subject to the terms and conditions of the Credit Facility. The sale of additional equity or convertible debt securities may result in additional dilution to our stockholders. Furthermore, additional capital may not be available on terms favorable to us, if at all. In this circumstance, if we could not significantly reduce our costs and expenses, obtain adequate financing on acceptable terms when such financing is required or restructure portions of our business, our business would be adversely affected. In addition, the amount of available capital that we are able to access under the Credit Facility at any particular time is dependent upon the borrowing base formula, which ultimately relies on the underlying performance of the business. If economic conditions worsen and our business performance is not as strong as anticipated, then we could experience an event of default or a reduction in borrowing capacity under the Credit Facility, which if not cured to the bank's satisfaction, could have a potential adverse impact on our ability to access capital under our Credit Facility in order to fund 2009 operations. If such events were to occur, our business would be adversely affected.

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

        We believe our cash balance, working capital on hand at December 31, 2008 and access to available capital under our credit facility will be sufficient to fund continuing operations through at least January 1, 2010. Nevertheless, our actual cash needs could vary considerably, depending on opportunities and circumstances that arise over time. If, at any time, cash generated by operations is insufficient to satisfy our liquidity requirements, we may need to reduce our costs and expenses, sell additional equity or debt securities or draw down on our current credit facility if we have borrowing

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capacity. The inability to obtain additional financing may force other actions such as the sale of certain assets, or, ultimately, cause us to cease operations.

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

        We maintain cash balances in many subsidiaries through which we conduct our business. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences. However, these cash balances are generally available without legal restrictions to fund ordinary business operations. We have transferred, and will continue to transfer, cash from our subsidiaries to us and to other international subsidiaries when it is cost effective to do so.

Cash Flows

	Year Ended December 31, 2008			$ Change			Year Ended December 31, 2007			$ Change			Year Ended December 31, 2006
	(In thousands)
Cash provided by (used in)
Operating Activities	$	(11,197	)	$	(1,085	)	$	(10,112	)	$	5,093		$	(15,205	)
Investing Activities	$	15,794		$	8,801		$	6,993		$	(9,128	)	$	16,121
Financing Activities	$	3,075		$	(3,933	)	$	7,008		$	4,684		$	2,324

        Operating Activities.    In 2008 we used $11.2 million of cash for operating activities which included $8.1 million of net cash used to fund daily operations. This usage included approximately $0.8 million in personnel severance costs related to cost reduction initiatives. In addition, we made a payment of approximately $2.7 million on idle leased space in Mountain View, California and incurred approximately $0.4 million in net litigation costs.

        Investing Activities.    During 2008, net proceeds from the sale of the PDQ and AutoTrace product lines generated $17.8 million of cash and the refund of a security deposit on one of our facilities provided $0.7 million. Purchases, sales and maturities of marketable securities generated $0.2 million of cash, which we used primarily for operations. Our primary investing activities were the purchases of $2.9 million of property and equipment which mainly consisted of leasehold improvements within our current facilities.

        Financing Activities.    During 2008, financing cash proceeds were principally comprised of $2.0 million of net borrowings under our credit facility. Other proceeds were from stock proceeds realized from employee participation in our employee stock purchase plan and option exercises.

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Contractual Obligations

        As of December 31, 2008, we had commitments under leases and other contractual obligations as follows (in thousands):

		Payments due by Period
Contractual Obligations		Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 years
Borrowings under credit facility		$	14,900	$	14,900	$	—		—	$	—
Operating lease obligations			47,827		7,012		14,026		14,176		12,613
Idle facility obligations			4,476		1,806		2,003		667		—
	Total obligations	$	67,203	$	23,718	$	16,029	$	14,843	$	12,613

        In addition to the commitments in the table above, as of December 31, 2008, we had a non-cancelable purchase commitment in the amount of approximately $0.4 million with the foreign supplier of our glass stock used in the manufacturing of certain types of chips and approximately $2.9 million with our suppliers of cameras and filters for in vivo imaging instrumentation. These commitments are excluded from the above table due to the fact they are not specifically related to a given time period. We also have minimum royalty obligations under separate license agreements with UT-Battelle, LLC, the Trustees of the University of Pennsylvania, Monogram Biosciences, Inc., and certain other licensors that in the aggregate are approximately $0.4 million per year. As of December 31, 2008, we have established $1.7 million in standby letters-of-credit, which restrict available borrowing under our credit facility, related to facility leases and customer deposits.

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

•

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

•

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

•

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

•

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

•

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

•

other factors not within our control.

2009 Financial Projections

•

Our revenue projection for the first quarter of 2009 is $25.0 to $28.0 million. The midpoint of this range is approximately flat compared to pro forma first quarter revenue in 2008, and assumes an unfavorable currency effect of approximately 3% at current exchange rates.

•

For the full year, we are currently estimating revenue growth of between 2 - 5% over 2008 pro forma revenue of $122.8 million. Our full year estimate assumes an unfavorable currency effect of 2% based on current rates. As previously communicated, growth is expected to be greater in the second half of 2009 than in the first half, and is expected to result primarily from our proprietary imaging and microfluidic technologies for molecular applications.

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

Impact of Inflation

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

Off-Balance Sheet Arrangements

        As of December 31, 2008, Caliper did not have any "off-balance sheet arrangements," as that term is defined in the rules and regulations of the SEC.

Critical Accounting Estimates

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

        Revenue Recognition.    Revenue arrangements that include multiple deliverables are divided into separate units of accounting if the deliverables meet certain criteria, including whether the delivered items have stand alone value and whether there is objective and reliable evidence of fair value of the undelivered items. In addition, we allocate the consideration among the separate units of accounting based on their fair values, and consider the applicable revenue recognition criteria separately for each of the separate units of accounting. We determine "fair value" of undelivered items based upon our historic selling prices, or where no historic information exists, based upon management's estimate of the probable selling prices for such undelivered items. The amount of our product revenue is affected by our judgments as to whether an arrangement includes multiple elements and if so, whether there is objective evidence of fair value for those elements. Changes to the elements in an arrangement and the ability to establish objective evidence of fair value for those elements could affect the timing of revenue recognition. These conditions are sometimes subjective and actual results could vary from the estimated outcome, requiring future adjustments to revenue. We recognize certain service and contract revenue for certain arrangements based upon proportional performance which requires that we estimate resources required to perform the work. The extent to which our resource estimates prove to be inaccurate could affect the timing of the revenue recognition for a particular contract arrangement.

        Goodwill.    We perform an annual impairment analysis of goodwill to determine if impairment exists. We may perform a test for the impairment of goodwill more frequently if events or circumstances indicate that goodwill may be impaired. The goodwill impairment analysis is a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. Caliper is comprised of a single segment which is our sole reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying value exceeds

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estimated fair value, there is an indication of potential impairment and a second step is performed to measure the amount of impairment. Fair value is determined by utilizing information about our company as well as publicly available industry information. Determining fair value involves judgments by our management and requires the use of significant estimates and assumptions, including point-in-time estimates of revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future capital expenditures and future market conditions, among others. Our projections are based on an internal strategic review. Key assumptions, strategies, opportunities and risks from this strategic review along with a market evaluation are the basis for our assessment.

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

        Our annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. With the contemporaneous sales of our PDQ and AutoTrace product lines in the fourth quarter of 2008, which met the criteria for assets held for sale in October 2008, prior to our goodwill impairment test date, we first determined the amount of goodwill ($14.3 million) that was to be allocated to these product groupings based upon their recent transaction values, and then applied our annual analysis to the remaining goodwill balance ($66.3 million), which resulted in the determination that impairment had occurred. The second step of the goodwill impairment test involved us calculating the implied goodwill. The carrying value of the goodwill exceeded the implied fair value of goodwill, resulting in a goodwill impairment of $43.4 million, which has been recorded in our results of operations in the fourth quarter of 2008.

        Goodwill is not amortized, but is reviewed for impairment at least annually. The results of this year's impairment test are as of a point in time. If the future growth and operating results of our business are not as strong as anticipated and/or our market capitalization declines, this could impact the assumptions used in calculating the fair value in subsequent years. To the extent goodwill is impaired, its carrying value will be further written down to its implied fair value and a charge will be made to our earnings. Such an impairment charge would materially and adversely affect our GAAP reported operating results. As of December 31, 2008, we had recorded goodwill and other intangibles of $22.9 million in our consolidated balance sheet. The goodwill impairment charge is non-cash in nature and does not affect Caliper's liquidity, cash flows from operating activities, or debt covenants, or have any impact on future operations. No impairment was identified in fiscal years 2007 and 2006.

        Valuation of Intangibles.    Our business acquisitions have resulted in intangible assets, net of accumulated amortization of $34.4 million as of December 31, 2008. The determination of the value of such assets requires management to make estimates and assumptions that affect our consolidated financial statements.

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

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financial results associated with each identified intangible asset. Applicable discount rates used ranged from 20% to 23%.

        We acquired NovaScreen on October 3, 2005. In connection with this acquisition we used an independent appraisal to determine the fair value of intangibles related to the NovaScreen business. The fair value was determined based upon projected future discounted cash flows of identified intangible assets taking into account risks related to the characteristics and applications of the technology, existing and future markets and assessments of the life cycle stage of developed technology. The valuation approach took into consideration discount rates commensurate with the inherent risk and projected financial results associated with each identified intangible asset. Applicable discount rates used ranged from 12% to 17%.

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

        Stock-Based Compensation.    We account for stock-based compensation in accordance with 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.

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

•

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

•

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

•

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

•

Forfeiture rate.

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

        Accounts Receivable Reserves.    We grant credit to customers based on evaluations of their financial condition, generally without requiring collateral. We attempt to limit credit risk by monitoring our exposure for credit losses. This analysis may involve review of historical bad debts, customer concentrations, customer credit-worthiness, and current economic trends. We establish allowances for those accounts considered uncollectible based on the analysis of the recoverability of our trade accounts receivable performed at the end of each reporting period. Establishing an adequate allowance for doubtful accounts involves the use of considerable judgment and subjectivity. Actual results could vary from the assumptions we use to estimate the adequacy of our accounts receivable reserves which could require future adjustment to our reserve provisions. Our allowance for doubtful accounts was $0.7 million, and $1.3 million as of December 31, 2008 and 2007, respectively. We wrote off $719,000, $55,000, and $48,000 of accounts deemed uncollectible in 2008, 2007 and 2006, respectively. The write

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off in 2008 relates to a distributor of our PDQ product line. The amount of the write off was fully reserved in prior years and was written off in 2008 as it was deemed uncollectible.

        Inventory Reserves.    We reserve or write off 100% of the cost of inventory that we specifically identify and consider obsolete or excess. We define obsolete inventory as inventory that will no longer be used in the manufacturing process. Excess inventory is generally defined as inventory in excess of projected usage, and is determined using management's best estimate of future demand at the time, based upon information then available to us. We use a twelve-month demand forecast and, in addition to the demand forecast, we also consider: (1) parts and subassemblies that can be used in alternative finished products; (2) parts and subassemblies that are unlikely to be impacted by engineering changes; and (3) known design changes which would reduce our ability to use the inventory as planned. Determination of the excess balance is highly subjective and relies in part on the accuracy of our forecasts and our assessment of market conditions. If actual conditions are less favorable than conditions upon which we base our estimates, additional write-downs may be required. Conversely, if conditions are more favorable than conditions upon which we base our estimates, inventory previously written down may be sold, resulting in lower cost of sales and higher income from operations in that period. During 2008, 2007 and 2006, respectively, we recorded charges of $1.7 million, $1.3 million, and $0.2 million, to cost of product revenues for excess and obsolete inventories. The 2008 and 2007 increases in excess and obsolete inventories occurred primarily as a result of product evolution and new product introductions.

        Warranty Provision.    At the time revenue is recognized, we establish an accrual for estimated warranty expenses associated with sales, recorded as a component of cost of revenue. We offer a one-year limited warranty on instrumentation products and a 90-day warranty on chips, which is included in the sales price of many of its products. Our standard limited warranty covers repair or replacement of defective goods, a preventative maintenance visit on certain products, and telephone based technical support. No upgrades are included in the standard warranty. Provision is made for estimated future warranty costs at the time of sale.

        Factors that affect our warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust amounts as necessary. During 2008, 2007 and 2006, respectively, we recorded charges of $1.8 million, $1.1 million and $2.1 million to cost of product revenues for estimated warranty costs. The increase in 2008 relates primarily to the increase in product sales of liquid handling and automation products. The decrease in 2007 relates primarily to the overall decrease in sales of liquid handling and automation products, especially Staccato and LabChip 3000 sales that are no longer under warranty that have historically incurred a higher rate of warranty incidents. Actual results could vary from the assumptions we use to establish the warranty liability which could require future adjustments to our reserve positions.

        Restructuring Charges.    During the years ended December 31, 2008, 2007 and 2006, we recorded restructuring charges of $4.6 million, $0.1 million and $0.3 million, respectively, for exit plan activities which took place in the period 2005-2008 and accounted for these plans in accordance with Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Benefits and Other Costs to Exit an Activity (including Certain Costs incurred in a Restructuring), SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, and SEC Staff Accounting Bulletin No. 100 (SAB 100), Restructuring and Impairment. In accordance with such standards, management makes certain judgmental estimates related to these restructuring charges. For example, the consolidation of facilities required us to make estimates including with respect to contractual rental commitments or lease buy-outs for office space being vacated and related costs, and ability of the tenant to pay leasehold improvement write-downs, offset by estimated sublease income. We review on at least a quarterly basis our sublease assumptions. These estimates include anticipated rates to be charged to a

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sub-tenant and the timing of the sublease arrangement. If the rental markets change, our sublease assumptions may not be accurate and changes in these estimates might be necessary and could materially affect our financial condition and results of operations. For example, in December 2005, we recorded a restructuring credit of approximately $1.4 million to recognize the net present value of future sublease rental income based upon subleases we were able to secure during 2005. For a further discussion of our restructuring activities, see Note 11 of the Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

Recent Accounting Pronouncements

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

        In December 2007, the FASB issued SFAS No. 141(R) (SFAS 141R), Business Combinations. This Standard will require an acquiring company to measure all assets acquired and liabilities assumed, including contingent considerations and all contractual contingencies, at fair value as of the acquisition date. In addition, an acquiring company is required to capitalize IPR&D and either amortize it over the life of the product, or write it off if the project is abandoned or impaired. The Standard is effective for transactions occurring on or after January 1, 2009.

        In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets, or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008 and early adoption is prohibited. We are evaluating the impact of the pending adoption of FSP FAS 142-3 on our consolidated financial statements.

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Item 7A.Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency

        As a multinational company, we are subject to changes in foreign currency fluctuations. We have operations in the United Kingdom, France, Germany, Belgium, Switzerland, Canada and Japan. To the extent our sales and operating expenses are denominated in foreign currencies, our operating results may be adversely impacted by changes in exchange rates. While foreign exchange gains and losses have historically been immaterial, we cannot predict whether such gains and losses will continue to be immaterial. We performed a sensitivity analysis assuming a hypothetical 10% movement in exchange rates applied to our projected foreign operations for the fiscal year 2008. A hypothetical 10% movement in exchange rates could materially impact our reported sales. However, because both sales and expenses are denominated in local currency, this analysis indicated that such movement would not have a material effect on net operating results or financial condition. Translation gains and losses related to our foreign subsidiaries are accumulated as a separate component of stockholders' equity. We do not currently engage in foreign currency hedging transactions, but may do so in the future.

Interest Rate Sensitivity

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

        The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities. We estimate that such hypothetical adverse 100 basis point movement would not have materially impacted net income or materially affected the fair value of interest rate sensitive instruments at either December 31, 2008 or 2007.

        As of December 31, 2008 we had $14.9 million in debt outstanding under our credit facility. The interest rate on the facility is based on the prime rate (currently 3.25%) and therefore has direct and immediate response to changes in interest rates.

        Our primary investment objective is to preserve principal while at the same time maximizing yields without significantly increasing risk. Our portfolio includes money markets funds, commercial paper, medium-term notes, corporate notes, government securities, and corporate bonds. Our portfolio excludes auction rate securities. The diversity of our portfolio helps us to achieve our investment objective. As of December 31, 2008 and 2007, the average remaining maturities of our investment portfolio were approximately one and five months, respectively. All of our instruments are held other than for trading purposes. As of December 31, 2008 and 2007, unrealized losses were considered to be temporary due to the fact, although available to be sold to meet operating needs or otherwise, securities are generally held to maturity.

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        The following table presents by year of maturity the amounts of our cash equivalents and investments, and related weighted average interest rates that may be subject to interest rate risk as of December 31, 2008:

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

        This differs from our position at December 31, 2007, which the following table presents (dollars in thousands):

			2008			2009			Total			Fair Value December 31, 2007
Cash and money market funds:
	Fixed rate securities (in thousands)		$	15,709		$	—		$	15,709		$	15,709
		Average interest rate		3.27	%		—			3.27	%
Available for sale marketable securities:
	Fixed rate securities (in thousands)		$	2,751		$	494		$	3,245		$	3,246
		Average interest rate		4.66	%		3.37	%		4.46	%
Total securities (in thousands)			$	18,460		$	494		$	18,954		$	18,955
		Average interest rate		3.97	%		3.37	%		3.48	%

Item 8.    Financial Statements and Supplementary Data

(a)

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



(1)

Financial Statements:

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

(2)

Financial Statement Schedules:

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

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

        Not applicable.

Item 9A.Controls and Procedures

        Evaluation of disclosure controls and procedures.    We have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Securities

69

Exchange Act of 1934, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. 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 December 31, 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 fourth quarter of our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

        Management's report on internal control over financial reporting.    Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f), and 15d-15(f) for Caliper. As part of that process, as of December 31, 2008, the end of the fiscal year covered by this annual report on Form 10-K, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we carried out an assessment of the effectiveness of Caliper's internal control over financial reporting. The assessment was conducted following the framework in Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control—Integrated Framework (1992). The assessment did not identify any material weaknesses in our internal control over financial reporting and our management concluded that our internal control over financial reporting was effective as of December 31, 2008. The effectiveness of our internal control over financial reporting as of December 31, 2008 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

        We have audited Caliper Life Sciences' internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Caliper Life Sciences' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting

70

included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

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

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

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

        In our opinion, Caliper Life Sciences maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the COSO criteria.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Caliper Life Sciences as of December 31, 2007 and 2008, and the related consolidated statements of income, stockholders' equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2008 of Caliper Life Sciences and our report dated March 12, 2009 expressed an unqualified opinion thereon.

	/s/ Ernst & Young LLP
Boston, Massachusetts March 12, 2009

Item 9B.Other Information

        Not applicable.

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PART III

Item 10.    Directors, Executive Officers and Corporate Governance

        Information concerning our Executive Officers is set forth under "Executive Officers of the Registrant" in Part I of this Annual Report on Form 10-K and is incorporated by reference here. The remainder of the response to this item is incorporated by reference from the discussion responsive thereto under the captions "Executive Officers and Key Employees," "Section 16(a) Beneficial Ownership Reporting Compliance," "Code of Business Conduct and Ethics," and "Nominating and Corporate Governance Committee" in the Proxy Statement for our 2009 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

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

Item 11.    Executive Compensation

        Information concerning director and executive compensation required by this Item 11 will be set forth in the sections entitled "Directors Compensation," "Summary of Compensation," "Compensation Committee Interlocks and Insider Participation" and "Compensation Committee Report" contained in our Proxy Statement for our 2009 Annual Meeting of Stockholders or contained in a future amendment to this Annual Report on Form 10-K and incorporated herein by reference.

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

        Information concerning security ownership of certain beneficial owners and management required by this Item 12 will be set forth in the section entitled "Security Ownership of Certain Beneficial Owners and Management" contained in our Proxy Statement for our 2009 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

        Information concerning securities authorized for issuance under equity compensation plans required by this Item 12 will be set forth in the table entitled "Equity Compensation Plan Information" and information thereunder contained in our Proxy Statement for our 2009 Annual Meeting of Stockholders or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions and Director Independence

        Information concerning certain relationships and related transactions required by this Item 13 will be set forth in the section entitled "Certain Relationships and Related Transactions" and "Compensation Discussion and Analysis" contained in our Proxy Statement for our 2009 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

Item 14.    Principal Accountant Fees and Services

        Information concerning principal accountant fees and services required by this Item 14 will be set forth in the section entitled "Principal Accountant Fees and Services" contained in our Proxy Statement for our 2009 Annual Meeting of Stockholders or in a future amendment to this Annual Report on 10-K and is incorporated herein by reference.

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PART IV

Item 15.    Exhibits and Financial Statement Schedules

(a)

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



(1)

Financial Statements:

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

	Page
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at December 31, 2008 and 2007	F-2
Consolidated Statements of Operations—For the Years Ended December 31, 2008, 2007 and 2006	F-3
Consolidated Statement of Stockholders' Equity—For the Years Ended December 31, 2008, 2007 and 2006	F-4
Consolidated Statements of Cash Flows—For the Years Ended December 31, 2008, 2007 and 2006	F-5
Notes to Consolidated Financial Statements	F-6

(2)

Financial Statement Schedules:

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

(3)

Exhibits:

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

Exhibit Number		Description of Document
	2.1(14)	Stock Purchase Agreement, by and among Caliper, Berwind Corporation and The Berwind Company LLC, dated June 9, 2003.
	2.2(14)	Amendment No. 1 to the Stock Purchase Agreement, by and among Caliper, Berwind Corporation and The Berwind Company LLC, dated July 10, 2003.
	2.3(17)	Amendment No. 2 to the Stock Purchase Agreement, by and among Caliper, Berwind Corporation and The Berwind Company LLC, dated April 1, 2004.
	2.4(18)	Agreement and Plan of Merger, among Caliper Life Sciences, Inc., Caliper Services, Inc. and NovaScreen Biosciences Corporation, dated as of September 7, 2005.
	2.5(22)	Agreement and Plan of Merger, among Caliper Life Sciences, Inc., Caliper Holdings, Inc. and Xenogen Corporation, dated as of February 10, 2006.
	2.6(21)	Asset Sale and Purchase Agreement, dated as of October 29, 2008, by and between Sotax Corporation and Caliper Life Sciences, Inc.
	2.7(21)	Asset Purchase Agreement, dated as of November 10, 2008, by and between Dionex Corporation and Caliper Life Sciences, Inc.
	3.1(17)	Amended and Restated Certificate of Incorporation of Caliper.
	3.2(7)	Certificate of Designation of Series A Junior Participating Preferred Stock.

73

Exhibit Number		Description of Document
	3.3(25)	Amended and Restated Bylaws of Caliper.
	4.1	Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
	4.11(26)	Registration Rights Agreement by and between Caliper and The Berwind Company LLC, dated as of December 18, 2007.
	4.2(19)	Specimen Stock Certificate.
	4.3(8)	Rights Agreement, dated as of December 18, 2001, between Caliper and Wells Fargo Bank Minnesota, N.A., as Rights Agent.
	10.1(1)	Lease Agreement, dated December 1, 1998, between Caliper and 605 East Fairchild Associates, L.P.
	10.2(1)(2)	1996 Equity Incentive Plan.
	10.3(1)(2)	1999 Equity Incentive Plan.
	10.4(1)(2)	1999 Employee Stock Purchase Plan.
	10.5(2)(23)	1999 Non-Employee Directors' Stock Option Plan.
	10.6(2)(19)	Form of Grant Agreement for 1999 Equity Incentive Plan—Option Awards.
	10.7(2)(19)	Form of Grant Agreement for 1999 Equity Incentive Plan—Restricted Stock Unit Awards.
	10.8(2)(19)	Form of Grant Agreement for 1999 Non-Employee Directors' Stock Option Plan.
	10.9(1)(2)	Form of Indemnification Agreement entered into between Caliper and its directors and executive officers.
	10.10(1)(3)	Collaboration Agreement, dated May 2, 1998, between Caliper and Hewlett-Packard Company (now Agilent Technologies, Inc.).
	10.11(2)(19)	Form of Stock Option Grant Agreement for Acquisition Equity Incentive Plan.
	10.12(2)(19)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (pro rata vesting).
	10.13(2)(19)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (5 year cliff vesting).
	10.14	Lease Agreement, dated as of April 25, 2005, between Caliper and BCIA New England Holdings LLC.
	10.17(2)(19)	Non-Employee Directors' Cash Compensation Plan.
	10.18(2)(10)	Caliper Performance Bonus Plan.
	10.20(2)(10)	Summary Cash Compensation Sheet.
	10.23(1)(2)	The Corporate Plan for Retirement Select Plan Adoption Agreement and related Basic Plan Document.
	10.27(5)	Lease Agreement, dated June 23, 2000 and effective July 5, 2000, between Caliper and Martin CBP Associates, L.P.
	10.29(2)	Key Employee Change of Control and Severance Benefit Plan.

74

Exhibit Number		Description of Document
	10.30(4)(7)	Cross-License Agreement, dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.32(3)(6)	Settlement Agreement and Mutual General Release dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.39(2)(8)	2001 Non-Statutory Stock Option Plan.
	10.46(2)(19)	Form of Grant Agreement for 2001 Non-Statutory Stock Option Plan.
	10.48(2)(9)	Key Employee Agreement, dated July 1, 2002, between Caliper and Dr. Daniel Kisner.
	10.52(3)(15)	Sole Commercial Patent License Agreement, effective September 1, 1995, between UT-Battelle, LLC, the successor to Lockheed Martin Energy Research Corporation, and Caliper, as amended on November 1, 2002.
	10.55(3)(11)	Collaboration Agreement, dated June 4, 2003, between Caliper and Bio-Rad Laboratories, Inc.
	10.56(2)(12)	Key Employee Agreement, dated July 14, 2003, between Caliper and E. Kevin Hrusovsky.
	10.62(2)(13)	Acquisition Equity Incentive Plan.
	10.63(2)(16)	Key Employee Agreement Amendment, dated December 24, 2003, between Caliper and Dr. Daniel L. Kisner.
	10.64(2)(16)	Consulting Agreement, dated January 1, 2004, between Caliper and Dr. David V. Milligan.
	10.66(3)(16)	Collaboration and Supply Agreement, dated January 9, 2004, among Caliper, Zymark Corporation and Affymetrix, Inc.
	10.67(2)	Offer Letter dated September 7, 2005 between Caliper Life Sciences, Inc. and David M. Manyak, Ph.D.
	10.68(27)	Loan and Security Agreement, dated as of August 9, 2006, by and among Caliper, Silicon Valley Bank and NovaScreen Biosciences Corporation.
	10.69(28)	Joinder Agreement, dated as of September 28, 2006, by and among Caliper, Silicon Valley Bank, Xenogen Corporation, Xenogen Biosciences Corporation, and NovaScreen Biosciences Corporation.
	10.70(29)	First Loan Modification Agreement dated as of February 26, 2007, by and among Caliper, Silicon Valley Bank, NovaScreen Biosciences Corporation, Xenogen Corporation, and Xenogen Biosciences Corporation.
	10.71(20)(3)	Agreement, dated as of May 5, 2000, between the Board of Trustees of the Leland Stanford Junior University and Xenogen Corporation.
	10.72(2)	Consulting Agreement, dated as of October 17, 2006, between Caliper and Pamela Contag.
	10.73(30)	Amended and Restated Loan and Security Agreement, dated as of February 15, 2008, by and among Caliper, Silicon Valley Bank, Xenogen Corporation, Xenogen Biosciences Corporation and NovaScreen Biosciences Corporation.
	10.74(31)	Amendment to Lease Agreement dated as of March 18, 2008, by and between 605 Fairchild Associates, L.P., as landlord, and Caliper Life Sciences, Inc., as tenant.

75

Exhibit Number		Description of Document
	10.75(32)	Consulting Agreement, dated March 10, 2008, between Caliper and Dr. Daniel Kisner.
	10.76(33)	Separation Agreement dated April 4, 2008, between Caliper and Mr. Thomas Higgins.
	10.77(34)	Consulting Agreement, dated April 5, 2008, between Caliper and Mr. Thomas Higgins.
	10.78(35)	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.
	21.1(24)	Subsidiaries of the Registrant.
	23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
	24.1	Power of Attorney (reference is made to the signature page of this report).
	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a)
	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)

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

(2)

Management contract or compensatory plan or arrangement.

(3)

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

(4)

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

(5)

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

(6)

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

(7)

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

(8)

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

(9)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended September 30, 2002 and incorporated by reference herein.

(10)

Previously filed as the like-numbered Exhibit to Current Report on Form 8-K filed March 16, 2005 and incorporated by reference herein.

(11)

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

(12)

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

76

(13)

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

(14)

Previously filed as the like-numbered Exhibit to Form 8-K filed July 25, 2003 and incorporated by reference herein.

(15)

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

(16)

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

(17)

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

(18)

Previously filed as Exhibit 2.1 to our Registration Statement on Form S-3, File No. 333-129192, filed October 21, 2005 and incorporated by reference herein.

(19)

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

(20)

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

(21)

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

(22)

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

(23)

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

(24)

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

(25)

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

(26)

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

(27)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2006 and incorporated by reference herein.

(28)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended September 30, 2006 and incorporated by reference herein.

(29)

Previously filed as Exhibit 10.1 to Form 8-K filed March 2, 2007 and incorporated by reference herein.

(30)

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

(31)

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

(32)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

77

(33)

Previously filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(34)

Previously filed as Exhibit 10.4 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(35)

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

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SIGNATURES

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

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

Date: March 13, 2009

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

Signature	Title	Date
/s/ E. KEVIN HRUSOVSKY E. Kevin Hrusovsky	President and Chief Executive Officer and Director (Principal Executive Officer)	March 13, 2009
/s/ PETER F. MCAREE Peter F. McAree	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	March 13, 2009
/s/ JOSEPH H. GRIFFITH IV Joseph H. Griffith IV	Vice President, Finance and Corporate Controller (Principal Accounting Officer)	March 13, 2009
/s/ ROBERT C. BISHOP, PH.D Robert C. Bishop, Ph.D.	Chairman of the Board of Directors	March 13, 2009
/s/ VAN BILLET Van Billet	Director	March 13, 2009
/s/ DAVID W. CARTER David W. Carter	Director	March 13, 2009
/s/ ALLAN L. COMSTOCK Allan L. Comstock	Director	March 13, 2009
/s/ DAVID V. MILLIGAN, PH.D. David V. Milligan, Ph.D.	Director	March 13, 2009
/s/ KATHRYN A. TUNSTALL Kathryn A. Tunstall	Director	March 13, 2009

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

        We have audited the accompanying consolidated balance sheets of Caliper Life Sciences as of December 31, 2007 and 2008, and the related consolidated statements of income, stockholders' equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2008. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Caliper Life Sciences at December 31, 2007 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Caliper Life Sciences' internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2009 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Boston, Massachusetts
March 12, 2009

F-1

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

				December 31,
				2008			2007
				(In thousands, except share and per share data)
ASSETS
Current assets:
	Cash and cash equivalents			$	23,667		$	15,709
	Marketable securities				3,034			3,246
	Accounts receivable, net of allowance for doubtful accounts of $740 and $1,320 in 2008 and 2007, respectively				27,396			30,248
	Inventories				17,579			19,572
	Prepaid expenses and other current assets				2,481			2,353
		Total current assets			74,157			71,128
Property and equipment, net					10,735			11,477
Intangible assets, net					34,399			42,862
Goodwill					22,905			80,836
Other assets					882			1,626
		Total assets		$	143,078		$	207,929
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	8,377		$	8,371
	Accrued compensation				5,175			6,530
	Other accrued liabilities				9,725			12,825
	Deferred revenue and customer deposits				14,284			15,553
	Current portion of accrued restructuring				1,806			2,112
	Borrowings under credit facility, current portion (Note 9)				14,900			—
		Total current liabilities			54,267			45,391
Noncurrent portion of accrued restructuring					2,670			506
Borrowings under credit facility (Note 9)					—			12,900
Other noncurrent liabilities					8,275			6,816
Deferred tax liability					1,128			1,130
Commitments and contingencies (Note 10)
Stockholders' equity:
	Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding				—			—
	Common stock, $0.001 par value; 100,000,000 shares authorized; 48,596,233 and 47,678,611 shares issued and outstanding in 2008 and 2007, respectively				49			48
	Additional paid-in capital				378,919			374,629
	Accumulated deficit				(302,412	)		(234,120	)
	Accumulated other comprehensive income				182			629
		Total stockholders' equity			76,738			141,186
			Total liabilities and stockholders' equity	$	143,078		$	207,929

See accompanying notes.

F-2

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

			Years Ended December 31,
			2008			2007			2006
			(In thousands, except per share data)
Revenue:
	Product revenue		$	85,149		$	82,961		$	69,248
	Service revenue			37,734			37,557			24,454
	License fees and contract revenue			11,171			20,189			14,169
		Total revenue		134,054			140,707			107,871
Costs and expenses:
	Cost of product revenue			52,178			49,760			45,459
	Cost of service revenue			24,739			22,357			14,917
	Cost of license revenue			1,477			2,515			219
	Research and development			19,921			24,791			24,591
	Selling, general and administrative			48,987			54,954			43,570
	Impairment of goodwill (Note 7)			43,365			—			—
	Amortization of intangible assets			8,313			10,106			8,842
	Restructuring charges, net			4,605			52			258
		Total costs and expenses		203,585			164,535			137,856
Operating loss				(69,531	)		(23,828	)		(29,985	)
	Interest income			259			650			908
	Interest expense			(1,053	)		(1,197	)		(430	)
	Gain on divestiture of product lines (Note 3)			2,119			—			—
	Other income, net			521			579			469
Loss before income taxes				(67,685	)		(23,796	)		(29,038	)
Benefit (provision) for income taxes				(607	)		(284	)		104
Net loss			$	(68,292	)	$	(24,080	)	$	(28,934	)
Net loss per common share, basic and diluted			$	(1.42	)	$	(0.51	)	$	(0.75	)
Shares used in computing net loss per common share, basic and diluted				48,114			47,301			38,743

See accompanying notes.

F-3

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

		Stockholders' Equity
		Common Stock													Accumulated Other Comprehensive Income/(Loss)
						Additional Paid-In Capital			Deferred Stock Compensation			Accumulated Deficit						Total Stockholders' Equity
		Shares		Amount
		(In thousands, except shares)
Balances at December 31, 2005			33,785,792	$	34	$	302,412		$	(3,003	)		(181,106	)	$	101		$	118,438
	Net loss		—		—		—			—			(28,934	)		—			(28,934	)
	Foreign currency translation loss		—		—		—			—			—			228			228
	Change in unrealized gain on available-for-sale securities		—		—		—			—			—			131			131
	Comprehensive loss																		(28,575	)
	Issuance of common stock and warrants upon acquisition of Xenogen		12,108,877		12		59,227			—			—			—			59,239
	Issuance of common stock pursuant to stock plans		917,646		1		2,736			—			—			—			2,737
	Deferred compensation reclass due to adoption of SFAS 123R		—		—		(3,003	)		3,003			—			—			—
	Stock-based compensation expense		—		—		5,570			—			—			—			5,570
Balances at December 31, 2006			46,812,315		47		366,942			—			(210,040	)		460			157,409
	Net loss		—		—		—			—			(24,080	)		—			(24,080	)
	Foreign currency translation gain		—		—		—			—			—			148			148
	Change in unrealized gain on available-for-sale securities		—		—		—			—			—			21			21
	Comprehensive loss																		(23,911	)
	Issuance of common stock pursuant to stock plans		866,296		1		2,526			—			—			—			2,527
	Stock-based compensation expense		—		—		5,161			—			—			—			5,161
Balances at December 31, 2007			47,678,611		48		374,629			—			(234,120	)		629			141,186
	Net loss		—		—		—			—			(68,292	)		—			(68,292	)
	Foreign currency translation gain		—		—		—			—			—			(400	)		(400	)
	Change in unrealized gain on available-for-sale securities		—		—		—			—			—			(47	)		(47	)
	Comprehensive loss																		(68,739	)
	Issuance of common stock pursuant to stock plans		917,622		1		710			—			—			—			711
	Stock-based compensation expense		—		—		3,580			—			—			—			3,580
Balances at December 31, 2008			48,596,233	$	49	$	378,919		$	—		$	(302,412	)	$	182		$	76,738

See accompanying notes.

F-4

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Years Ended December 31,
				2008			2007			2006
				(In thousands)
Operating activities
Net loss				$	(68,292	)	$	(24,080	)	$	(28,934	)
Adjustments to reconcile net loss to net cash from operating activities:
	Depreciation and amortization				12,042			13,990			12,528
	Stock-based compensation expense, net				3,580			5,161			5,570
	In-process research and development				—			—			2,898
	Gain on divestiture of product lines				(2,119	)		—			—
	Impairment of goodwill				43,365			—			—
	Non-cash restructuring charges, net				4,605			52			258
	Other charges				—			639			—
	Foreign currency transaction gains				(466	)		(576	)		(434	)
	Changes in operating assets and liabilities, net of acquisitions:
		Accounts receivable			2,125			1,402			(3,771	)
		Inventories			(1,213	)		(538	)		(2,054	)
		Prepaid expenses and other current assets			(254	)		304			2,021
		Accounts payable and other accrued liabilities			(2,432	)		1,005			1,526
		Accrued compensation			(1,555	)		(1,141	)		(1,149	)
		Deferred revenue and customer deposits			646			30			106
		Other noncurrent liabilities			1,457			979			224
		Payments of accrued restructuring obligations, net			(2,686	)		(7,339	)		(3,994	)
			Net cash from operating activities		(11,197	)		(10,112	)		(15,205	)
Investing activities
Purchases of marketable securities					(2,946	)		(2,366	)		(21,255	)
Proceeds from sales of marketable securities					400			4,102			11,529
Proceeds from maturities of marketable securities					2,711			8,344			20,205
Changes in restricted cash					—			—			3,624
Other assets					729			—			—
Purchases of property and equipment					(2,900	)		(2,087	)		(4,887	)
Purchase of intangible and other assets					—			(1,000	)		(86	)
Proceeds from divestiture of product lines					17,800			—			—
Acquisitions, net of cash acquired					—			—			6,991
			Net cash from investing activities		15,794			6,993			16,121
Financing activities
Payments of obligations under sale-leaseback arrangements					—			(98	)		(242	)
Borrowings under credit facility					4,000			8,500			8,587
Payments of credit facility, loans payable and other obligations					(2,000	)		(4,187	)		(8,587	)
Proceeds from issuance of common stock					1,075			2,793			2,566
			Net cash from financing activities		3,075			7,008			2,324
Effect of exchange rates on changes in cash and cash equivalents					286			186			298
Net increase in cash and cash equivalents					7,958			4,075			3,538
Cash and cash equivalents at beginning of year					15,709			11,634			8,096
Cash and cash equivalents at end of year				$	23,667		$	15,709		$	11,634
Supplemental disclosure of cash flow information
Interest paid				$	1,220		$	1,099		$	369
Income taxes paid				$	415		$	457		$	203

See accompanying notes.

F-5

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

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

Financial Statement Presentation and Principles of Consolidation

        Caliper's financial statements include the accounts of its wholly owned operating subsidiaries including Xenogen Corporation, Xenogen Biosciences Corporation (together, Xenogen Corporation and Xenogen Biosciences Corporation are herein referred to as Xenogen), NovaScreen Biosciences Corporation (NovaScreen), Caliper Life Sciences Limited (United Kingdom), Caliper Life Sciences Ltd. (Canada), Caliper Life Sciences N.V. (Belgium), Caliper Life Sciences GmbH (Germany), Caliper Life Sciences SA (France), and Caliper Life Sciences AG (Switzerland). All significant intercompany balances and transactions have been eliminated in consolidation.

        As shown in the consolidated financial statements, at December 31, 2008, Caliper has a total cash, cash equivalents and marketable securities balance of $26.7 million and an accumulated deficit of $302.4 million. On March 6, 2009, Caliper entered into a Second Amended and Restated Loan and Security Agreement (Credit Facility) with a bank. The accompanying financial statements assume that Caliper's cash, cash equivalents and marketable securities balance at December 31, 2008 and access to available capital under its Credit Facility are sufficient to fund operations through at least January 1, 2010, based upon its current operating plan. Caliper's ability to fund its operations through the end of 2009 will depend on many factors, including particularly its ability to increase product and service sales, control margins and operating costs and maintain its borrowing capacity and compliance with the covenants of its Credit Facility. As more fully described in Note 9, the amount of available capital that Caliper is able to access under the Credit Facility at any particular time is dependent upon a borrowing base formula, which ultimately relies on the underlying performance of the business. The Credit Facility also contains certain subjective rights which, if exercised by the lender, could result in any or all of the following; an acceleration of the maturity date of any outstanding debt, a reduction in borrowing capacity, and a termination of advances. If economic conditions worsen and Caliper's business performance is not as strong as anticipated, then Caliper could experience an event of default or a reduction in its borrowing capacity under the Credit Facility, which if not cured to the bank's satisfaction, could have a potential adverse impact on its ability to access capital under its Credit Facility in order to fund planned 2009 operations. If such events were to occur, Caliper's business would be adversely affected.

2. Summary of Significant Accounting Policies

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts

F-6

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash Equivalents and Marketable Securities

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

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

Customer Accounts Receivable

        Customer accounts receivable are stated at billed amounts, net of related reserves. No collateral is required on these trade receivables. The majority of sales made by Caliper do not include any return rights or privileges. Caliper has historically not experienced significant credit losses in connection with its customer receivables.

Inventories

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

Property and Equipment

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

F-7

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Impairment of Long-Lived Assets

        Caliper reviews long-lived assets and identifiable intangibles which have definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment exist, recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Recoverability measurement and estimating of undiscounted cash flows is done at the lowest possible level for which there is identifiable assets. If the aggregate undiscounted cash flows are less than the carrying value of the asset, the resulting impairment charge to be recorded is calculated based on the amount by which the carrying amount of assets exceeds the fair value of the assets. Caliper also performs an annual assessment of impairment for all indefinitely-lived intangible assets. If the fair value exceeds the carrying value of the asset, then the intangible is not impaired. If the fair value is less than the carrying value, then an impairment charge is recorded equal to the difference. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments

        The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other accrued expenses approximate fair value due to their short-term maturities. Caliper's available-for-sale marketable securities are carried at fair value based on quoted market prices, consistent with the requirements of Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities. Caliper's credit facility is carried at book value as outstanding amounts approximate fair value as monthly interest payments are indexed based on the prime rate.

        The fair values of Caliper's cash, cash equivalents and marketable securities are subject to change as a result of potential changes in market interest rates. The potential change in fair value for interest rate-sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities. Caliper estimates that such hypothetical adverse 100 basis point movement would not have materially impacted net income or materially affected the fair value of interest rate-sensitive instruments.

Revenue Recognition

General Policy

        Caliper recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and collectibility is reasonably assured or probable, as applicable. Product revenue is recognized upon passage of title, which for the majority of sales occurs when goods are shipped under Caliper's standard terms of "FOB origin." Revenue associated with customer product purchases delivered under terms of "FOB destination" is deferred until the product is received by the customer. Revenues on shipments subject to customer acceptance provisions are recognized only upon customer acceptance provided all other revenue recognition criteria are met. In general, sales made by Caliper do not include general return rights or privileges. In the limited circumstance where a right of return exists, Caliper recognizes revenue when the right has lapsed. Based upon Caliper's prior experiences, sales returns have not been significant and therefore a general provision for sales returns or other allowances is not recorded at the

F-8

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

time of sale. Revenue from services offered by Caliper is generally recognized as the services are performed (or, as applicable, ratably over the contract service term in the case of annual maintenance contracts). Provision is made at the time of sale for estimated costs related to Caliper's warranty obligations to customers.

        Our revenue arrangements may include the sale of an instrument, consumables, software, service, technology licenses, installation and training. Revenue arrangements may include one of these single elements, or may incorporate one or more elements in a single transaction or combination of related transactions. Caliper applies the following guidance to its various revenue arrangements:

        Emerging Issues Task Force (EITF) Issue No.00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21). When multiple contractual elements exist in an arrangement, and software is incidental, the contractual elements are divided into separate units of accounting if the deliverables in the arrangement meet certain criteria under EITF 00-21. The criteria applied to multiple element arrangements are whether (a) each delivered element has standalone value to the customer, (b) there is objective and reliable evidence of fair value of the undelivered elements, and, if applicable, (c) delivery or performance of the undelivered elements is probable and within the control of Caliper. Consideration for the arrangement is allocated among the separate units of accounting based on their relative fair values, or based upon the residual method when fair value exists only for remaining undelivered items, and the amount of revenue allocable to the delivered item(s) is recognized in accordance with the requirements of SAB 104, Revenue Recognition (a replacement of SAB 101) (SAB 104). In either case, the amount of arrangement consideration allocated to the delivered item(s) is limited to the amount that is not contingent on Caliper delivering additional products or services.

        Statement of Position 97-2, Software Revenue Recognition and EITF Issue No.03-5, Applicability of AICPA Statement of Position 97-2 to Non-Software Deliverables in an Arrangement Containing More-than-Incidental Software (SOP 97-2). When Caliper's revenue arrangements include the sale of an instrument in which the software is more than incidental, revenue is recognized in accordance with SOP 97-2. Caliper allocates revenue on the arrangement between software and non-software related deliverables based on fair value as required by EITF 03-5. Revenue allocated to the software deliverable is recognized in accordance with SOP 97-2. If there is vendor-specific objective evidence of the fair value(s) of the undelivered item(s) in an arrangement, but no such evidence for the delivered item(s), Caliper uses the residual method to allocate the arrangement consideration associated with the software deliverables. Revenue allocated to non-software deliverables is further allocated based on the separation criteria established in EITF 00-21. When items included in a multiple-element arrangement represent separate units of accounting and there is objective and reliable evidence of fair value for all items included in the arrangement, Caliper allocates the arrangement consideration to the individual items based on their relative fair values. If there is objective and reliable evidence of the fair value(s) of the undelivered item(s) in an arrangement, but no such evidence for the delivered item(s), Caliper uses the residual method to allocate the arrangement consideration. In either case, the amount of arrangement consideration allocated to the delivered item(s) is limited to the amount that is not contingent on Caliper delivering additional products or services.

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

F-9

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

criteria. Caliper allocates revenues between product and service revenues in the income statement for each of the elements in an arrangement based on their relative fair values, or based upon the residual method when fair value exists only for remaining undelivered items.

Product Revenue

        Product revenue is recognized upon the shipment and transfer of title to customers and is recorded net of discounts and allowances. Revenues on shipments subject to customer acceptance provisions are recognized only upon customer acceptance provided all other revenue recognition criteria are met. Customer product purchases are generally delivered under standardized terms of "FOB origin" with the customer assuming the risks and rewards of product ownership at the time of shipping from Caliper's warehouse. Revenue associated with customer product purchases delivered under terms of "FOB destination" is deferred until product is delivered to the customer. In accordance with EITF 00-21 or SOP 97-2, Caliper defers the fair value of any elements that remain undelivered after product shipment and/or acceptance (as applicable), such as remaining services to be performed.

Service and Annual Maintenance Agreements

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

Licensing and Royalty

        Revenue from up-front license fees is recognized when the earnings process is complete and no further obligations exist. If further obligations exist, the up-front license fee is recognized ratably over the obligation period. Royalties under licenses are recorded as earned in accordance with contract terms, when third-party results are reliably measured and collectibility is reasonably assured.

Contract Revenue

        Revenue from contract research and development services is recognized as earned based on the performance requirements of the contract. Non-refundable contract fees, which are neither time and materials- nor time and expense-based, nor tied to substantive milestones, are recognized using the proportional performance method, subject to the consideration of the guidance in SAB 104.

Segment Reporting

        Caliper currently operates in one business segment, the development and commercialization of life science instruments and related consumables and services for use in drug discovery and other life sciences research and development. Caliper's entire business is comprehensively managed by a single management team that reports to the Chief Executive Officer. Caliper does not operate its core lines of product and services as separate business entities, nor does it accumulate discrete financial

F-10

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

information with respect to separate product and service areas. As such, Caliper does not have separately reportable segments as defined by SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. Refer to Note 17 for discussion regarding Caliper's geographical activities.

Goodwill

        In accordance with SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, goodwill and certain other intangibles are not amortized but are instead subject to periodic impairment assessments. Caliper performs a test for the impairment of goodwill annually following the related acquisition, or more frequently if events or circumstances indicate that goodwill may be impaired. Because Caliper has a single operating segment which is the sole reporting unit, Caliper performs this test by comparing the fair value of Caliper with its carrying value, including goodwill. If the fair value exceeds the carrying value, goodwill is not impaired. If the book value exceeds the carrying value, Caliper would calculate the potential impairment loss by comparing the implied fair value of goodwill with the book value of goodwill. If the implied fair value of goodwill is less than the book value, an impairment charge would be recorded equal to the difference. Caliper recorded an impairment charge of $43.4 million in 2008. Refer to Note 7 for further discussion.

Foreign Currency Translation

        The financial statements of Caliper's foreign subsidiaries are translated in accordance with SFAS No. 52, Foreign Currency Translation. In translating the accounts of the foreign subsidiaries into U.S. dollars, stockholders' equity is translated at historical rates, while assets and liabilities are translated at the rate of exchange in effect as of the end of the period. Revenue and expense transactions are translated using the weighted-average exchange rate in effect during the period in which they arise. The resulting foreign currency translation adjustments are reflected as a separate component of stockholders' equity. Cumulative translation adjustments included in stockholders' equity as of December 31, 2008 and 2007 were $127,000 and $526,000, respectively.

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

Research and Development

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

        In August 2006, in connection with the Xenogen acquisition, Caliper expensed $2.9 million of in-process research and development costs within research and development expenses in the accompanying Statement of Operations. Projects in process as of the date of acquisition were evaluated in the context of SFAS No. 2, Accounting for Research and Development Costs, and FASB Interpretation No. 4, Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase

F-11

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Method, which require costs to purchase in-process research and development be expensed as incurred. Fair value was determined by an independent appraisal and was based on future discounted cash flows.

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 SFAS 5, Accounting for Contingencies and FASB Interpretation No. 45 (FIN45), 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 Caliper's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. Caliper periodically assesses the adequacy of its recorded warranty liabilities and adjusts amounts as necessary.

Other Income (Expense)

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

	Years Ended December 31,
	2008		2007			2006
Realized gain (loss) on marketable securities, net	$	16	$	(7	)	$	(22	)
Foreign currency transaction gains, net		466		576			434
Other income, net		38		10			57
	$	520	$	579		$	469

Guarantees and Indemnifications

        Caliper recognizes liabilities for guarantees in accordance with FIN 45 that requires upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligations it assumes under that guarantee.

        Caliper has certain indemnification obligations related to the divestiture of the Pharmaceutical Development and Quality ("PDQ") product line and the AutoTrace product line. The divestiture agreements also contain representations, warrants and indemnities that are customary in asset sales transactions.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

paid. Caliper believes the fair value of these indemnification agreements is minimal. Accordingly, Caliper has not recorded any liabilities for these agreements as of December 31, 2008 and 2007.

Shipping and Handling Fees and Costs

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

Advertising Expense

        Caliper expenses costs of advertising as incurred. Advertising costs were $1.8 million, $1.9 million and $1.4 million during 2008, 2007 and 2006, respectively.

Risk Management

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

Significant Concentrations, Credit and Other Risks

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

        Caliper's allowance for doubtful accounts at December 31, 2008 and 2007 was $0.7 million and $1.3 million, respectively. Caliper grants credit to customers based on evaluations of their financial condition, generally without requiring collateral. However, credit risk is reduced through Caliper's efforts to monitor its exposure for credit losses and maintain allowances, if necessary. In 2008 and 2007, no customer accounted for greater than 10% of total revenues or gross accounts receivable. Caliper's policy is to perform an analysis of the recoverability of its trade accounts receivable at the end of each reporting period and to establish allowances for those accounts considered uncollectible. Caliper analyzes historical bad debts, customer concentrations, customer credit-worthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.

        Caliper's products include certain components that are currently sourced from single vendors. Caliper believes that other vendors would be able to provide similar equipment, however the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

qualification of such vendors may require start-up time. In order to mitigate any adverse impacts from a disruption of supply, Caliper attempts to maintain an adequate supply of critical single-sourced equipment.

Comprehensive Income (Loss)

        Caliper accounts for comprehensive income (loss) in accordance with SFAS No. 130, Reporting Comprehensive Income. The components of comprehensive income (loss) are unrealized gains and losses on available-for-sale securities and foreign currency translation adjustments. Comprehensive income (loss) has been disclosed in the Statement of Stockholders' Equity. As of December 31, 2008, accumulated other comprehensive income included $127,000 in foreign currency translation gains and $56,000 in unrealized gains on available-for-sale securities. As of December 31, 2007, accumulated other comprehensive income included $526,000 in foreign currency translation gains and $103,000 in unrealized gains on available-for-sale securities.

Stock-Based Compensation

        On January 1, 2006, Caliper adopted 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 the Black-Scholes-Merton based option-pricing model.

        Prior to adopting SFAS 123R, Caliper accounted for stock-based compensation under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25). The modified prospective method was applied in adopting SFAS 123R and, accordingly, periods prior to adoption have not been restated and therefore comparability between periods has been affected.

Net Loss Per Share

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

        Common stock equivalents equal to 14.4, 14.0 and 13.5 million shares (prior to the application of the treasury stock method) were excluded from the computation of net loss per share in each of the three year periods ended December 31, 2008, 2007 and 2006, respectively, as they would have an antidilutive effect due to Caliper's net loss.

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 difference 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

positions as short-term liabilities within accrued expenses. During the fiscal years ended December 31, 2008, 2007 and 2006, Caliper's tax provisions primarily relate to foreign taxes in jurisdictions where its wholly owned subsidiaries are profitable.

Recent Accounting Pronouncements

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

        In December 2007, the FASB issued SFAS No. 141(R) (SFAS 141R), Business Combinations. This Standard will require an acquiring company to measure all assets acquired and liabilities assumed, including contingent considerations and all contractual contingencies, at fair value as of the acquisition date. In addition, an acquiring company is required to capitalize IPR&D and either amortize it over the life of the product, or write it off if the project is abandoned or impaired. The Standard is effective for transactions occurring on or after January 1, 2009.

        In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets, or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008 and early adoption is prohibited. Caliper is evaluating the impact of the pending adoption of FSP FAS 142-3 on our consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Divestitures

PDQ Product Line Divestiture

        On October 29, 2008, Caliper entered into an Asset Sale and Purchase Agreement (the "Purchase Agreement") with Sotax Corporation, ("Sotax") a Virginia corporation and a privately owned subsidiary of SOTAX Holding A.G. based in Switzerland. The Purchase Agreement provides for the sale of Caliper's PDQ product line to Sotax for a purchase price of approximately $15.8 million, including $13.8 million in cash together with certain assumed liabilities upon closing which were approximately $2.0 million (the "Purchase Price"). In addition, $1.0 million of the Purchase Price was placed into an escrow account until the first anniversary of November 10, 2008, the closing date. The escrow secures Caliper's indemnification obligations to Sotax, if any, under the Purchase Agreement. The Purchase Agreement also contains representations, warranties and indemnities that are customary in asset sale transactions. Caliper realized approximately $12.6 million in net cash proceeds from the sale of its PDQ product line upon closing, after the escrow account deposit and transaction expenses. As part of this transaction, Caliper sold approximately $0.5 million in net assets, which consisted primarily of inventory net of deferred revenue and accrued expenses. Caliper recorded a gain on the sale of the PDQ product line, based upon the net proceeds in excess of total divested net assets, which included $10.5 million of goodwill, of approximately $1.4 million. Goodwill was allocated to the product line on a relative fair value basis.

AutoTrace Product Line Divestiture

        On November 10, 2008, Caliper entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Dionex Corporation ("Dionex"), a publicly traded Delaware corporation. The Asset Purchase Agreement provides for the sale of Caliper's AutoTrace product line to Dionex for a purchase price of approximately $5.0 million. As part of this transaction, Caliper sold approximately $0.3 million in net assets, which consisted primarily of inventory net of deferred revenue and accrued expenses. Caliper recorded a gain on the sale of the AutoTrace product line, based upon the net proceeds in excess of total divested net assets, which included $3.8 million of goodwill, of approximately $0.7 million. Goodwill was allocated to the product line on a relative fair value basis.

4. Cash, Cash Equivalents and Marketable Securities

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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

(1)

Reported as cash and cash equivalents

(2)

Reported as marketable securities

        The following is a summary of the cost and estimated fair value of available-for-sale securities at December 31, 2008, by contractual maturity (in thousands):

		Amortized Cost		Estimated Fair Value
Mature within one year		$	2,829	$	2,801
Mature after one year through three years			235		233
	Total	$	3,064	$	3,034

        The following is a summary of cash and available-for-sale securities as of December 31, 2007 (in thousands):

	Amortized Cost		Gross Unrealized Losses			Gross Unrealized Gains		Estimated Fair Value
Cash and money market funds(1)	$	15,709	$	—		$	—	$	15,709
Corporate debt securities(2)		3,245		(1	)		2		3,246
	$	18,954	$	(1	)	$	2	$	18,955

(1)

Reported as cash and cash equivalents

(2)

Reported as marketable securities

        Gross realized gains and losses on sales of available-for-sale securities have been included within other income in Caliper's statement of operations and were not material in 2008, 2007 and 2006. Caliper utilizes the specific identification basis to reclassify amounts out of accumulated other comprehensive income into earnings.

        As of December 31, 2008 and 2007, Caliper held available-for-sale securities having an aggregate value of $3.0 million and $3.2 million, respectively. Unrealized gains and losses pertaining to underlying individual securities were not material in either year. Although available to be sold to meet operating

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CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

needs or otherwise, securities are generally held through maturity. Therefore, such unrealized losses are deemed temporary and have been included within accumulated other comprehensive income.

        In September 2006, the 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 October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of SFAS No. 157 in an inactive market and illustrates how an entity would determine fair value when the market for a financial asset is not active. The Staff Position is effective immediately and applies to prior periods for which financial statements have not been issued, including interim or annual periods ending on or before September 30, 2008. The implementation of SFAS 157-3 did not have a material impact on our consolidated financial position, results of operations and cash flows.

        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 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

        On December 31, 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		$	14,867	$	14,867	$	—	$	—
Commercial paper			1,023		—		1,023		—
U.S. corporate notes and bonds			1,484		—		1,484		—
Other			528		—		528		—
	Total	$	17,902	$	14,867	$	3,035	$	—

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

        Caliper held four investments in debt securities that were in an unrealized loss position as of December 31, 2008. During the twelve months ended December 31, 2008, a total unrealized loss of $47,000 was recorded to accumulated other comprehensive income within the accompanying balance sheet, including an unrealized loss of $29,000 in one investment. Based on Caliper's evaluation of its investments, management does not believe any individual unrealized loss at December 31, 2008 represents an other-than-temporary impairment as these unrealized losses are primarily attributable to changes in the interest rates and the ongoing credit crisis which has created volatile market conditions. Caliper currently has both the intent and ability to hold the securities for a time necessary to recover the amortized cost.

5. Inventories

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

	December 31,
	2008		2007
Raw material	$	10,173	$	11,228
Work-in-process		907		561
Finished goods		6,499		7,783
Inventories	$	17,579	$	19,572

        Caliper reserves or writes off the cost of inventory which it specifically identifies and considers to be obsolete or excess. Caliper defines obsolete inventory as inventory that will no longer be used in the manufacturing process. Excess inventory is generally defined as inventory in excess of projected usage,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Inventories (Continued)

and is determined using management's best estimate of future demand at the time, based upon information then available to Caliper. Caliper uses a twelve-month demand forecast and, in addition to the demand forecast, Caliper also considers: (1) parts and subassemblies that can be used in alternative finished products, (2) parts and subassemblies that are unlikely to be impacted by engineering changes, and (3) known design changes which would reduce Caliper's ability to use the inventory as planned. During 2008, 2007 and 2006, respectively, Caliper recorded charges of $1.7 million, $1.3 million and $0.2 million, respectively, to cost of product revenues for excess and obsolete inventories.

6. Property and Equipment

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

		December 31,
Asset Classification	Estimated Useful Life	2008			2007
Machinery and equipment	2–5 years	$	10,541		$	17,452
Computers and information systems	3–5 years		7,267			7,542
Office equipment, furniture and fixtures	5 years		1,775			2,112
Leasehold improvements	Shorter of estimated useful life or life of lease		13,863			13,004
			33,446			40,110
Accumulated depreciation and amortization			(22,711	)		(28,633	)
Property and equipment, net		$	10,735		$	11,477

        Depreciation expense, including amortization of assets under capital leases, was $3.6 million, $3.8 million and $3.6 million for the years ended December 31, 2008, 2007, and 2006, respectively. The amortization of assets recorded under capital leases is not material and is included within depreciation expense in the current period.

7. Goodwill and Intangible Assets

Goodwill

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Goodwill and Other Intangible Assets (Continued)

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

        Caliper's annual goodwill impairment assessment has historically been completed at the beginning of the fourth quarter. With the sales of its PDQ and AutoTrace product lines in the fourth quarter of 2008, which met the criteria for assets held for sale in October 2008, prior to the goodwill impairment test date, Caliper first determined the amount of goodwill ($14.3 million) that was to be allocated to these divestitures based upon a relative fair value basis considering their recent transaction values, and then applied its annual goodwill impairment analysis to the remaining goodwill balance ($66.3 million), which resulted in the determination that impairment had occurred. The second step of the goodwill impairment test involved Caliper calculating the implied goodwill for the entity. The carrying value of the goodwill assigned to the overall business exceeded the implied fair value of goodwill, resulting in a goodwill impairment of $43.4 million.

        Goodwill is not amortized, but is reviewed for impairment at least annually. The results of this year's impairment test are as of a point in time. If the future growth and operating results of our business are not as strong as anticipated and/or Caliper's market capitalization declines, this could impact the assumptions used in calculating the fair value in subsequent years. To the extent goodwill is impaired, its carrying value will be further written down to its implied fair value and a charge will be made to Caliper's earnings. Such an impairment charge would materially and adversely affect Caliper's GAAP reported operating results. As of December 31, 2008, Caliper had recorded goodwill of $22.9 million in its consolidated balance sheet. The goodwill impairment charge is non-cash in nature and does not affect Caliper's liquidity, cash flows from operating activities, or debt covenants, or have any impact on future operations. No impairment was identified in fiscal years 2007 and 2006.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Goodwill and Other Intangible Assets (Continued)

Intangibles

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

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

        As of December 31, 2007, intangible assets consist of the following (in thousands):

Asset Classification		Weighted Average Amortization Period	Cost		Accumulated Amortization			Net
Amortized intangible assets:
	Core technologies	8.8 years	$	30,113	$	(4,790	)	$	25,323
	Developed and contract technologies	5.7 years		25,633		(16,206	)		9,427
	Customer contracts, lists and relationships	8.3 years		10,110		(5,103	)		5,007
Other intangibles		1.9 years		477		(270	)		207
		7.2 years		66,333		(26,369	)		39,964
Trade name		Indefinite life		2,898		—			2,898
	Total intangible assets		$	69,231	$	(26,369	)	$	42,862

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Goodwill and Other Intangible Assets (Continued)

        Amortization expense was $8.5 million, $10.2 million and $7.1 million during the years ended December 31, 2008, 2007 and 2006, respectively. Scheduled amortization in future periods is as follows (in thousands):

Years ending December 31:
	2009	$	6,216
	2010		5,806
	2011		5,417
	2012		4,855
	2013		4,159
Thereafter			5,048
		$	31,501

8. Other Current and Non-current Liabilities

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

		December 31,
		2008		2007
Accrued legal		$	588	$	2,461
Accrued warranty			1,362		1,684
Accrued VAT and other taxes			1,462		1,716
Accrued royalties			1,501		1,258
Deferred rent			555		1,310
Accrued other			4,257		4,396
	Total other accrued liabilities	$	9,725	$	12,825
Deferred rent		$	5,781	$	3,850
Deferred revenue			2,290		2,815
Other			204		151
	Total other noncurrent liabilities	$	8,275	$	6,816

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Warranty Obligation

        Changes in Caliper's warranty obligation during the years ended December 31, 2008 and 2007 are as follows (in thousands):

Balance, December 31, 2006	$	2,235
Warranties issued during the period		1,145
Settlements and adjustments made during the period		(1,696	)
Balance, December 31, 2007		1,684
Warranties issued during the period		1,767
Settlements and adjustments made during the period		(1,670	)
Adjustment for obligations related to product line divestitures		(419	)
Balance, December 31, 2008	$	1,362

Deferred Rent

        Deferred rent is principally comprised of i) deferred obligations established as a result of lease incentives, including tenant improvement financing and rent holidays (i.e., free rent), ii) deferred obligations related to lease agreements with built-in rent escalations over time which are required to be accounted for on a straight-line basis under FASB No. 13, Accounting for Leases, and established accruals for above market lease costs accounted for in connection with our acquisition of Xenogen in 2006. Under i) above, the improvements funded by the landlord(s) are treated as lease incentives under FASB Technical Bulletin No. 88-1, Issues Relating to Accounting for Leases. Accordingly, the funding received from the landlord was recorded as fixed asset additions and a deferred rent liability on the consolidated balance sheet. The deferred rent liability is being amortized as a reduction to rent expense over the life of the lease. In accordance with FASB No. 95, Statement of Cash Flows, cash flows from the landlord for the reimbursement of improvements have been reported within cash from operating activities, while cash flows remitted for the acquisition of leasehold improvements are classified within investing activity cash flows. As of December 31, 2008, deferred rent included $5.2 million in deferred lease incentives, and $1.0 million of above-market rent obligations.

9. Credit Facility (Subsequent Event)

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Credit Facility (Subsequent Event) (Continued)

unbilled receivables, and receivables aged over 90 days from invoice date. The Credit Facility matures on November 30, 2010. As of December 31, 2008, $14.9 million was outstanding under the previous credit facility. The Credit Facility serves as a source of capital for ongoing operations and working capital needs.

        The Credit Facility includes traditional lending and reporting covenants including that certain financial covenants applicable to liquidity and earnings are to be maintained by Caliper and tested as of the last day of each quarter. As of December 31, 2008, Caliper was not in compliance with one of its covenants for which Caliper subsequently received a waiver from the bank. The Credit Facility also includes a net liquidity clause. Under this clause, if Caliper's cash, cash equivalents and marketable securities, held at the bank, net of debt outstanding under the Credit Facility, is less than $0.5 million (Net Liquidity), the bank will apply all of Caliper's accounts receivable collections, received within its lockbox arrangement with the bank, to the outstanding principal. Such amounts are eligible to be re-borrowed by Caliper subject to the borrowing base limit described above. Based on Caliper's current forecast, it expects that it will operate under the Net Liquidity clause beginning in the third quarter of 2009 and continue in effect for the remainder of 2009.

        The Credit Facility also includes subjective rights for the bank to accelerate the maturity of the debt, lower the borrowing base or stop making advances, which are typical within asset based lending arrangements. Caliper does not believe the bank will exercise these rights as long as it is meeting its covenants and achieving its forecast. The Credit Facility also includes several potential events of default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at the interest rate in effect as of the date of default plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank's right to declare all outstanding obligations immediately due and payable. Should an event of default occur, including the exercise of a material adverse change condition, and based on such default the bank were to decide to declare all outstanding obligations immediately due and payable, Caliper may be required to significantly reduce its costs and expenses, sell additional equity or debt securities, or restructure portions of its business which could involve the sale of certain business assets. The sale of additional equity or convertible debt securities may result in additional dilution to Caliper's stockholders. Furthermore, additional capital may not be available on terms favorable to Caliper, if at all. In this circumstance, if Caliper could not significantly reduce its costs and expenses, obtain adequate financing on acceptable terms when such financing is required or restructure portions of its business, Caliper's business would be adversely affected. In addition, the amount of available capital that Caliper is able to access under the Credit Facility at any particular time is dependent upon the borrowing base formula, which ultimately relies on the underlying performance of the business. If economic conditions worsen and its business performance is not as strong as anticipated, then Caliper could experience an event of default or a reduction in borrowing capacity under the Credit Facility, which if not cured to the bank's satisfaction, could have a potential adverse impact on its ability to access capital under its Credit Facility fund in order to fund 2009 operations. If such events were to occur, Caliper's business would be adversely affected.

        Outstanding obligations under the Credit Facility were $14.9 million and $12.9 million as of December 31, 2008 and 2007, respectively. The Credit Facility was classified as non-current as of December 31, 2007, based upon the then maturity date of June 2009. As of December 31, 2008, the Credit Facility is classified as short-term consistent with Caliper's intent to utilize the Credit Facility to fund operations and working capital needs on a revolving loan basis as a result of operating under the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Credit Facility (Subsequent Event) (Continued)

Net Liquidity provision described above. Interest is due monthly and has ranged from 3.75% to 8.75% in 2008 and 2007, respectively. At December 31, 2008, Caliper had approximately $8.4 million of additional amounts that it could borrow under the Credit Facility.

10. Commitments and Contingencies

Leases

        As of December 31, 2008, future minimum payments under operating leases (excluding idled facilities accounted for within accrued restructuring) were as follows (in thousands):

Years ending December 31:
	2009	$	7,012
	2010		6,737
	2011		7,289
	2012		6,204
	2013		7,972
Thereafter			12,613
	Total minimum lease payments	$	47,827

        Rent expense relating to operating leases was approximately $6.0 million in 2008, $5.8 million in 2007, and $4.6 million in 2006.

Letters-of-Credit

        As of December 31, 2008, Caliper had outstanding standby letters-of-credit, which restrict available borrowing under its Credit Facility, in the outstanding amount of $1.7 million securing facility operating leases.

Inventory Purchases

        As of December 31, 2008 and 2007, Caliper had a non-cancelable purchase commitment in the amount of approximately $0.4 million and $0.6 million, respectively, with its foreign supplier for the purchase of glass stock used in the manufacture of certain types of its chips.

        As of December 31, 2008 and 2007, Caliper had non-cancelable purchase commitments in the amount of approximately $2.9 million and $3.2 million, respectively, with its CCD camera suppliers and filter supplier for the purchase of parts used in the manufacture of in vivo imaging instrumentation.

Royalty Arrangements

        On August 9, 2006, Stanford University provided Xenogen with the results of an audit performed pursuant to the exclusive license agreement between Stanford and Xenogen. The audit report, which was prepared by a third party consultant, asserted certain claims of underpayments during the period from 2002 through March 31, 2006 based upon the consultant's interpretation of the license. Upon review of the audit report, Caliper determined that additional royalties of $71,000 were owed to Stanford, and paid this obligation in 2006. Caliper is contesting the remaining payment obligation that is claimed in the Stanford audit report, and as a result, has not accrued for any additional liability. The

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Commitments and Contingencies (Continued)

amount of any remaining contingent obligation, if any, cannot currently be estimated, nor does Caliper believe that it is probable that a liability exists. At any time, either party may choose binding arbitration to resolve any dispute over the amount of back royalties owed, if any.

        Caliper has entered into royalty arrangements with several third parties whereby Caliper owes royalties that range from 2% to 15% related to revenues that are derived pursuant to in-licensed technologies. Royalty obligations are expensed when incurred or over the minimum royalty periods. Some of the arrangements include minimum royalties over a defined term. The future minimum royalty payments are as follows (in thousands):

Years ending December 31:
	2009	$	352
	2010		351
	2011		327
	2012		326
	2013		319
Thereafter			1,221
	Total minimum royalty payments	$	2,896

11. Restructuring Activities

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

	Severance and Related			Facilities			Total
Balance, December 31, 2005	$	—		$	7,230		$	7,230
Restructuring charges		—			124			124
Established obligations with Xenogen		3,451			1,046			4,497
Assumed obligations with Xenogen		—			981			981
Interest accretion and adjustments		—			322			322
Payments		(410	)		(3,584	)		(3,994	)
Balance, December 31, 2006		3,041			6,119			9,160
Restructuring credits		(187	)		612			425
Interest accretion and adjustments		—			372			372
Payments		(2,845	)		(4,494	)		(7,339	)
Balance, December 31, 2007		9			2,609			2,618
Restructuring charges		—			4,605			4,605
Interest accretion and adjustments		—			(61	)		(61	)
Payments		(9	)		(2,677	)		(2,686	)
Balance, December 31, 2008	$	—		$	4,476		$	4,476

        The restructuring liability as of December 31, 2008 reflects the minimum future payment obligations related to base lease rentals and operating charges, net of sub lease income, over the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Restructuring Activities (Continued)

remaining lease lives through April 2011, discounted at the borrowing rate in effect at the time of the restructuring event (5% or 8.75%). The remaining facility obligations are as follows (in thousands):

Years ending December 31:
	2009	$	1,948
	2010		1,781
	2011		421
	2012		433
	2013		407
Total minimum payments			4,990
Less: Amount representing interest			(514	)
Present value of future payments			4,476
Less: Current portion of obligations			1,806
Noncurrent portion of obligations		$	2,670

        Included within the above obligations is estimated future sublease income of $0.8 million in 2009 and $1.0 million in 2010 through 2013.

        The restructuring obligations reflected above resulted from the following actions:

Facility Closures

        During the period from May 2003 through December 2006, Caliper consolidated certain facilities in Mountain View, California, 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 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. As of June 30, 2008, there were no remaining obligations as the leases for these facilities lapsed.

        During the first quarter of 2008, Caliper initiated the consolidation of its West Coast business operations to reduce overall facility costs and improve productivity and effectiveness of its research and development spending. The consolidation plan entailed vacating approximately 36,500 square feet of currently occupied space in Mountain View, California, which was completed in September 2008. This facility closure was accounted for in accordance with SFAS 146, pursuant to which Caliper recorded a liability equal to the fair value of the remaining lease payments as of the cease-use date. Fair value was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 5.5%) for the space no longer occupied, considering future estimated sublease income, estimated broker fees and required tenant improvements. Caliper calculated the fair value as $4.6 million and recorded this amount within restructuring charges, within the accompanying consolidated income statement. The restructuring charge includes a $2.8 million charge recorded during the third quarter along with a revision to the sublease assumptions in the fourth quarter which resulted in an additional $1.8 million charge, based on the further deterioration of the sublease market in Mountain View, California.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Restructuring Activities (Continued)

Xenogen Acquisition

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

•

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

•

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity

Preferred Share Purchase Rights Plan

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

Warrants

        In connection with Caliper's 2006 acquisition of Xenogen, Caliper granted Xenogen stockholders an aggregate of 4,701,733 warrants, and reserved an additional 411,814 warrants for potential issuance upon the exercise of Xenogen warrants (see below) which were assumed by Caliper. Each warrant granted permits the holder to acquire one Caliper common share at an exercise price of $6.79 per share through August 9, 2011. Caliper valued the issued warrants using the Black-Scholes-Merton formula at $1.16 per warrant, or approximately $5.5 million in total for all issued and outstanding warrants. This value is included in additional paid-in capital. Key assumptions used to value the warrants issued were as follows:

Fair market value at issuance	$4.25
Exercise price	$6.79
Expected term	5 years
Volatility	40%
Risk free rate of return	4.87%

        As discussed above, Caliper also assumed certain outstanding Xenogen warrants. As of August 9, 2006, there were 1,830,581 Xenogen warrants outstanding, which were exercisable at $2.91 to $40.75 per warrant. No Xenogen warrants were exercised during 2008. Upon the potential exercise of these warrants, the holders are entitled to receive that number of Caliper shares and warrants that such

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

holder would have been entitled to receive as a Xenogen stockholder as of the acquisition date. The termination date of the Caliper warrants that are to be issued upon the eventual exercise of the Xenogen warrants may not be extended beyond the 5 year expiration date (August 9, 2011).

        The following table summarizes information with respect to warrants assumed from Xenogen which remain outstanding and exercisable at December 31, 2008:

Expiration Date	Exercise Price		Number of Xenogen Warrants		Equivalent Caliper Warrants (.2249 exchange ratio)		Equivalent Caliper Shares (.5792 exchange ratio)
August 2, 2012	$	2.91		111,340		25,041		64,488
August 15, 2010	$	3.29		1,412,562		317,685		818,156
April 30, 2013	$	3.64		288,044		64,781		166,835
October 7, 2009 and February 28, 2010	$	15.82		7,900		1,777		4,576
October 18, 2011	$	40.74		8,159		1,835		4,726
April 28, 2010	$	40.75		2,576		579		1,492
				1,830,581		411,698		1,060,273

Stock Plans

        The following is a summary of Caliper's stock plans that are in place as of December 31, 2008:

Plan	Plan Shares Authorized		Plan Shares Available		Awards Outstanding		Common Stock Reserved for Future Issuance
Option Plans:
1999 Equity Plan		17,034,894		4,474,247		6,926,395		11,400,642
1999 Directors' Plan		808,917		337,082		434,251		771,333
2001 Non-Statutory Stock Option Plan		500,000		189,516		307,535		497,051
Acquisition Plan		900,000		80,000		600,000		680,000
		19,243,811		5,080,845		8,268,181		13,349,026
1999 Purchase Plan		2,878,338		568,236		—		568,236

        In October 1999, Caliper's Board of Directors and stockholders adopted the 1999 Equity Incentive Plan (1999 Equity Plan). The 1999 Equity Plan provided for an automatic annual increase in the shares reserved for issuance for a period of ten years starting in 2000, by the greater of 5% of outstanding shares on a fully-diluted basis or the number of shares that have been made subject to awards granted under the 1999 Equity Plan during the prior 12-month period. Over the 10-year period, the maximum number of shares of common stock subject to incentive stock option grants is limited to 12,820,000 shares. Stock awards under the 1999 Equity Plan may be granted in the form of stock options (incentive and nonstatutory stock options) or stock bonuses (restricted stock and restricted stock units). Each restricted stock unit represents the recipient's right to receive a stock bonus of one share of common stock, subject to vesting or other performance considerations. Stock awards cancelled under the 1999 Equity Plan are made available for future grants. Options granted under the Plan generally have a 10-year term and are subject to vesting provisions as determined by Caliper's Board of Directors. The majority of employee equity awards carry a 4-year vesting term.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

        In October 1999, Caliper's Board of Directors and stockholders adopted the 1999 Non-Employee Directors' Stock Option Plan (1999 Directors' Plan) which, as amended and approved by stockholders in June 2007, provides for the automatic grant of options and restricted stock units to non-employee directors. The number of shares reserved for issuance will automatically increase by the greater of 0.3% of outstanding shares on a fully-diluted basis or the number of shares subject to options granted under the 1999 Directors' Plan during the prior 12-month period.

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

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

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

        The 1999 Purchase Plan permits eligible employees to acquire shares of Caliper's common stock through payroll deductions of up to 10% of their gross earnings. No employee may participate in the 1999 Purchase Plan if, immediately after the grant, the employee has voting power over 5% or more of the outstanding capital stock. The Board may specify offerings of up to 27 months under the terms of the plan; however, Caliper's Board of Directors has currently limited offering periods to six months. Unless the Board determines otherwise, common stock may be purchased at the lower of 85% of the fair market value of Caliper's common stock on the first day of the offering or 85% of the fair market value of Caliper's common stock on the purchase date. The initial offering period began on the effective date of the initial public offering. Caliper issued 313,477, 296,549 and 249,414 shares under the 1999 Purchase Plan in the years 2008, 2007 and 2006, respectively, at a weighted average price of $2.05, $3.91and $4.36, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

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

					Outstanding
										Weighted Average Exercise Price
		Available			Number of Shares			Exercise Price
Balance at December 31, 2007			6,254,994			7,806,489		$	0.00–162.00	$	5.71
	Authorized		—			—			—		—
	Granted		(1,944,556	)		1,944,556			0.00–4.09		3.59
	Exercised		—			(342,238	)		0.62–3.78		1.26
	Vested Restricted Stock		—			(264,091	)		—		—
	Un-vested Repurchased		—			(106,128	)		—		—
	Forfeited		300,367			(300,367	)		3.27–58.44		6.36
	Canceled		470,040			(470,040	)		2.59–7.90		5.13
Balance at December 31, 2008			5,080,845			8,268,181			0.00–162.00		5.42
Exercisable at December 31, 2008						5,076,450			0.97–162.00		5.12
Exercisable at December 31, 2007						4,689,650		$	0.62–162.00	$	5.60

Stock Based Compensation

        On January 1, 2006, Caliper adopted SFAS 123R, which requires all share-based payments to be recognized in the income statement as an operating expense, based on their fair values. Caliper's share-based payment arrangements within the scope of SFAS 123R include options, restricted stock and other forms of stock bonuses, including restricted stock units, awarded under its option plans, and its Employee Stock Purchase Plan (ESPP) which enables participating employees to purchase Caliper's stock at a discount from fair market value. Caliper applied the modified prospective method in adopting SFAS 123R. For stock option awards and ESPP purchases, Caliper estimates the fair value of share-based payments using the Black-Scholes-Merton formula and, for all share-based payments made after the adoption of SFAS 123R, recognizes the resulting compensation expense using a straight-line recognition method over the applicable service period of each award. The fair value of restricted stock awards (including restricted stock units) is determined based upon the fair market value of Caliper's stock on the date of grant. For restricted stock and restricted stock unit awards granted prior to January 1, 2006, Caliper continues to recognize the resulting compensation expense under the accelerated expense attribution method. Upon the adoption of SFAS 123R, deferred stock-based compensation of $3.0 million was reclassified to additional paid-in capital within stockholders' equity. The majority of the incentive and non-statutory stock option grants and restricted stock awards carry a 4-year vesting term, which is generally the requisite service period. There are typically no acceleration provisions related to the stock option grants or restricted stock awards. The exercise price of stock option grants is equal to the fair market value of Caliper's stock on the date of grant. For certain restricted stock awards that cliff vest, Caliper recognizes the resulting compensation expense using a straight-line recognition method over the applicable service period of each award. Shares issued pursuant to option exercises or restricted stock unit conversion are generally made from previously authorized, but un-issued shares of common stock, or if available, outstanding treasury shares.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

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

        Caliper accounts for options issued to non-employees in accordance with the provisions of SFAS 123R and EITF No. 96-18, Accounting for Equity Instruments that are issued to other than Employees for Acquiring, or in Conjunction with Selling Goods or Services. For the years ended December 31, 2008, 2007 and 2006, compensation expense related to stock-based compensation issued to non-employees was not material.

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

	Years Ended December 31,
	2008		2007		2006
Cost of product revenue	$	306	$	422	$	506
Cost of service revenue		75		121		151
Research and development		398		835		975
Selling, general and administrative		2,801		3,783		3,938
Total	$	3,580	$	5,161	$	5,570

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

	2008		2007		2006
Expected volatility (%)		40–68		39–45		40–46
Risk-free interest rate (%)		1.59–3.53		3.90–5.00		4.63–4.88
Expected term (years)		3.39–4.24		3.20–4.20		4.16–4.30
Expected dividend yield (%)		—		—		—

F-34

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Stockholders' Equity (Continued)

        A summary of stock option and restricted stock unit activity under the Plans as of December 31, 2008, and changes during the year then ended as follows:

Stock Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
								(in thousands)
Outstanding at December 31, 2007		7,159,848		$	5.69		6.50	$	4,248
Granted		1,619,258			3.59		—		—
Exercised		(342,238	)		1.26		—		694
Canceled		(770,407	)		5.61		—		—
Outstanding at December 31, 2008		7,666,461		$	5.45		6.35	$	567
Exercisable at December 31, 2008		5,076,450		$	5.90		5.12	$	567
Vested and expected to vest at December 31, 2008		7,543,208		$	5.46		6.31	$	548

Restricted Stock Units	Shares
Outstanding and non-vested at December 31, 2007		646,641
Granted		325,298
Vested		(264,091	)
Unvested repurchases		(106,128	)
Outstanding and non-vested at December 31, 2008		601,720

        Restricted stock units do not carry an exercise price and typically vest over a four-year period, although the vesting period of certain awards may vary. As of December 31, 2008, the weighted average remaining vesting term is 2.07 years and the aggregate intrinsic value of outstanding and non-vested restricted stock is approximately $0.6 million.

        During the twelve months ended December 31, 2008, Caliper granted 1,619,258 options at a weighted average grant date fair value, using the Black-Scholes-Merton option pricing model, of $1.35 per share, and 325,298 restricted stock units at a weighted average grant date fair value of $3.94 per share. The total fair value of restricted stock that vested during the year ended December 31, 2008 was approximately $1.5 million.

        As of December 31, 2008, there was $5.5 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average remaining service period of approximately 2.33 years.

F-35

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Income Taxes

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

	Years Ended December 31,
	2008			2007		2006
Federal	$	(76	)	$	—	$	(337	)
State		50			125		2
Foreign		633			159		231
Total	$	607		$	284	$	(104	)

        Total foreign pre-tax income (loss) was $1.8 million, $1.0 million and $(0.2) million in 2008, 2007 and 2006, respectively. As a result of its historic operating loss position, Caliper has recorded no provision (benefit) for U.S. federal taxes for any period except for the tax benefit of $76,000 recorded in 2008 related to election under the Housing & Recovery Act of 2008 to forego bonus depreciation and increase the business credit limitation and in 2006 a benefit was recorded related to the write off of the NovaScreen trade name. In addition, no foreign tax benefit was recognized in jurisdictions in which foreign losses were incurred during 2008, 2007 and 2006.

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

		Years Ended December 31,
		2008			2007			2006
Income tax provision (benefit):
	At federal statutory rate	$	(23,013	)	$	(8,091	)	$	(9,837	)
	State		50			125			2
	Foreign		633			159			231
Permanent differences:
	Stock compensation		121			1,067			1,401
	In-process research and development		—			—			985
	Impairment of goodwill		19,504			—			—
	Other		(713	)		101			(244	)
Valuation allowance			4,025			6,923			7,358
	Total	$	607		$	284		$	(104	)

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

F-36

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Income Taxes (Continued)

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

		Years Ended December 31,
		2008			2007			2006
Net operating loss carryforwards		$	106,665		$	105,863		$	101,248
Research credit carryforwards			12,715			14,530			15,052
Capitalized research and development			361			482			616
Restructuring accrual			1,742			1,034			2,582
Intangible assets			(12,374	)		(15,722	)		(19,673	)
Non-amortized intangibles			(1,128	)		(1,130	)		(1,130	)
Other, net			9,161			8,058			6,700
Net deferred tax assets			112,148			113,115			105,395
Valuation allowance			(118,270	)		(114,245	)		(106,525	)
	Total	$	(1,128	)	$	(1,130	)	$	(1,130	)

        As of December 31, 2008, Caliper had federal and state net operating loss carryforwards of approximately $299.1 million and $102.5 million, respectively. Caliper also had federal and state research and development tax credit carryforwards of approximately $7.9 million and $4.9 million, respectively. The federal net operating loss and credit carryforwards will expire at various dates through 2028 beginning in the year 2009, if not utilized. The current remaining state net operating losses have varying expiration dates through 2028.

        Because of Caliper's lack of earnings history and the uncertainty of realizing these net operating losses, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $4.0 million, $7.7 million and $42.4 million during the years ended December 31, 2008, 2007 and 2006, respectively. The 2006 change in valuation allowance includes approximately $37.0 million of valuation allowance recorded in connection with the acquisition of Xenogen. Pursuant to FAS 141(R), any future reversals of such allowance, when they occur, will be recorded as an adjustment to the income statement.

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

        We adopted the provisions of FIN 48, Accounting for Uncertainty in Income Taxes as of January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements under SFAS No. 109 and prescribes a comprehensive model for the recognition, measurement, and financial statement disclosure of uncertain tax positions. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes pursuant to FIN 48. As a result of adopting the provisions of FIN 48, we recognized no change in the amount of unrecognized tax benefits that are recorded in our financial

F-37

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Income Taxes (Continued)

statements. In connection with the adoption of FIN 48, we have classified uncertain tax positions as short-term liabilities within accrued expenses.

        The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2007 to December 31, 2008 (in thousands):

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

        If recognized the full amount of the unrecognized tax benefit of $0.4 million would impact the annual effective tax rate. In the ordinary course of Caliper's business, its income tax filings are regularly under audit by tax authorities. While Caliper believes it has appropriately provided for all uncertain tax positions, amounts asserted by taxing authorities could be greater or less than our accrued position. Accordingly, additional provisions on income tax matters, or reductions of previously accrued provisions, could be recorded in the future as we revise our estimates due to changing facts and circumstances or the underlying matters are settled or otherwise resolved. Federal and certain state taxes for the years 2004 through 2006 are subject to examination, as well as foreign jurisdiction tax returns covering these same periods. Caliper does not anticipate that the total amount of unrecognized tax benefit related to any particular tax position will change significantly within the next twelve months.

        Caliper recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties accrued as of December 31, 2008 were not material.

14. 401(k) Plans

        Caliper has a 401(k) plan qualified under section 401(k) of the Internal Revenue code that is available to all eligible employees as defined in the plan. Caliper has not historically matched employee contributions, and has no immediate plans to do so.

F-38

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Supplemental Disclosure of Cash and Non-Cash Activities

        The following is a summary of supplemental disclosure of cash flow information related to acquisitions (in thousands):

	Year Ended December 31, 2006
Stock issued for acquisition of Xenogen	$	52,149
Warrants issued for acquisition of Xenogen		5,476
Value of Xenogen warrants assumed in acquisition		1,655
Total non-cash consideration		59,280
Non-cash assets and liabilities		52,080
Xenogen cash acquired, net of $2.8 million in acquisition costs	$	7,200

        The following table is a summary of supplemental disclosure of significant non-cash investing and financing activities (in thousands):

	Year Ended December 31,
	2008		2007			2006
Purchase price adjustment for acquisitions	$	—	$	(61	)	$	(188	)
Non-cash purchase of property and equipment	$	—	$	—		$	400

16. 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

F-39

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Legal Proceedings (Continued)

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 subsequently briefed plaintiffs' motion seeking certification of a new class of plaintiffs; that motion was withdrawn without prejudice on October 10, 2008. It is Caliper's understanding that the parties to this litigation are negotiating a global settlement of the claims at issue in this litigation. The final resolution of this litigation is not expected to have a material impact on Caliper.

        Previously, Caliper was party to a lawsuit brought by AntiCancer, Inc. against Xenogen Corporation (now a wholly owned subsidiary of Caliper) in 2005, which initially alleged that Xenogen infringed five patents of AntiCancer. Xenogen counterclaimed against AntiCancer in 2005, alleging that AntiCancer infringed four of Xenogen's patents. The case was scheduled to proceed to a Markman hearing in May 2008. However, on February 25, 2008, Caliper and AntiCancer entered into a settlement agreement pursuant to which the parties agreed to dismiss with prejudice all claims and counterclaims brought against each other in connection with this litigation. In connection with the settlement agreement, Caliper and AntiCancer also entered into a cross-licensing agreement. Under the cross-license agreement Caliper acquired the right to sublicense AntiCancer's fluorescent protein optical imaging patents to third-parties, alongside Caliper's own portfolio of in vivo fluorescent and bioluminescent optical imaging patents, and AntiCancer acquired the right to sublicense Caliper's optical imaging patents, in the field of fluorescent protein imaging, to a specified annual number of third parties throughout the life of the cross-license agreement, alongside AntiCancer's own fluorescent protein optical imaging patents. In addition, each company received a royalty free license from the other for internal and contract research operations. Under the cross-license agreement, Caliper and AntiCancer will share in any revenues generated by the licensing of their proprietary imaging technologies in the field of fluorescent protein imaging. No other payments will be made for either the settlement or cross-licensing agreements.

        Caliper had been engaged in litigation in New York State Supreme Court with Young & Partners LLC (Young), an investment banking firm that was engaged by Caliper between August 2004 and September 2005, regarding whether Caliper owed a fee to Young for Caliper's acquisition of Xenogen Corporation, which closed in August 2006. The lawsuit was filed by Young in October 2006. Young sought payment of the fee that it believed it was owed, approximately $1.1 million, plus accrued interest, and payment of attorneys' fees. A two-day bench trial regarding this dispute was held on February 7 and 8, 2008. On April 2, 2008, Caliper settled this litigation with Young. 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.

        On January 23, 2009, Caliper filed and served a patent infringement suit against Shimadzu Corporation and its U.S. subsidiary, Shimadzu Scientific Instruments, Inc., in the United States District Court for the Eastern District of Texas. In this suit, Caliper alleges that Shimadzu's MCE-202 MultiNA instrument system, which performs electrophoretic separations analysis of nucleic acids, infringes 11 different U.S. patents owned by Caliper. Shimadzu is not required to file an answer to this complaint until March 17, 2009.

        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

F-40

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Legal Proceedings (Continued)

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

17. Geographic Data

        SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued to stockholders. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions of how to allocate resources and assess performance. Caliper's chief decision maker, as defined under SFAS No. 131, is the chief executive officer. Caliper views its operations and manages its business as one operating segment.

F-41

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. Geographic Data (Continued)

        The table below presents Caliper's activities by geographical location (in thousands). Caliper attributes revenue to geographic locations based upon customer service and business development activities.

		2008			2007			2006
Revenue:
	United States	$	77,335		$	88,262		$	67,614
	Europe		37,689			34,117			28,244
	Asia		16,055			16,104			9,516
	Other		2,975			2,224			2,497
		$	134,054		$	140,707		$	107,871
Net loss:
	United States	$	(71,415	)	$	(31,806	)	$	(33,484	)
	Europe		1,007			1,330			2,263
	Asia		1,832			6,169			1,971
	Other		284			227			316
		$	(68,292	)	$	(24,080	)	$	(28,934	)
Property and equipment, net:
	United States	$	10,576		$	11,249		$	12,973
	Europe		148			224			204
	Asia		11			4			5
		$	10,735		$	11,477		$	13,182
Net Assets:
	United States	$	70,621		$	138,968		$	155,486
	Europe		4,624			3,898			2,985
	Asia		824			(2,222	)		(1,522	)
	Other		669			542			460
		$	76,738		$	141,186		$	157,409

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

18. Quarterly Financial Data (Unaudited)

        The following table sets forth a summary of our unaudited quarterly operating results for each of the eight quarters up through the year ended December 31, 2008. This data has been derived from our unaudited consolidated interim financial statements which, in our opinion, have been prepared in substantially the same basis as the audited consolidated financial statements contained elsewhere in this Annual Report on Form 10-K and include all normal recurring adjustments necessary for a fair presentation of the financial information for the periods presented. These unaudited quarterly results should be read in conjunction with our consolidated financial statements and notes thereto included in

F-42

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. Quarterly Financial Data (Unaudited) (Continued)

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

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Year ended December 31, 2008
Total revenue	$	29,287		$	34,031		$	34,041		$	36,695
Gross profit(1)		11,800			14,070			14,880			14,910
Operating loss		(10,160	)		(6,191	)		(4,757	)		(48,423	)
Net loss		(9,936	)		(6,682	)		(5,396	)		(46,278	)
Basic and diluted loss per share	$	(0.21	)	$	(0.14	)	$	(0.11	)	$	(0.96	)
Year ended December 31, 2007
Total revenue	$	28,440		$	35,290		$	36,721		$	40,256
Gross profit(1)		8,571			11,972			11,887			15,971
Operating loss		(9,566	)		(5,996	)		(2,648	)		(5,618	)
Net loss		(9,597	)		(6,320	)		(2,428	)		(5,735	)
Basic and diluted loss per share	$	(0.20	)	$	(0.13	)	$	(0.05	)	$	(0.13	)

(1)

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

        The quarterly financial data presented above includes a reclassification of SFAS 123R related compensation charges from stock-based compensation, as previously reported, to the individual expense line items within the accompanying statement of operations.

F-43

Caliper Life Sciences, Inc.

Schedule II—VALUATION AND QUALIFYING ACCOUNTS

	Balance at Beginning Period		Additions Charged to Costs and Expenses		Deductions		Balance at End of Period
	(In thousands)
Year ended December 31, 2008:
Allowance for doubtful accounts	$	1,320	$	139	$	719	$	740
Valuation allowance for deferred tax assets		114,245		4,025		—		118,270
	$	115,565	$	4,164	$	719	$	119,010
Year ended December 31, 2007:
Allowance for doubtful accounts	$	582	$	793	$	55	$	1,320
Valuation allowance for deferred tax assets		106,525		7,720		—		114,245
	$	107,107	$	8,513	$	55	$	115,565
Year ended December 31, 2006:
Allowance for doubtful accounts	$	482	$	148	$	48	$	582
Valuation allowance for deferred tax assets		64,148		42,377		—		106,525
	$	64,630	$	42,525	$	48	$	107,107

F-44

EXHIBIT INDEX

Exhibits:

Exhibit Number		Description of Document
	2.1(14)	Stock Purchase Agreement, by and among Caliper, Berwind Corporation and The Berwind Company LLC, dated June 9, 2003.
	2.2(14)	Amendment No. 1 to the Stock Purchase Agreement, by and among Caliper, Berwind Corporation and The Berwind Company LLC, dated July 10, 2003.
	2.3(17)	Amendment No. 2 to the Stock Purchase Agreement, by and among Caliper, Berwind Corporation and The Berwind Company LLC, dated April 1, 2004.
	2.4(18)	Agreement and Plan of Merger, among Caliper Life Sciences, Inc., Caliper Services, Inc. and NovaScreen Biosciences Corporation, dated as of September 7, 2005.
	2.5(22)	Agreement and Plan of Merger, among Caliper Life Sciences, Inc., Caliper Holdings, Inc. and Xenogen Corporation, dated as of February 10, 2006.
	2.6(21)	Asset Sale and Purchase Agreement, dated as of October 29, 2008, by and between Sotax Corporation and Caliper Life Sciences, Inc.
	2.7(21)	Asset Purchase Agreement, dated as of November 10, 2008, by and between Dionex Corporation and Caliper Life Sciences, Inc.
	3.1(17)	Amended and Restated Certificate of Incorporation of Caliper.
	3.2(7)	Certificate of Designation of Series A Junior Participating Preferred Stock.
	3.3(25)	Amended and Restated Bylaws of Caliper.
	4.1	Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
	4.11(26)	Registration Rights Agreement by and between Caliper and The Berwind Company LLC, dated as of December 18, 2007.
	4.2(19)	Specimen Stock Certificate.
	4.3(8)	Rights Agreement, dated as of December 18, 2001, between Caliper and Wells Fargo Bank Minnesota, N.A., as Rights Agent.
	10.1(1)	Lease Agreement, dated December 1, 1998, between Caliper and 605 East Fairchild Associates, L.P.
	10.2(1)(2)	1996 Equity Incentive Plan.
	10.3(1)(2)	1999 Equity Incentive Plan.
	10.4(1)(2)	1999 Employee Stock Purchase Plan.
	10.5(2)(23)	1999 Non-Employee Directors' Stock Option Plan.
	10.6(2)(19)	Form of Grant Agreement for 1999 Equity Incentive Plan—Option Awards.
	10.7(2)(19)	Form of Grant Agreement for 1999 Equity Incentive Plan—Restricted Stock Unit Awards.
	10.8(2)(19)	Form of Grant Agreement for 1999 Non-Employee Directors' Stock Option Plan.
	10.9(1)(2)	Form of Indemnification Agreement entered into between Caliper and its directors and executive officers.
	10.10(1)(3)	Collaboration Agreement, dated May 2, 1998, between Caliper and Hewlett-Packard Company (now Agilent Technologies, Inc.).

Exhibit Number		Description of Document
	10.11(2)(19)	Form of Stock Option Grant Agreement for Acquisition Equity Incentive Plan.
	10.12(2)(19)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (pro rata vesting).
	10.13(2)(19)	Form of Stock Award Agreement for Acquisition Equity Incentive Plan (5 year cliff vesting).
	10.14	Lease Agreement, dated as of April 25, 2005, between Caliper and BCIA New England Holdings LLC.
	10.17(2)(19)	Non-Employee Directors' Cash Compensation Plan.
	10.18(2)(10)	Caliper Performance Bonus Plan.
	10.20(2)(10)	Summary Cash Compensation Sheet.
	10.23(1)(2)	The Corporate Plan for Retirement Select Plan Adoption Agreement and related Basic Plan Document.
	10.27(5)	Lease Agreement, dated June 23, 2000 and effective July 5, 2000, between Caliper and Martin CBP Associates, L.P.
	10.29(2)	Key Employee Change of Control and Severance Benefit Plan.
	10.30(4)(7)	Cross-License Agreement, dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.32(3)(6)	Settlement Agreement and Mutual General Release dated March 12, 2001 between Aclara Biosciences, Inc. and Caliper.
	10.39(2)(8)	2001 Non-Statutory Stock Option Plan.
	10.46(2)(19)	Form of Grant Agreement for 2001 Non-Statutory Stock Option Plan.
	10.48(2)(9)	Key Employee Agreement, dated July 1, 2002, between Caliper and Dr. Daniel Kisner.
	10.52(3)(15)	Sole Commercial Patent License Agreement, effective September 1, 1995, between UT-Battelle, LLC, the successor to Lockheed Martin Energy Research Corporation, and Caliper, as amended on November 1, 2002.
	10.55(3)(11)	Collaboration Agreement, dated June 4, 2003, between Caliper and Bio-Rad Laboratories, Inc.
	10.56(2)(12)	Key Employee Agreement, dated July 14, 2003, between Caliper and E. Kevin Hrusovsky.
	10.62(2)(13)	Acquisition Equity Incentive Plan.
	10.63(2)(16)	Key Employee Agreement Amendment, dated December 24, 2003, between Caliper and Dr. Daniel L. Kisner.
	10.64(2)(16)	Consulting Agreement, dated January 1, 2004, between Caliper and Dr. David V. Milligan.
	10.66(3)(16)	Collaboration and Supply Agreement, dated January 9, 2004, among Caliper, Zymark Corporation and Affymetrix, Inc.
	10.67(2)	Offer Letter dated September 7, 2005 between Caliper Life Sciences, Inc. and David M. Manyak, Ph.D.
	10.68(27)	Loan and Security Agreement, dated as of August 9, 2006, by and among Caliper, Silicon Valley Bank and NovaScreen Biosciences Corporation.

Exhibit Number		Description of Document
	10.69(28)	Joinder Agreement, dated as of September 28, 2006, by and among Caliper, Silicon Valley Bank, Xenogen Corporation, Xenogen Biosciences Corporation, and NovaScreen Biosciences Corporation.
	10.70(29)	First Loan Modification Agreement dated as of February 26, 2007, by and among Caliper, Silicon Valley Bank, NovaScreen Biosciences Corporation, Xenogen Corporation, and Xenogen Biosciences Corporation.
	10.71(20)(3)	Agreement, dated as of May 5, 2000, between the Board of Trustees of the Leland Stanford Junior University and Xenogen Corporation.
	10.72(2)	Consulting Agreement, dated as of October 17, 2006, between Caliper and Pamela Contag.
	10.73(30)	Amended and Restated Loan and Security Agreement, dated as of February 15, 2008, by and among Caliper, Silicon Valley Bank, Xenogen Corporation, Xenogen Biosciences Corporation and NovaScreen Biosciences Corporation.
	10.74(31)	Amendment to Lease Agreement dated as of March 18, 2008, by and between 605 Fairchild Associates, L.P., as landlord, and Caliper Life Sciences, Inc., as tenant.
	10.75(32)	Consulting Agreement, dated March 10, 2008, between Caliper and Dr. Daniel Kisner.
	10.76(33)	Separation Agreement dated April 4, 2008, between Caliper and Mr. Thomas Higgins.
	10.77(34)	Consulting Agreement, dated April 5, 2008, between Caliper and Mr. Thomas Higgins.
	10.78(35)	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.
	21.1(24)	Subsidiaries of the Registrant.
	23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
	24.1	Power of Attorney (reference is made to the signature page of this report).
	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a)
	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)

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

(2)

Management contract or compensatory plan or arrangement.

(3)

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

(4)

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

(5)

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

(6)

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

(7)

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

(8)

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

(9)

Previously filed as the like-numbered Exhibit to Form 10-Q for the quarterly period ended September 30, 2002 and incorporated by reference herein.

(10)

Previously filed as the like-numbered Exhibit to Current Report on Form 8-K filed March 16, 2005 and incorporated by reference herein.

(11)

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

(12)

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

(13)

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

(14)

Previously filed as the like-numbered Exhibit to Form 8-K filed July 25, 2003 and incorporated by reference herein.

(15)

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

(16)

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

(17)

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

(18)

Previously filed as Exhibit 2.1 to our Registration Statement on Form S-3, File No. 333-129192, filed October 21, 2005 and incorporated by reference herein.

(19)

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

(20)

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

(21)

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

(22)

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

(23)

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

(24)

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

(25)

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

(26)

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

(27)

Previously filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2006 and incorporated by reference herein.

(28)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended September 30, 2006 and incorporated by reference herein.

(29)

Previously filed as Exhibit 10.1 to Form 8-K filed March 2, 2007 and incorporated by reference herein.

(30)

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

(31)

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

(32)

Previously filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(33)

Previously filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(34)

Previously filed as Exhibit 10.4 to Form 10-Q for the quarterly period ended March 31, 2008 and incorporated by reference herein.

(35)

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

EX-2.6

Exhibit 2.6

Execution Version

Asset Sale and Purchase Agreement

between

Caliper Life Sciences, Inc.

and

Sotax Corporation

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

This Asset Sale and Purchase Agreement (this “Agreement”), is made and entered into as of October 29, 2008, by and between Caliper Life Sciences, Inc., a Delaware corporation, 68 Elm Street, Hopkinton, MA 01748, USA (“Caliper” or the “Seller”) and Sotax Corporation, a Virginia corporation, 411 Caredean Drive, Horsham, PA 19044, USA (“Sotax” or the “Purchaser”) with regard to an acquisition of Caliper’s Pharmaceutical Development and Quality Business.  Caliper and Sotax are referred to each as a “Party” and together as the “Parties.”

I.	Objective
II.	Defined Terms
III.	Purchase and Sale
IV.	Closing; Termination
V.	Transition
VI.	Representations and Warranties of the Seller
VII.	Representations of the Purchaser
VIII.	Restrictive Covenants
IX.	Indemnification
X.	General Provisions
XI.	Governing Law; Jurisdiction

Exhibits:

Exhibit A -	Form of Assignment and Assumption Agreement
Exhibit B -	Form of Bill of Sale
Exhibit C -	Form of Patent Assignment
Exhibit D -	Form of Trademark Assignment
Exhibit E -	Form of Transition Services Agreement
Exhibit F -	Form of Escrow Agreement

I.Objective

1.The Seller currently conducts the Business (as defined herein) and intends to divest the Business in order to focus on its core drug discovery and development business.

2.The Purchaser desires to purchase from the Seller, and the Seller desires to sell, transfer and assign to the Purchaser, substantially all of the assets and rights associated with the Business on the terms and conditions of this Agreement.

3.Except for the Assumed Liabilities, the Purchaser is assuming none of Caliper’s Liabilities.

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

4.The “Business” comprises the development, manufacture, marketing, sale and distribution of products and the performance of services for drug content uniformity and dissolution rate testing for dose drug forms and such other products and services sold or performed using or involving the Products being sold to the Purchaser hereunder.

5.In consideration of the mutual promises, covenants, representations and warranties made herein and of the mutual benefits to be derived herefrom, the Parties hereto, intending to be legally bound, hereby agree as follows.

II.Defined Terms

As used in this Agreement, the following terms shall have the following meaning:

“Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

“Agreement” or this “Agreement” means this Asset Sale and Purchase Agreement, including the Exhibits and Schedules hereto.

“Allocation Schedule” has the meaning as stated in Section 14.

“Assigned Contracts” means those Contracts set forth on Schedule IIA to this Agreement.

“Assignment and Assumption Agreement” means the Assignment and Assumption Agreement in the form attached as Exhibit A to this Agreement.

“Assumed Liabilities” has the meaning as stated in Section 9.1.

“Benefit Plans” means any employee pension benefit plans (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), welfare benefit plans (including post retirement medical and life insurance) (as defined in Section 3(1) of ERISA), bonus, stock purchase, stock ownership, stock option (or other equity-based), deferred compensation, incentive, severance, change in control, termination or other compensation plan, policy, agreement or arrangement, and other material employee fringe benefit plans, policies or arrangements whether or not subject to ERISA or oral presently or within the previous six (6) years sponsored, maintained, contributed to, or required to be contributed to, by the Seller or its ERISA Affiliates.

“Bill of Sale” means the Bill of Sale and Assignment in the form attached as Exhibit B to this Agreement.

“Business” has the meaning as stated in Section 4.

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

3

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the State of New York.

“Business Personnel” has the meaning as stated in Section 7.14.

“Caliper” is the Person identified in the introduction of this Agreement.

“Caliper Pay Off Amount” has the meaning as stated in Section 19.

“Caliper Pay Off Amount Recipient” and “Caliper Pay Off Amount Recipients” have the meanings as stated in Section 19.

“Closing” has the meaning as stated in Section 15.

“Closing Date” has the meaning as stated in Section 15.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Competing Business” means a business (i) of developing, manufacturing, marketing, selling and/or distributing products or performing services for drug content uniformity and/or dissolution rate testing for dose drug forms or (ii) solely or predominately related to any of the Products acquired by the Purchaser hereunder.

“Confidentiality Agreement” means the Letter of Intent dated as of October 1, 2008 between the Seller and Sotax.

“Contract” means any note, bond, mortgage, indenture, guarantee, license, lease, agreement, contract, instruments, subcontract or other obligation, including all amendments thereto, whether written or oral.

“control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by Contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

“Customer Documentation” has the meaning as stated in Section 36.

“Damages” means all Liabilities, obligations, claims, demands, damages (including diminution in value), penalties, settlements, causes of action, costs and expenses, including, without limitation, all reasonable attorneys’, experts’ and accountants’ fees, expenses and disbursements and court costs including, without limitation, those incurred in connection with the Purchaser Indemnified Person’s enforcement of this Agreement and the indemnification provisions of Article IX.

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

4

“Device” has the meaning as stated in the definition of “Products” in this Article II.

“Device Registration” has the meaning as stated in Section 7.10.

“Disclosure Schedule” means the Disclosure Schedule, dated as of the date hereof, and forming a part of this Agreement, delivered by the Seller to the Purchaser.

“Distribution Agreements” has the meaning as stated in Section 29.

“Encumbrance” means any mortgage, pledge, deed of trust, hypothecation, right of others, claim, security interest, encumbrance, burden, title defect, title retention agreement, lease, sublease, license, occupancy agreement, easement, covenant, condition, encroachment, voting trust agreement, interest, option, right of first offer, negotiation or refusal, right of purchase, proxy, lien (including, without limitation, any environmental or Tax lien), charge or other restrictions or limitations of any nature whatsoever, including but not limited to such Encumbrances as may arise under any Contract.

“Environmental Law” means any supranational, national, federal, state, canton, provincial, municipal or local statute, law, ordinance, regulation, rule, code, order or common law relating to pollution or protection of the environment, including, without limitation, to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Liability” means any claim, demand, order, suit, obligation, Liability, cost (including, without limitation, the cost of any investigation, testing, compliance or remedial action), loss or expense (including attorney’s and consultant’s fees and expenses) in each case, whether arising or incurred before, on or after the Closing Date, arising out of, relating to or resulting from any environmental, health, or safety matter or condition, in each case in existence prior to or as of the Closing Date, including natural resources, and related in any way to the Business or to this Agreement or its subject matter.

“Environmental Permit” means any governmental permit, approval, identification number, license or other authorization required under or issued pursuant to any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means (i) any corporation included with the Seller in a controlled group of corporations within the meaning of Section 414(b) of the Code; (ii) any trade or business (whether or not incorporated) which is under common control with the Seller within the meaning of Section 414(c) of the Code; (iii) any member of an affiliated service group of which the Seller is a member within the meaning of Section 414(m) of the Code; or (iv) any other Person or entity treated as an affiliate of the Seller under Section 414(o) of the Code.

“Escrow Agent” means U.S. Bank National Association.

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

5

“Escrow Agreement” has the meaning as stated in Section 13.2.

“Escrow Amount” has the meaning as stated in Section 13.2.

“Excluded Assets” has the meaning as stated in Section 8.

“Expiration Date” has the meaning as stated in Section 108.

“Field” means any product or service offering presently offered by Caliper similar to Caliper’s “Sciclone” and “Zephyr”; solid phase extraction instruments, such as Caliper’s “AutoTrace” and “RapidTrace” instruments; instruments for sample concentration by means of evaporation, such as Caliper’s “TurboVap” instrument; microfluidic based instruments currently marketed by Caliper, and any optical imaging instruments or reagents currently marketed by Caliper, but in no event shall the term “Field” mean (x) any product or service offering currently being sold by Sotax or any of its Affiliates on the date hereof, or (y) any of the Products acquired hereunder or (z) any product or service that Sotax or any of its Affiliates subsequently offer in relation to drug content uniformity or dissolution rate testing.

“Final Purchase Price” has the meaning as stated in Section 12.

“Final Termination Date” has the meaning as stated in Section 20.1.5.

“Financial Statements” has the meaning as stated in Section 61.

“Funded Indebtedness” means, in the case of Caliper, the aggregate amount of the Indebtedness of Caliper related to the Business and outstanding as of the Closing.

“GAAP” means generally accepted accounting principles in the United States applied on a consistent basis.

“Governmental Authority” means any supranational, national, federal, state, canton, provincial, municipal or local body or any government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Hazardous Material” means (i) any petroleum, petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical, material or substance defined or regulated as toxic or hazardous or as a pollutant, contaminant or hazardous waste under any Environmental Law.

“Income Tax” means any and all Taxes based upon, or measured or calculated with respect to, net income (including, but not limited to, any capital gains or alternative minimum taxes).

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

6

“Indebtedness” as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money (including, without limitation, all obligations for principal, interest, premiums, penalties, fees, expenses and breakage costs), (ii) all obligations evidenced by a note, bond, debenture, debt security, draft or similar instrument, (iii) that portion of obligations with respect to capital leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (iv) notes payable and drafts accepted representing extensions of credit, (v) any obligation owed for all or any part of the deferred purchase price of property or services (excluding trade payables incurred in the ordinary course of business), (vi) all obligations for the reimbursement of letters of credit, bankers’ acceptances or similar credit transactions, (vii) all obligations under any currency or interest rate swap, hedge or similar protection device, (viii) all Liabilities of any type which are secured by any Encumbrance or any property or asset owned or held by such Person, (ix) all obligations of a type described in clauses (i) through (viii) of any other Person, the payment of which is guaranteed, directly or indirectly, by the first Person, and (x) all indebtedness and obligations of the types described in the foregoing clauses (i) through (viii) to the extent secured by any Encumbrance on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person.

“Independent Distributors” has the meaning as stated in Section 29.

“Indemnified Party” has the meaning as stated in Section 110.1.

“Indemnifying Party” has the meaning as stated in Section 110.1.

“Intellectual Property” means, in any and all jurisdictions, any and all of the following: (i) patents and patent applications; (ii) registered and unregistered trademarks and service marks, including the goodwill associated therewith; (iii) all original works of authorship fixed in any tangible medium of expression, whether registered as a copyright or not, including, without limitation, all software, documentation, brochures and blueprints in any way connected the design, development, manufacture, calibration, testing, use, operation, marketing, or sale of the Products; (iv) any kind of registered or unregistered design rights; (v) confidential and proprietary information, including trade secrets and know-how (including, without limitation, all know-how relating to all production steps of Products; (vi) domain names related to the name “Zymark” and (vii) inventions, methods, techniques and other intellectual property purported by the Seller to be owned by the Seller, and in each case other than clause (vi) above, used solely or predominately in the Business.

“Inventories” means all stock of raw materials, components and spare parts for Devices, works-in-progress, demo items and finished Devices, merchandise, packaging, finished goods, works-in-progress and raw materials related solely to the Business, and not intended by the Seller for use outside the Business, maintained, held or stored by or on behalf of the Seller on the Closing Date and any prepaid deposits for any of the same.

“IRS” means the United States Internal Revenue Service.

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

7

“Key Persons” means the Business Personnel listed in Schedule IIB.

“Law” means any supranational, national, federal, state, canton, provincial, municipal or local statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law.

“Liabilities” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including, without limitation, those arising under any Law (including, without limitation, any Environmental Law), Action or Governmental Order and those arising under any Contract, agreement, arrangement, commitment or undertaking.

“Licenses and Permits” has the meaning as stated in Section 7.9.

“Material Adverse Effect” means, (1) with respect to the Seller, a (i) change in, or effect on, or development related to the Business that, individually or in the aggregate with any other changes in, or effects on, the Business is materially adverse to the business, results of operations or financial condition of the Business, taken as a whole or (ii) material impairment of the ability of the Seller to perform its obligations under this Agreement; provided, however, that for the purposes of this clause (1), “Material Adverse Effect” shall not include any change in, or effect on, or development related to the Business directly or indirectly arising out of or attributable to (a) changes or effects that generally affect the industries in which the Business operates, (b) changes in general economic, regulatory or political conditions or (c) changes solely attributable to the announcement of the execution of this Agreement, the consummation of the transactions contemplated hereby, the identity of the Purchaser or actions solely caused by or under the responsibility of the Purchaser or, (2) with respect to the Purchaser, a material impairment of the ability of the Purchaser to perform its obligations under this Agreement; provided, however, that for the purposes of this clause (2), “Material Adverse Effect” shall not include any change in, or effect on, or development related to the Purchaser, directly or indirectly, arising out of or attributable to (a) changes in general economic, regulatory or political conditions or (b) changes solely attributable to the announcement of the execution of this Agreement, the consummation of the transactions contemplated hereby, the identity of the Seller or actions solely caused by or under the responsibility of the Seller.

“Material Contracts” has the meaning as stated in Section 75.

“Order” means the entry in any judicial or administrative proceeding brought under any Law by any Governmental Authority or any other party of any permanent or preliminary injunction or other order.

“Patent Assignment” means the Patent Assignment in the form attached as Exhibit C to this Agreement.

“Person” means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that

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

8

would be deemed to be a “person” under the Securities Exchange Act of 1934, as amended.

“Pre-Closing Taxes” means any Tax arising from the conduct of the Business attributable to any taxable period, or portion thereof, ending on or before the Closing Date.  In the case of a taxable period beginning before and ending after the Closing Date, Pre-Closing Taxes shall include:  (i) in the case of Taxes imposed on or calculated by reference to income, gain, receipts, sales, use, payment of wages, or other identifiable transactions or events, all such Taxes that would be payable if the taxable period ended on and included the Closing Date; and (ii) in the case of all other Taxes (including but not limited to real, personal, or intangible property taxes, franchise taxes, or capital stock or net worth taxes), all such Taxes for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on and including the Closing Date, and the denominator of which is the number of days in the entire taxable period.

“Procurement Contracts” has the meaning as stated in Section 39.

“Products” means any kind of instruments named as, or containing the name, “TPW”, “APW”, “MultiDose”, “MultiDose Plus”, “EasyFill”, “MultiFill”, “XP Robot”, “Prelude”, and “BenchMate” and in all existing technical versions (“Devices”) and the performance of validation and maintenance services for such Devices (“Services”), whereby Devices and Services being together the “Products”; provided that Caliper shall retain the right following the Closing to manufacture, market and sell instruments substantially functionally equivalent to the XP Robot; provided further that such instruments do not comprise a Competing Business.

“Promotional Material” has the meaning as stated in Section 7.12.

“Purchaser” is the Person identified in the introduction of this Agreement.

“Purchaser Indemnified Person(s)” has the meaning as stated in Section 109.1.

“Purchase Price” has the meaning as stated in Section 11.

“Purchase Price Bank Account” means one or more bank accounts to be designated by the Seller in a written notice to the Purchaser at least four (4) Business Days before the Closing.

“Receivables” means any and all accounts receivable, notes and other amounts receivable from third parties, including, without limitation, customers, arising from the conduct of the Business before the Closing Date, whether or not in the ordinary course, together with all unpaid financing charges accrued thereon.

“Registration Data” means all data, including, without limitation, chemistry, residue studies, environmental studies, toxicology studies, assessments, biological and safety data and summaries thereof, prepared by or for the Business, including (but not limited to) any such studies or data prepared for Governmental Authorities in support of an

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

9

application for a technical or formulated product registration, an amended registration, registration, or experimental use permit, or to maintain an existing technical or formulated product registration, if any.

“Representatives” mean all directors, officers, employees, agents, advisers or other persons acting on behalf of a Party.

“Related and Incidental Assets” means all deposits and prepayments for goods or services purchased or to be purchased by Caliper (other than deposits and prepayments relating to services provided in connection with the negotiation, preparation, execution and delivery of this Agreement); all customer lists and records; and all sales data; all restrictive covenants prohibiting competition, solicitation of employees, vendors, suppliers, customers, agents and independent contractors and similar covenants which run in favor of Caliper; all Encumbrances on the assets of others; suppliers’ lists and records; all books and records owned by Caliper; all catalogues, brochures, art work, photographs and advertising and marketing materials owned by Caliper; and all other property and rights of every kind or nature owned by Caliper, in each of the foregoing cases solely or predominately related to the Business, other than to the extent comprising a part of the Excluded Assets.

“Retained Liabilities” has the meaning as stated in Section 10.

“Sales Contracts” has the meaning as stated in Section 31.

“Seller” is the Person identified in the introduction of this Agreement.

“Seller Indemnitor” has the meaning as stated in Section 109.1.

“Seller Indemnitor’s Indemnification Cap” has the meaning as stated in Section 109.2.

“Services” has the meaning as stated in the definition of “Products” in this Article II.

“Service Contracts” has the meaning as stated in Section 33.

“Subsidiary” or “Subsidiaries” of any Person means any corporation, partnership, joint venture or other legal entity of which such person (either alone or though or together with any other subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity interests, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

“Tangible Personal Property” has the meaning stating in Section 7.4.

“Tax” or “Taxes” means any and all federal, state, local or foreign taxes, levies, duties, tariffs, imposts, and similar charges (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including, without limitation: taxes or similar charges

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

10

on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, worker’ compensation, unemployment compensation, or net worth; and taxes or similar charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes, and any liability pursuant to Treasury Regulations Section 1.1502-6 or similar state, local or foreign law.

“Termination Fee” has the meaning as stated in Section 20.2.3.

“Third Party Claim” has the meaning as stated in Section 110.1.

“Threshold Amount” has the meaning as stated in Section 109.3.

“Trademark Assignment” means the Trademark Assignment in the form attached as Exhibit D to this Agreement.

“Transferred Assets” has the meaning as stated in Section 7.

“Transferred Employees” has the meaning as stated in Section 43.

“Transferred Intellectual Property” has the meaning as stated in Section 7.2.

“Transition Services Agreement” means the Transition Services Agreement in the form attached as Exhibit E to this Agreement.

“Transaction Documents” means, collectively, this Agreement, the Assignment and Assumption Agreement, the Bill of Sale, the Patent Assignment, the Trademark Assignment and the Transition Services Agreement.

“Treasury Regulations” mean the Treasury Regulations promulgated under the Code.  All references to the Treasury Regulations shall be deemed to include references to any applicable successor law or regulations.

Glossary of Other Defined Terms.  Each of the terms set forth below and not defined in this Article II shall have the meaning ascribed thereto in the corresponding Section.

III.Purchase and Sale

  6.Agreement to Sell and Purchase the Transferred Assets.  The Seller shall, on the Closing Date, sell, assign, transfer, convey and deliver to the Purchaser, or cause its Subsidiaries as listed in Schedule 6 to this Agreement to sell, assign, transfer, convey and deliver to the Purchaser and the Purchaser shall purchase from the Seller and any such Subsidiaries, all of the Seller’s and its Subsidiaries’ right, title and interest in and to the following assets as of the Closing Date:

  7.Transferred Assets.  The “Transferred Assets” comprise the following tangible and intangible assets:

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

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7.1.the on-going business and operations of the Business, including, without limitation, all goodwill of the Seller relating thereto;

7.2.all Intellectual Property relating to the Business listed in Schedule 7.2 to this Agreement, excluding the trademark “Caliper” and any derivative thereof (“Transferred Intellectual Property”);

7.3.all of the interest of the Seller in the Transferred Intellectual Property; provided that the the Seller shall retain ownership of the ZyOs Operating System and EasyLab programming language, as described in Schedule 7.2 (collectively with the source code to the ZyOs Operating System and EasyLab programming language, the “Software”), and the Seller hereby grants to the Purchaser a worldwide, perpetual, irrevocable, transferable, nonexclusive, fully-paid, royalty-free license to the Software, with the right to sublicense, that allows the Purchaser to commercialize and exploit the Software to fullest extent as if the Purchaser owned the Software including, without limitation, the rights to: (i) access, support and maintain the Software; (ii) create derivative works of the Software including updates, upgrades, modifications, enhancements and customizations; (iii) compile object code, if any, from the Software and derivative works thereof; (iv) link, embed, combine and otherwise utilize the Software with other source and object code (whether owned or licensed by the Purchaser) to create applications (collectively “Applications”); (v) directly and indirectly license, sublicense and distribute the Software (and derivative works thereof) and Applications, either separately or with other products (including the Products); (vi) make, have made, use, lease, and/or sell any product (including the Products); and (vii) copy, install and use the Software as necessary or desirable to enjoy the foregoing rights;

7.4.all (i) machines, moulds, tools, equipment and the other tangible personal property that are solely or predominately used in the conduct of the Business, owned, leased, or otherwise held by the Seller contained in the work-stations as listed and described in the Fixed Asset Inventory attached as Schedule 7.4 to this Agreement, (ii) laptops, desktops, cell phones and blackberries used by the Business Personnel, (iii) officer furniture and cubicles located in the office space to be leased from the Seller by the Purchaser and (iv) all instruments, tools, furniture, beamers, projectors, booths and other items used soley or predominatley in the Business and needed to perform instrument demos, staff trainings, customer trainings and other events to promote the Products at the Hopkinton, MA facilities, trade shows or any other site (“Tangible Personal Property”);

7.5.all Inventories in existence as of the Closing Date consistent in nature with the identified Inventories of the Business as of September 30, 2008 attached as Schedule 7.5 to this Agreement; provided that such Inventories will be restocked to normal replenishment levels as of the Closing Date;

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

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7.6.all Sales Contracts that are Open Orders according to Section 31-32;

7.7.all existing Service Contracts as of the Closing Date according to Section 33-34;

7.8.all existing Procurement Agreements as of the Closing Date according to Section 39;

7.9.all licenses and permits with regard to the operation of the Business to the extent transferable (“Licenses and Permits”) as listed in Schedule 7.9 to this Agreement;

7.10.all registrations of the Devices (“Device Registration”) as listed in Schedule 7.10 to this Agreement; provided that the Seller shall provide to the Purchaser the Registration Data relating to the Devices on or prior to the Closing Date;

7.11.all operational business data comprising books of account, general, financial and personnel records with respect to the name, title, years of service, salary and workers’ compensation claims, invoices, shipping records, supplier lists, customer lists, marketing material, sales and production correspondence and other documents, records and files owned, solely or predominantly associated with or employed solely or predominantly in the conduct of the Business by the Seller or solely or predominantly used in, or solely or predominantly relating to, the Business at the Closing Date, as permitted by Law and unless any of such documents are subject to confidentiality agreements limiting their release and the Seller shall not have obtained consent to their release, with the Seller maintaining the right to retain copies of all such documents, except to the extent that any such documents which relate solely to the Business are determined in good faith by the Purchaser to contain competitively sensitive information;

7.12.all sales and promotional literature and other sales-related materials owned, previously used, currently used, associated with or employed by the Seller for use in the conduct of the Business (“Promotional Material”);

7.13.all rights of the Seller under the Material Contracts, except to the extent that a consent cannot be obtained as further set forth in Section 40;

7.14.to the extent transferable by the Seller or by any of the Seller’s Affiliates, all employment relationships attributed to personnel listed in Schedule 7.14 to this Agreement (“Business Personnel”) and the personnel files for all Business Personnel who become employees of the Purchaser;

7.15.the trademark “Zymark” and any derivatives thereof together with all of the Seller’s rights to the domain name “www.zymark.com”;

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

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7.16.all rights allocated to prepaid expenses relating to the Business (other than prepaid Income Taxes);

7.17.the Customer Documentation according to Sections 36 -38;

7.18.to the extent not covered by Section 7.1 through Section 7.17, all Related and Incidental Assets; and

7.19.all rights of Caliper under any claims, credits, causes of action or rights of set-off, including for past, present or future damages, against third parties including, without limitation, all warranties, guarantees, sureties, indemnities and similar rights in favor of Caliper arising out of or with respect to any of the assets described in Section 7.1 through Section 7.18 of this Agreement.

8.Excluded Assets.  Notwithstanding the terms of Section 7, the Seller shall not sell, convey, assign, transfer or deliver to the Purchaser, and the Purchaser shall not purchase, and the Transferred Assets shall not include, the Seller’s right, title and interest to the following assets (“Excluded Assets”):

8.1.all cash and cash equivalents, securities, and negotiable instruments of the Seller on hand, in bank accounts, in lock boxes, in financial institutions or elsewhere;

8.2.except as otherwise expressly included in the Transferred Assets, all assets, rights, technologies, compounds, products and intellectual and industrial property belonging to the Seller to the extent not solely or predominately used in the conduct of the Business;

8.3.all Tax returns, reports, records and workpapers, and all rights to Income Tax refunds, credits and similar benefits, relating to the Seller, its Subsidiaries, the Business or the Transferred Assets attributable to periods ending, or an event occurring, on or prior to the Closing Date;

8.4.all claims, causes of action, chooses in action, rights of recovery and rights of set-off of any kind, solely pertaining to or solely arising out of the conduct of the Business prior to the Closing Date, and inuring to the benefit of the Seller, unless expressly otherwise stated in this Agreement;

8.5.the trademark “Caliper” and any derivatives thereof;

8.6.all Receivables of the Seller; and

8.7.any exclusive right to develop, manufacture, market or sell any instrument that is functionally equivalent to the Seller’s current “XP Robot” product; provided that such instruments do not comprise a Competing Business.

9.Assumption of Liabilities.

9.1.At the Closing Date, the Purchaser will assume only:

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

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9.1.1.Caliper’s executory obligations arising after the Closing Date under each of the Assigned Contracts, except to the extent that any such executory obligations result from, arise out of, relate to, or are caused by, any one or more of the following: (i) any breach of any of the Assigned Contracts occurring on or before the Closing Date, (ii) any infringement or violation of any Law occurring on or before the Closing Date, or (iii) any event or condition occurring or existing on or before the Closing Date which through the passage of time or the giving of notice or both would constitute a breach or default by Caliper under any of the Assigned Contracts,

9.1.2.the trade payables and accrued expenses listed on Caliper’s balance sheet as of September 30, 2008 to the extent not paid before the Closing Date and those trade payables and accrued expenses incurred by Caliper since September 30, 2008 in the ordinary course of business consistent with past practice; and

9.1.3.accrued vacation and accrued variable compensation expense as set forth on Schedule 47.1 (such obligations and Liabilities so assumed pursuant to this Section 9.1, the “Assumed Liabilities”).

Notwithstanding anything to the contrary contained in this Section 9, Liabilities arising from the disclosures made in the Disclosure Schedules shall not attach to the Transferred Assets and shall not be an Assumed Liability and shall remain a Retained Liability unless specifically included within the definition of Assumed Liabilities.

  10.Retained Liabilities.  Except for the Assumed Liabilities, the Purchaser shall not, by virtue of its acquisition of the Transferred Assets or otherwise, assume or become responsible for any Liabilities of Caliper of any kind and nature whether arising before, on or after the Closing Date that are not expressly included within the definition of Assumed Liabilities (collectively, the “Retained Liabilities”).  The intent and objective of Caliper and the Purchaser is that, except for Assumed Liabilities, the Purchaser shall not, and does not hereby, assume, and no transferee or successor liability of any kind and nature shall attach to the Purchaser pertaining to, any of the Retained Liabilities, all of which such Retained Liabilities shall be the sole responsibility of Caliper.  Caliper shall pay, perform or otherwise discharge as the same shall become due and payable in accordance with their respective terms, all of the Retained Liabilities.

11.Purchase Price.  The aggregate purchase price and consideration to be paid by the Purchaser for the purchase and transition of the Transferred Assets and the execution of this Agreement by the Seller shall be $13,800,000 subject to adjustment as set forth in Section 12 and the assumption by the Purchaser of the Assumed Liabilities (the “Purchase Price”).

  12.Purchase Price Adjustments.  The Purchase Price shall be adjusted as follows:

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

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12.1.The Purchase Price shall be reduced by any decrease in the value of the Inventories as of the Closing Date below $2,400,000.

12.2.The Purchase Price shall be reduced by the aggregate amount invoiced (for payment to the Seller) in respect of any Service Contract entered into on or after October 1, 2008 and the Purchase Price shall be increased by the aggregate amount of the pro rata allocation of any services actually performed by the Seller with respect to Service Contracts between October 1, 2008 the Closing Date, as set forth on a certificate duly executed by the Chief Financial Officer of the Seller delivered to the Purchaser no earlier that 48 hours prior to the Closing Date.

12.3.Retention by the Seller of the $[***] break-up fee paid by the Purchaser to the Seller pursuant to Section 21 of the Confidentiality Agreement.

The Purchase Price, as adjusted in accordance with this Section 12, the “Final Purchase Price.”

13.Payment of Final Purchase Price.  The Final Purchase Price shall be paid by the Purchaser as follows:

13.1.On behalf of Caliper to each Caliper Pay-Off Amount Recipient, by wire transfer of immediately available funds to one or more accounts designated by each such Caliper Pay-Off Amount Recipient, an amount equal to that amount set forth in such recipient’s pay-off letter as being the Caliper Pay Off Amount owing to such recipient, to enable Caliper to repay Caliper’s Funded Indebtedness related to the Business;

13.2.To the Escrow Agent, an amount equal to $[***] (such amount, the “Escrow Amount”) to be deposited in an escrow account established pursuant to the terms and conditions of an escrow agreement (the “Escrow Agreement”) by and among the Escrow Agent, the Purchaser and the Seller, substiantially in the form attached as Exhibit F to this Agreement; and

13.3.To the Purchase Price Bank Account by wire transfer of immediately available funds, an amount equal to the difference between the Final Purchase Price, minus (i) the aggregate Caliper Pay Off Amounts, if any, and (ii) the Escrow Amount.

14.Purchase Price Allocation.  Within ten (10) days of the determination of the Final Purchase Price, the Purchaser shall deliver to the Seller a schedule allocating the Final Purchase Price and Assumed Liabilities among the Transferred Assets and non-competition covenant in accordance with Section 1060 of the Code (the “Allocation Schedule”).  The Seller shall have fifteen (15) days from its receipt of the Allocation Schedule to notify the Purchaser, in writing, of detailed explanations for any dispute.  If the Seller does not provide such notice to the Purchaser, the Seller shall be deemed to have accepted the Allocation Schedule as delivered by the Purchaser.  If the Seller does provide such notice, each of the

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

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Purchaser and the Seller shall negotiate in good faith to resolve the dispute.  If the Purchaser and the Seller are unable to resolve the dispute within 30 days following the Purchaser’s receipt of the Seller’s notice, the dispute shall be resolved by an independent accounting firm, who shall be jointly appointed by, and whose fees shall be jointly and equally paid by, the Purchaser and the Seller.  All parties shall prepare and file all applicable Tax returns, including Internal Revenue Service Form 8594, consistent with the finalized Allocation Schedule.  The Seller shall timely and properly prepare, execute, file and deliver all documents, forms and other information the Purchaser may reasonably request to prepare the Allocation Schedule.  Neither the Seller nor the Purchaser shall take any position (whether in audits, Tax returns or otherwise) that is inconsistent with the Allocation Schedule unless required to do so by applicable Law.

IV.Closing; Termination

15.Closing.  Subject to the conditions precedent set forth in Sections 16 and 17, the Closing of the transaction contemplated by this Agreement shall take place at a closing (the “Closing”) to be held at the offices of the Seller in Hopkinton, Massachusetts, USA at 10:00 A.M.  Eastern Standard Time on November 10th, 2008 or at such other place or at such other time or on such other date as the Seller and the Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date”).

16.Conditions Precedent to the Purchaser’s Obligations.  The Purchaser’s obligations to consummate the transactions contemplated hereby at the Closing are subject to the satisfaction of, or waiver in writing by the Purchaser of, prior to or at the Closing, each and every of the following conditions precedent:

16.1.Representations; Performance.

16.1.1.Each of the representations and warranties of Caliper contained in this Agreement shall (1) be true and correct as of the date hereof, and (2) shall be repeated and shall continue to be true and correct in all material respects on and as of the Closing Date with the same effect as though made on and as of the Closing Date.

16.1.2.The Seller shall have in all material respects duly performed and complied with all agreements and covenants required by this Agreement to be performed or complied with by the Seller prior to or on the Closing Date.

16.1.3.The Seller shall have delivered to the Purchaser a certificate, dated the Closing Date and duly signed by an officer of Caliper to the effect set forth above in Sections 16.1.1 and 16.1.2.

16.2.Delivery of Documents.  The Seller shall have executed and delivered to the Purchaser all documents, certificates, instruments and items required to be delivered by it at or prior to the Closing pursuant to this Agreement as set forth in Section 19 hereof.

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

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16.3.Consents.  All proceedings, if any, to have been taken and all consents including all Governmental Approvals, necessary or advisable in connection with the transactions contemplated hereby and the Purchaser’s conduct of the Business after the Closing shall have been taken or obtained.

16.4.No Material Adverse Effect.  Since September 30, 2008, no event, occurrence, fact, condition, change, development or effect shall exist or have occurred that, individually or in the aggregate, has had or resulted in or could reasonably be expected to have or result in a Material Adverse Effect with respect to the Business.

16.5.No Legal Proceeding Affecting Closing.  At the Closing Date, there shall not have been instituted and there shall not be pending or threatened Action, and no Governmental Order shall have been entered (i) imposing or seeking to impose limitations on the ability of the Purchaser to acquire or hold or to exercise full rights of ownership of any of the Transferred Assets; or (ii) restraining, enjoining or prohibiting or seeking to restrain, enjoin or prohibit the consummation of the transactions contemplated hereby.

17.Conditions Precedent to Caliper’s Obligations.  The obligations of Caliper to consummate the transactions contemplated hereby at the Closing are subject to the satisfaction of, or waiver in writing by Caliper, of, prior to or at the Closing, each and every of the following conditions precedent:

17.1.Representations; Performance.

17.1.1.Each of the representations and warranties of the Purchaser contained in this Agreement (1) shall be true and correct in all respects at and as of the date hereof and (2) shall be repeated and shall continue to be true and correct in all material respects on and as of the Closing Date with the same effect as through made on and as of the Closing Date.

17.1.2.The Purchaser shall have in all material respects duly performed and complied with all agreements and covenants required by this Agreement to be performed or complied with by them prior to or on the Closing Date.

17.1.3.The Purchaser shall have delivered to the Seller a certificate dated the Closing Date and signed by the President or a Vice President of the Purchaser to the effect set forth above in Sections 17.1.1 and 17.1.2.

17.2.Delivery of Documents.  The Purchaser shall have executed and delivered to Caliper, all documents, certificates, instruments and items required to be delivered by it at or prior to the Closing pursuant to this Agreement as set forth in Section 18.

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

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17.3.No Legal Proceeding Affecting the Closing.  At the Closing Date, there shall not have been instituted and there shall not be pending or threatened any Action and no Governmental Order shall have been entered (i) imposing or seeking to impose limitations on the ability of the Caliper to sell any of the Transferred Assets; or (ii) restraining, enjoining or prohibiting or seeking to restrain, enjoin or prohibit the consummation of the transactions contemplated hereby.

18.Closing Deliveries by the Purchaser.  At the Closing, the Purchaser shall deliver to the Seller:

(i)a confirmation of payment of the Final Purchase Price to the Purchase Price Bank Account;

(ii)a certificate, duly executed by an authorized Secretary or Assistant Secretary of the Purchaser, dated the Closing Date, to the effect that: (A)(1) the Certificate of Incorporation of the Purchaser attached to such certificate is true, correct and complete, and was in full force and effect in the form as attached to such certificate on the date of adoption of the resolutions referred to in clause (3) below, (2) no amendment to such Certificate has occurred since the date of adoption of the resolutions referred to in clause (3) below other than as shown in such certificate, (3) the resolutions adopted by the Purchaser’s directors authorizing this Agreement and the transactions contemplated hereby with respect to the Purchaser were duly adopted at a duly convened meeting thereof, at which a quorum was present and acting throughout, or by unanimous written consent, and such resolutions remain in full force and effect, and have not been amended, rescinded or modified, except to the extent attached thereto; and (B) the officers of the Purchaser executing this Agreement and the other documents, agreements and instruments to be executed and delivered by the Purchaser pursuant to this Agreement are incumbent officers of the Purchaser and the specimen signatures on such certificate are their genuine signatures;

(iii)the Bill of Sale duly executed by the Purchaser;

(iv)the Assignment and Assumption Agreement, duly executed by the Purchaser;

(v)the Transition Services Agreement, duly executed by the Purchaser; and

(vi)the certificates described in Section 21.

19.Closing Deliveries by the Seller.  At the Closing, the Seller shall deliver or cause to be delivered to the Purchaser:

(i)instruments as may be reasonably requested by the Purchaser or its counsel to transfer the Transferred Assets to the Purchaser or to evidence such transfer on the public records;

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

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(ii)a cross-receipt for the Final Purchase Price upon the Seller’s confirmation that immediately available funds in the an amount equal to the Final Purchase Price have been credited to the Purchase Price Bank Account;

(iii)the offer letters of the Key Persons duly executed by such Key Persons;

(iv)a certificate, duly executed by an authorized Secretary or Assistant Secretary of Caliper, dated the Closing Date, to the effect that: (A)(1) the Certificate of Incorporation and Bylaws of Caliper attached to such certificate are true, correct and complete, and were in full force and effect in the form as attached to such certificate on the date of adoption of the resolutions referred to in clause (3) below, (2) no amendment to such Certificate or Bylaws has occurred since the date of adoption of the resolutions referred to in clause (3) below other than as shown in such certificate, (3) the resolutions adopted by Caliper’s directors authorizing this Agreement and the transactions contemplated hereby with respect to Caliper were duly adopted at a duly convened meeting thereof, at which a quorum was present and acting throughout, or, in the case of Caliper’s directors, by unanimous written consent, and such resolutions remain in full force and effect, and have not been amended, rescinded or modified, except to the extent attached thereto; and (B) the officers of Caliper executing this Agreement and the other documents, agreements and instruments to be executed and delivered by Caliper pursuant to this Agreement are incumbent officers of Caliper and the specimen signatures on such certificate are their genuine signatures;

(v)an acknowledgment and consent, in form and substance satisfactory to the Purchaser and the lenders providing financing to the Purchaser in connection with the transactions contemplated by this Agreement, from all holders of any Funded Indebtedness of Caliper (each such holder, a “Caliper Pay-Off Amount Recipient” and all such holders, the “Caliper Pay-Off Amount Recipients”), in each case, stating that (A) effective upon the Closing, all Encumbrances in favor of the Transferred Assets shall be terminated, released and discharged and (B) that such holder shall deliver to the Purchaser or the Purchaser’s designee any instruments, certificates, statements and other instruments necessary to evidence such termination, release and discharge;

(vi)the Bill of Sale duly executed by Caliper;

(vii)the Assignment and Assumption Agreement, duly executed by Caliper;

(viii)the Trademark Assignment, duly executed by Caliper;

(x)the Patent Assignment, duly executed by Caliper;

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

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(xi)a duly executed non-foreign person affidavit of the Seller dated as of the Closing Date, sworn under penalty or perjury and in form and substance required under Treasury Regulations issued pursuant to Section 1445 of the Code stating that the Seller is not a “foreign person” as defined in Section 1445 of the Code;

(xii)the Transition Services Agreement duly executed by Caliper;

(xiii)the certificate required by Section 12.2; and

(xiv)the surrender of the Customer Documentation.

20.           Termination.

20.1.Termination Generally.  This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:

20.1.1.at any time before the Closing, by the mutual written agreement among the Purchaser and Caliper;

20.1.2.at any time before the Closing, by the Purchaser if any of Caliper’s representations or warranties contained in this Agreement were untrue or incorrect when made or become untrue or incorrect in any material respect;

20.1.3.at any time before the Closing, by Caliper if any of the Purchaser’s representations or warranties contained in this Agreement were untrue or incorrect when made or become untrue or incorrect in any material respect;

20.1.4.at any time before the Closing, by Caliper on the one hand, or by the Purchaser on the other hand, upon any material breach by any other Party of such other Party’s covenants or agreements contained in this Agreement, and the failure of such other Party to cure such breach, if curable, within thirty (30) days after written notice thereof is given by the non-breaching Party to the breaching Party;

20.1.5.at any time after December 31, 2008 (the “Final Termination Date”), by Caliper on the one hand, or by the Purchaser on the other hand, upon notification to the non-terminating Party by the terminating Party if the Closing shall not have occurred on or before such date and such failure to consummate is not caused by a breach of this Agreement by the Party purporting to so terminate this Agreement; or

20.1.6.by the Purchaser pursuant to Section 122.

20.2.Effect of Termination.

20.2.1.If this Agreement is validly terminated pursuant to Section 20.1, then this Agreement shall forthwith become void, and, subject to

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

21

Section 20.2.2 and 20.2.3 there shall be no liability under this Agreement on the part of the Parties hereto and all rights and obligations of each Party to this Agreement shall cease; provided that (i) the provisions with respect to confidentiality of Section 125 shall survive any such termination until it, by its own terms, is no longer operative; and (ii) this Section 20 shall indefinitely survive such termination.

20.2.2.If this Agreement is validly terminated as a result of a misrepresentation or a breach of any warranty made by any Party to this Agreement or as a result of a material breach by a Party of any of such Party’s covenants or agreements contained in this Agreement, or, if all conditions to the obligations of a Party at the Closing contained in Sections 16 and 17 of this Agreement, respectively, have been satisfied (or waived by the Party entitled to waive such conditions) and such Party does not proceed with the Closing, then any and all rights and remedies available to the non-breaching Parties, whether under this Agreement, at law or in equity or otherwise shall be preserved and shall survive the termination of this Agreement.

20.2.3.Notwithstanding any provision in this Agreement to the contrary, [***] (i) $[***] (ii) [***] $[***].

21.Transfer Taxes.  The Seller shall pay all transfer, documentary, sales, use, stamp, registration, and other similar Taxes and all conveyance fees, real estate recording charges and other fees (including any penalties and interest) incurred in connection with the sale and transfer of the Transfered Assets to the Purchaser to be made hereunder.  To the extent such transfer, documentary, excise, and similar taxes and real estate recording fees are reasonably determined to be the legal obligation of the Purchaser, the Seller shall deliver to the Purchaser payment for any amount due within five (5) days of the Purchaser’s written notice of such obligation.  The Purchaser shall deliver to the Seller a sale for resale certificate with respect to inventory.

V.Transition

A.Transition Date.

22.Date.  The transfer of the Transferred Assets from the Seller to the Purchaser shall be deemed to occur at 00.00 A.M. Standard Eastern Time on the Closing Date.

B.Conduct of Business Prior to the Closing Date; Post Closing Activities.

23.General.  The Seller covenants and agrees that, with respect to the Business and the Transferred Assets between October 1, 2008 and the Closing Date, it has conducted the Business in the ordinary course of business consistent with past practice as a going concern, in order to enable the Purchaser to continue the

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

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Business after the Closing Date substantially as conducted and planned by the Seller without interruption.

24.Aspects.  Without limiting the generality of the foregoing, the Seller will, with respect to the Business and the Transferred Assets between the date hereof and the Closing Date,

(i)continue its advertising and promotional activities, and pricing and purchasing policies, in accordance with past practice;

(ii)produce the Products in accordance with its existing production plans;

(iii)not shorten or lengthen the customary payment cycles for any of its payables or receivables;

(iv)use its reasonable efforts to continue in full force and effect without material modification all existing policies or binders of insurance currently maintained in respect of the Business;

(v)preserve its present business operations, organization and goodwill and current relationships with its customers, suppliers, licensors, licensees and other persons with which it has significant business relationships;

(vi)not terminate the employment or services of any of the Business Personnel, other than for cause; and

(vii)use its commercially reasonable efforts to cooperate with the Purchaser in obtaining the Consents set forth on Schedule 24 to this Agreement.

25.Non-Contractual Actions.  The Seller shall not, without the prior written consent of the Purchaser, between the date hereof and the Closing Date:

(i)cause or authorize any material change in the production process and/or the composition of the Products;

(ii)conduct business activities in connection with the Business deviating materially from, or materially exceeding, the existing past practice;

(iii)subject the Business or the Transferred Assets to any Encumbrance, other than any Encumbrance existing on the date hereof;

(iv)make any material change in its accounting policies relating to the Transferred Assets or the Business, except as required by GAAP;

(v)sell, assign, license, transfer, convey, lease or otherwise dispose of any assets of the Business, other than the sale of Devices in the ordinary course of business;

(vi)change the terms of employment of the Business Personnel;

(vii)enter into any agreement outside of the ordinary course of business, whereby any third party could be granted access to any

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

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part of the Intellectual Property rights or any confidential information of the Business;

(viii)produce the Products and perform the Services of the Business other than in accordance with its existing production plans; or

(ix)take any action or omitted to take any action which will result in a violation of any applicable Law.

26.Acquisition Proposals.  From the date hereof through the Closing (or, if earlier, the date of termination of this Agreement in accordance with Section 20), Caliper shall not sell or otherwise transfer, or grant any rights with respect to, the Business (other than sales of assets in the ordinary course of business consistent with past practices and that are specifically permitted by this Agreement) (an “Acquisition Proposal”).  In addition, from the date hereof through the Closing (or, if earlier, the date of termination of this Agreement in accordance with Section 20), Caliper shall not, and shall not cause or permit any of its Representatives to, directly or indirectly, solicit, initiate or participate in any way in discussions or negotiations with, or provide any information or assistance to, any Person or group of Persons (other than the Purchaser and its agents and Representatives) concerning any Acquisition Proposal, or assist or participate in, facilitate or encourage any effort or attempt by any other Person to do or seek to do any of the foregoing.  Caliper shall promptly communicate to the Purchaser the terms of any Acquisition Proposal which they may receive.  Nothing in this Section 26 shall prevent the Seller from soliciting, initiating, participating in discussions regarding the sale of an equity interest in, or in a merger, consolidation, liquidation, dissolution, disposition of assets of Caliper (other than any assets related to the Business); provided that any such Person assume in writing the obligations of Caliper under this Agreement.

27.Notice of Certain Events.

27.1.Caliper shall promptly notify the Purchaser of:

27.1.1.any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement or the Transaction Documents in a manner to keep the Purchaser reasonably informed as to the status of such consents;

27.1.2.any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement or any of the Transaction Documents; and

27.1.3.any material Action or litigation commenced or, to the knowledge of Caliper, threatened, relating to or involving or otherwise affecting the Company or the parties hereto and which relates to the consummation of the transactions contemplated by this Agreement.

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

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28.Zymark.  From and after the Closing Date, the Purchaser will not, and it will cause its Affiliates not to, market or sell a product or perform services under the mark “Zymark” in the Field.  In no event shall the foregoing be construed to prevent the Purchaser or any of its Affiliates from marketing or selling products or services in the Field using trademarks or servicemarks that do not include the brand “Zymark”.

C.Distribution Agreements

29.General.  Distribution Agreements are Contracts between the Seller or any of its Subsidiaries and independent Persons, which govern the marketing and selling of the Devices to, and are performing Services for, end-user customers (“Independent Distributors”), irrespective of whether such relationship is a commission, agency or a distributorship.

30.Execution.  Prior to the Closing Date, the Seller shall deliver evidence satisfactory to the Purchaser (and its counsel) that the provisions of each of the Distribution Agreements set forth on Schedule 30 to this Agreement, to the extent such provisions relate to the sale of any of the Products being sold to the Purchaser hereunder, have been terminated and are of no further force and effect.  Promptly following such termination, and unless otherwise instructed in writing by the Purchaser, the Seller shall instruct the distributors to such Distribution Agreements to return to the Seller (for the benefit and transfer to the Purchaser) any demonstration units of Products in the possession of such distributor to the extent that any such demonstration units have been loaned to such distributor by the Seller and not purchased by such distributor.

D.Transition of Sale and Service Contracts

  31.Qualification of Sales Contracts.  Sales Contracts are Contracts between the Seller or any of its Subsidiaries and a customer or an Independent Distributor with regard to the sale of Devices, irrespective of whether a single Device or a certain number of Devices have to be delivered by the Seller.  All existing Sales Contracts in effect as of the date of this Agreement are listed in Schedule 31 to this Agreement.  Thereby the Schedule differentiates between the following types of Sales Contracts.  In case of a Sales Contract with a certain number of Devices the differentiation will be applied for each Device.  If a Sales Contract comprises the performance of Services by the Seller or any of its Subsidiaries, the provisions about Service Contracts set forth in Sections 33 to 34 shall apply with regard to such Services.

31.1.Closed Orders.  Under a Closed Order all line items of such Order, including the Device, have been delivered and the sales price has been fully paid or invoiced, but the initial warranty period provided for in such Order has not yet expired.

31.2.Open Orders.  Under an Open Order, all or partial line items of the Order, for example the base Device, either (i) have not been manufactured; (ii) 

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

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have been manufactured but not delivered or (iii) the sales price has not or only partly been paid or invoiced before the Closing Date.

32.Execution.  The rights and obligations of each Party under, and the execution of, the different types of Sales Contracts are as follows:

32.1.With regard to Closed Orders, the Purchaser shall be obligated to perform warranty services under the initial warranty period for the respective Device after the Closing Date and it is not entitled to receive any compensation for such services.

32.2.With regard to Open Orders, the Purchaser shall be obliged to perform warranty services under the initial warranty period for the respective Device after the Closing Date and shall be entitled to invoice such Order upon completion of performance of such Order by the Purchaser and to receive 100% of the compensation owed under any invoice issued by the Purchaser on account of such Open Orders (including any deposit or prepayments).

33.Qualification of Service Contracts.  Service Contracts are Contracts between the Seller or any of its Subsidiaries and an end-user customer or an Independent Distributor with regard to the performance of Services.  All existing Service Contracts in effect as of the Closing Date are listed in Schedule 33 to this Agreement.  Thereby the Schedule differentiates between the following types of Service Contracts.

33.1.Regular Service Contracts: Under a Regular Service Contract the Services have to be provided regularly during the term of the Service Contract and the service charge will be paid accordingly by regularly installments.

33.2.Starter Service Contracts:  Under a Starter Service Contract the service charge for the performance of the ordered Services has already been paid before the Closing Date, although the Services have to be provided after the Closing Date.

34.Execution.  The rights and obligations of each Party under, and the execution of, the different types of Services Contracts are as follows:

34.1.Under a Regular Service Contract the Purchaser shall provide the necessary actions after Closing Date and therefore shall receive the service charge for these actions.

34.2.Under a Starter Service Contracts the Purchaser shall provide the necessary actions after the Closing Date and, except as set forth in Section 12.2, receive no remuneration for the performance of such actions.

35.[Intentionally left blank]

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

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E.Transition of Customer Documentation

36.General.  The “Customer Documentation” comprises:

36.1.a list of all customers that (i) since January 1, 2005, and to the best ability of the Seller for periods prior to January 1, 2005, had acquired a Device and/or ordered Services, and (ii) since January 1, 2005, and to the best ability of the Seller for the periods prior to January 1, 2005, made any warranty claim in writing about the respective Product; and

36.2.the full documentation about the handling of the issue by the Seller including in particular, but not limited to, the correspondence, internal notices and memoranda, failure reports and repair reports.

  37.Transfer.  The Customer Documentation will be surrendered to the Purchaser on the Closing Date and the handling of any pending warranty claims will be transferred to the Purchaser.

  38.Support.  The Seller will provide commercially reasonable support to the Purchaser with regard to the settlement of such warranty claims that exist as of the Closing Date.

F.Transition of Procurement Contracts

39.Qualification.  Procurement Contracts are all Contracts between the Seller or any of its Subsidiaries and a supplier of raw material or components for the manufacture of the Devices.

G.Transition of Material Contracts

40.Certain Transitional Matters.  Notwithstanding anything to the contrary contained in this Agreement or any of the other Transaction Documents, if the sale or delegation by Caliper, or the undertaking or assumption by the Purchaser, of any of the Transferred Assets or the Assumed Liabilities requires the Consent of any third party which is disclosed on the Disclosure Schedules but is not obtained at or before the Closing Date and the Purchaser nevertheless proceeds to the Closing, then Caliper shall use its commercially reasonable best efforts to obtain such Consent.  In addition, from and after the Closing Date until the date on which such Consent is obtained, Caliper shall cooperate with the Purchaser in any reasonable arrangement (such as a sublease, subcontract, use and service agreement, supply agreement or other contractual arrangement) designed to provide the Purchaser with the entire benefits and use, including, without limitation, 100% of the consideration, remuneration or other payments and contractual rights, of such Transferred Assets and Assumed Liabilities to the greatest extent practicable.

H.Employee Matters

41.Maintenance of Employees.  Caliper shall use all commercially reasonable efforts to retain all Business Personnel and existing management level employees whose activities or responsibilities are primarily related to the Business (unless

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

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Caliper desires to terminate an employee for cause) and promptly notify the Purchaser in writing of the termination of employment of any Business Personnel or such existing management level employee or the receipt by Caliper of notice of termination of employment of any Business Personnel or such existing management level employee and in the event Caliper receives notice that any Business Personnel or such existing management level employee intends to terminate his or her employment with the Company.

42.Transfer of Employment.  The Parties hereto acknowledge and are aware that by virtue of the sale and transfer of the Business all employment relationships of the Business Personnel with the Seller shall be terminated by the Seller as of the Closing Date.

43.Transferred Employees.  Business Personnel accepting employment with the Purchaser shall be referred to as the “Transferred Employees.”

44.Support.  The Seller shall use all commercially reasonable efforts to encourage the Business Personnel to continue to work for the Business and not to decline employment with the Purchaser.

45.Employee information.  The Seller and the Purchaser agree that as soon as practicable following the signing of this Agreement and prior to the Closing Date they shall jointly deliver to all Business Personnel a letter notifying them of the following:

(i)that as of the Closing Date their employment with the Seller shall terminate;

(ii)that, effective as of the Closing Date, the Purchaser will offer to each Transferred Employee employment on terms and conditions substantially equivalent to those in place for such Business Personnel immediately prior to the Closing;

(iii)that, effective on the Closing Date, the Purchaser will provide the Business Personnel with benefits substantially equivalent to those provided by the Seller immediately prior to the Closing (specifically excluding any equity based compensation); and

(iv)that, effective on the Closing Date, the Purchaser will provide the Transferred Employees with full credit for service years with the Seller.

46.Remuneration Rights of Transferred Employees.

46.1.Accrued Monthly Salaries.  The Seller will pay to all Transferred Employees wages and salaries (including allowances) earned prior to the Closing Date as well as the social security contributions relating thereto, and will indemnify the Purchaser against all costs, Actions and Liabilities resulting therefrom.

46.2.Accrued Compensation.  Except as set forth in Sections 9.1.3 and 47, the Seller shall bear and be responsible for all accrued compensation of the

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

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Transferred Employees attributable to periods accruing before the Closing Date.  The Purchaser shall bear and be responsible for such compensation to the Transferred Employees attributable to periods accruing on and after the Closing Date.  If applicable, for the period ending at the Closing Date, the Seller shall provide the Transferred Employees with the 13th monthly salary pro rata, which payment shall be made as soon as practicable after the Closing Date by the Seller.

46.3.Variable Part of Transferred Employees’ Remuneration (Bonus).  Except to the extent otherwise set forth in this Section 46, the Purchaser will assume, with respect to the Transferred Employees for the period prior to the Closing Date, the accrued variable part of such Transferred Employees remuneration, to the extent set forth on Schedule 7.14.

46.4.The Seller will be responsible for (A) the payment of all base salary compensation and benefits, other than compensation derived from the Seller’s Annual Performance Bonus Plans, the accrued vacation and time credits described in Section 47, due to Business Personnel with respect to their services as employees of the Seller through the close of business on the Closing Date, and (B) any and all Liabilities and obligations (including without limitation any severance payments) with respect to any current and former employees of Seller, or their respective beneficiaries and dependents that were or are incurred with respect to such individuals under any Business Benefit Plan including, without any limitation, the allocation of shares in accordance with the employee share ownership program of the Seller, or with respect to any employment or similar agreement with the Seller regardless of whether such Liabilities become known, accrue or vest before, on or after the Closing.  In addition, the Seller shall comply with applicable statutory requirements to provide continuation coverage and notice of such coverage under Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code (and any similar state law requirement) to (i) any former Business Personnel who, as of the Closing Date, has elected or is entitled to elect such coverage under the Seller’s group health plans, and (ii) any of the Business Personnel (and any covered spouse or dependent of such Business Personnel) who becomes entitled to elect such coverage by virtue of the consummation of the transactions contemplated by this Agreement; the Parties acknowledge that the Purchaser has no obligation to provide continuation coverage to such Business Employees.  The Purchaser will be responsible for providing continuation coverage under Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code (and any similar state law requirement) to any Transferred Employee who accepts an offer of employment by the Purchaser and who becomes entitled to such coverage after the Closing Date.

46.5.The Purchaser understands and acknowledges that variable compensation and benefits described in Section 46 form parts of the total annual remuneration as set forth in Schedule 46.5 to this Agreement granted by the

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

29

Seller to the Transferred Employees as performance-based opportunity to participate in the success of the Seller’s business, therefore fixed annual base salary is only a part of the annual compensation of the Transferred Employees under the Seller’s remuneration policy.  The Seller understands and acknowledges that the Purchaser will not be able to grant opportunities of identical kind in the future.  However, the Purchaser agrees to provide the Transferred Employees with a level of fixed and variable annual remuneration (including benefits) that in the aggregate is substantially equivalent to or better than the level of fixed and variable annual remuneration (including benefits), provided to them by Seller immediately before the Closing Date.

47.Accrued and Unused Vacation.  The Purchaser shall assume liability and shall honor accrued vacation time of Transferred Employees.

47.1.Any accrued and unused vacation or vacation time used in excess of that received of the Business Personnel as of the date hereof are listed in Schedule 47.1 to this Agreement.

47.2.The Seller shall be liable with regard to the Business Personnel and Transferred Employees for the unused portion (including the carrier over portion) of the following vacation entitlements prior to the Closing Date:

47.2.1.Time-credits due to over-time prior to the Closing Date;

47.2.2.Any vacation taken exceeding the pro rata accrued vacation time for the year 2008 prior to the Closing Date.

48.Key Persons.  The Key Persons are material for a successful transition of the Business.  With regard to such Key Persons the following procedure shall apply, as a condition to Closing:

48.1.The Seller will inform each Key Person immediately (but in any event no later than ten (10) days prior to Closing) about the intention to transfer the Business to the Purchaser and the employment offer of the Purchaser for such individual.

48.2.Each Key Person shall decide whether he wants to accept employment with the Purchaser and inform the Seller and/or the Purchaser accordingly.

48.3.Each Key Person willing to accept employment with the Purchaser shall sign a new offer letter with the Purchaser prior to the Closing Date.

48.4.Pursuant to the terms of the new offer letter presented to the Key Persons by the Purchaser as soon as practicable after the date hereof, the existing employment relationship and, if applicable, any employment agreement between the Key Person and the Seller shall terminate as of the Closing Date.

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

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48.5.The Seller shall be responsible and liable for any obligations arising under the existing employment relationship and, if applicable, any employment contract between the Seller and each Key Person and the Purchaser shall have no obligation under such arrangement or agreement.  .

48.6.The Purchaser shall be fully responsible and liable for its obligations to a Key Person arising under a new offer letter.

I.Cooperation after Closing Date

49.General.  From the Closing Date through the expiration of the Transition Services Agreement, the Seller and the Purchaser agree to cooperate and to take all steps as shall be reasonably necessary to ensure the successful transition of the Business from the Seller to the Purchaser in accordance with the Transition Services Agreement.  Without limiting the generality of the foregoing, the Seller shall make, or cause to be made, all filings necessary or desirable to terminate any financing statement or other notice or evidence of Encumbrances on the Transferred Assets.

50.Support of Facilities.  The Seller will provide to the Purchaser the necessary facilities for the storage of the inventory, the manufacture of the Devices and the preparation of the Services in accordance with the Transition Services Agreement.

51.General Support.  The Seller will provide for the Purchaser any additional reasonable support, in a manner that does not materially and negatively impact the Seller’s ongoing business operations, with regard to the conduct of the Business by the Purchaser (e.g.  HR activities) in accordance with the practices of the Seller prior to the Closing Date and in accordance with the Transition Services Agreement.  At Closing, but in no event later than thirty (30) days thereafter, the Seller shall deliver the Intellectual Property to the Purchaser in electronic form in accordance with the procedures described on Schedule 51; provided that the Purchaser shall be responsible for any third party licensing fees arising in connection with such electronic transfer.

52.Tax Matters.  The Seller and the Purchaser agree to utilize the standard procedure set forth in Revenue Procedure 2004-53, 2004-2 C.B. 320, with respect to wage reporting.

J.Access to Information

53.Each Party agrees that it will cooperate with and make available to the other Party, during normal business hours, all books and records, information and employees (without substantial disruption of employment) retained and remaining in existence after the Closing Date that are necessary or useful in connection with any environmental report, filing or liability, any litigation or investigation or any other matter requiring any such books and records, information or employees for any reasonable business purpose similar to the foregoing, provided that the Purchaser shall not be obliged to make available any such documents referring to any period or generated after the Closing Date,

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

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except as otherwise contemplated by this Agreement.  The party requesting any such books and records, information or employees shall bear all of the out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees, but excluding reimbursement for salaries and employee benefits) reasonably incurred in connection with providing such books and records, Information or employees.

54.For a period of six (6) years after the Closing, the Purchaser shall:

(i)retain the books and records of the Business relating to periods prior to the Closing in a manner according to reasonable business practices, and

(ii)upon reasonable notice, afford the Representatives of the Seller reasonable access (including the right to make, at the Seller’s expense, photocopies), during normal business hours, to such books and records.

VI.Representations and Warranties of the Seller

The Seller hereby represents and warrants to the Purchaser as follows, except as qualified by sections in the Disclosure Schedule.  Each such section of the Disclosure Schedule is numbered by reference to the representations and warranties in a specific Section of this Article VI.

A.Organization; Authorization and Consent

55.The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.

56.The Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the operation of the Business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not materially and adversely affect:

(i)the ability of the Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement; and

(ii)the ability of the Seller to conduct the Business prior to the Closing Date.

57.The execution and delivery of this Agreement by the Seller, the performance by the Seller of its obligations hereunder and the consummation by the Seller of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Seller.

58.This Agreement has been duly executed and delivered by the Seller, and (assuming due authorization, execution and delivery by the Purchaser) this

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

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Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against it in accordance with its terms.

59.The execution, delivery and performance of this Agreement by the Seller do not and will not

(i)violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws (or similar organizational documents) of the Seller;

(ii)conflict with or violate any Law or Governmental Order applicable to the Seller or any of its respective assets, properties or businesses, including, without limitation, the Business; or

(iii)except as set forth in Schedule 59 to this Agreement, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse or time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, Contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Seller is a party or by which any of the Transferred Assets is bound or affected or result in the creation of any Encumbrance on any of the Transferred Assets.

60.The execution, delivery and performance of this Agreement by the Seller do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority, except

(i)where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by the Seller of the transactions contemplated by this Agreement and would not have a Material Adverse Effect; and

(ii)as may be necessary as a result of any facts or circumstances relating solely to the Purchaser.

B.Financial Information

61.The Seller has delivered to the Purchaser true and correct copies of:

61.1.an unaudited balance sheet, together with notes and assumptions, of the Business dated as of September 30, 2008;

61.2.an unaudited fixed asset list as of September 30, 2008;

61.3.an unaudited summary and supporting detailed listing for all identified inventory as of September 30, 2008, including reasonable estimates where complete information was not available;

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

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61.4.an unaudited summary listing of the standard cost of goods sold for each Product together with bills of material supporting each such Product ; in all cases such standard costs reflecting the standard material and labor resource cost estimates employed in the manufacturing and costing of the Products as of September 30, 2008;

61.5.an unaudited statement of Revenue and Cost of Sales, together with notes and assumptions, based on standard cost for the Business (net sales minus standard cost) as of September 30, 2008; and

61.6.an itemized price list of the selling price per unit charged for all Products, Services and parts and accessories commonly sold by the Seller in connection with the Business.

(collectively referred to herein as the “Financial Statements” and attached as Schedule 61 to this Agreement).

62.The Financial Statements, as qualified by the notes and assumptions used in their preparation and set forth therein, were prepared from the books and records of the Seller on a basis consistent with the past practices of the Seller and, except where deviations have been noted on Schedule 62 to this Agreement, have been prepared in accordance with GAAP, applied on a consistent basis throughout the periods presented in the Financial Statements and such deviations noted on Schedule 62 do not and would not, individually or in the aggregate, have or result in a Material Adverse Effect.

63.The Financial Statements accurately reflect in all material respects the sales, gross profit and gross margin of the Business for the relevant period based on standard cost and reflect an adequate reserve for all warranty obligations of the Business through the date of the Financial Statements

64.The books and records of the Seller have been maintained in the ordinary course of business and accurately and fairly reflect, in reasonable scope and detail in accordance with good business practice, the transactions and assets and liabilities of the Business and such other information as is contained therein.

65.On and as of the date of this Agreement, and after giving effect to the Closing and any other transactions contemplated by the Transaction Documents, (i) the sum of the Seller’s Liabilities is not greater than all of the assets of the Seller at a fair valuation, (ii) the present fair salable value of the Seller’s assets is not less than that will be required to pay the probable liability of the Seller on its Liabilities as they become absolutely mature, (iii) the Seller has not incurred, will not incur, does not intend to incur and does not believe that it will incur, Liabilities beyond the Seller’s respective ability to pay such Liabilities as they mature, (iv) the Seller is not engaged in, and is not about to engage in, a business or transaction for which the Seller’s assets constitute or would constitute unreasonably small capital, and (v) the Seller is not insolvent as defined in, or otherwise in a condition which could in any circumstances then or subsequently render any transfer or conveyance made by it voidable or

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

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fraudulent pursuant to, any applicable Law pertaining to bankruptcy, insolvency or creditors’ rights generally or any other applicable Laws relating to fraudulent conveyances, fraudulent transfers or preferences.

C.Assets

66.The Seller has (and shall convey to the Purchaser at the time of the transfer of the Transferred Assets) good title to, all the Transferred Assets, free and clear of all Encumbrances.

67.All Tangible Personal Property has been maintained in accordance with Seller’s ordinary course of business, and all such items are usable for the operation of the Business, are in good working order, free of any known defects or delayed maintenance, subject only to normal wear and tear and all such Transferred Assets are adequate and suitable for the purposes for which they are presently being used.  All of the Transferred Assets are in the possession or under the control of the Seller and no Transferred Asset comprises, constitutes or in any way consists of the Seller’s equity ownership in any of its Subsidiaries.  No Person other than Caliper owns any of the Tangible Personal Property, other than leased personal property, which is used by the Seller and is material in the operation of the Business.  Except as set forth on Schedule 67 to this Agreement, the Seller has not granted, and there is not outstanding, any option, right, agreement, Contract or other obligation or commitment pursuant to which any Person could claim a right to acquire in any way any of the Transferred Assets (other than inventory to be sold in the ordinary course of business pursuant to open orders taken in the ordinary course of business) or any ownership or other material interest in the Seller, the Transferred Assets or the Business.

68.The Inventories are in all material respects (i) usable and saleable in the ordinary course of the Business as currently conducted or proposed to be conducted by the Seller; (ii) reasonable as to quantity under the present and reasonably anticipated circumstances of the Seller; and (iii) of good and merchantable quality and is free from any material defect or other material deficiency (whether in design or manufacture).

69.The Transferred Assets are sufficient to conduct the Business as previously conducted in the ordinary course and as presently proposed by the Seller to be conducted, except for the conduct of the Business related to the assets of the Seller and its Affiliates used in the performance of the transition services under the Transition Services Agreement.

C.Conduct of Business

70.The Business has been conducted in accordance with all Laws and Governmental Orders applicable to the Business and the Seller is not in violation of any such Law or Governmental Order.

71.For the fiscal year 2008, there have not been any sales or other distributions of products worldwide outside of the ordinary course of business, especially, but not

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

35

limited to, any sales actions outside the ordinary course of business in order to incentivize distributors and customers to prematurely satisfy their needs for these products for the fiscal year 2008.

72.There are no facts or circumstances which could reasonably be expected to result in any Material Adverse Effect since October 1, 2008.

73.None of the Seller, any of its directors or officers and, to the knowledge of the Seller, none of the Company’s agents, employees or representatives acting in their capacities as such has: (i) used any funds for unlawful contributions, unlawful gifts, unlawful entertainment or other unlawful expenses relating to any governmental or political activity; (ii) directly or indirectly paid or delivered any fee, commission or other sum of money or item of property, however characterized, to any finder, agent or other party acting on behalf of or under the auspices of a governmental official or Governmental Authority, in the United States or any other country, which is in any manner related to the Seller that was illegal under any federal, state or local Laws of the United States or any other country having jurisdiction; (iii) made any payment to any customer or supplier of the Company or to any officer, director, partner, employee or agent of any such customer or supplier, for the unlawful influence of any such customer or supplier or any such officer, director, partner, employee or agent; (iv) engaged in any other unlawful reciprocal practice, or made any other unlawful payment or given any other unlawful consideration to any such customer or supplier or any such officer, director, partner, employee or agent, in respect of the Business; or (v) violated any federal, state or local campaign finance, election or similar Laws.

D.Litigation

74.There are no Actions pending or, to the knowledge of the Seller, threatened against the Seller relating to, or arising out of, the Transferred Assets or the Business, and, except as set forth in Schedule 74 to this Agreement, the Seller has not received since January 1, 2005 any written notice of any material warranty or product liability claims due to alleged deficiencies of the products against the Seller.  To the knowledge of the Seller, there are no events or circumstances which would reasonably be expected to give rise to any Action by or against the Company and relating to the Business.  There are no outstanding orders, judgments, decrees or injunctions issued by any Governmental Authority against the Seller relating to the Business or which could reasonably be expected to have a Material Adverse Effect.

E.Material Contracts

75.Schedule 75 to this Agreement lists each of the following Contracts and agreements to which the Seller and/or one of its Subsidiaries is a party that relate to the Business and, subject to Sections 29 through 40, certain of which will be transferred to the Purchaser hereunder (such Contracts being “Material Contracts”):

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

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75.1.all Contracts relating to Intellectual Property to which either the Seller or one of its Subsidiaries is a party in connection with the Business;

75.2.all licensing Contracts relating to the Business;

75.3.all testing Contracts with third parties for registration evaluation, product safety or efficacy testing or any other testing relating to the Business;

75.4.all Contracts relating to the Business involving total annual payments in fiscal year 2008 in excess of $50,000 and all Contracts relating to a service or a component for a Product which is not generally and readily available in the market;

75.5.all Contracts that limit or purport to limit the ability of the Seller to compete in the Business or with any Person or in any geographic area or during any period of time, all of the foregoing with respect to the Business;

75.6.all Contracts relating to (i) the employment or engagement or termination of employment or engagement of any Transferred Employee by the Seller in connection with the Business which may not be terminated without penalty or other obligation (including any severance, termination or indemnification payment required under such Contract) by the Seller; or (ii) the payment to any Person by the Seller of any bonus, award, payment or other remuneration of any kind which is contingent on a sale of the Business or any of its assets;

75.7.all Contracts by which the Seller retains, appoints or authorizes any broker, sales agent, distributor or representative or through which the Seller is retained, appointed or authorized as a broker, sales agent, distributor or representative related to the Business;

75.8.all Contracts which have been entered into or assumed outside the ordinary course of the Seller’s business consistent with past practice;

75.9.all Distribution Agreements;

75.10.all Open Sales Contracts;

75.11.all Service Contracts with any remaining Service obligations thereunder;

75.12.all existing and active Procurement Agreements; and

75.13.all Contracts which are not otherwise required to be disclosed pursuant to Sections 75.1 through 75.12, inclusive, and which involves or are likely to involve payments from or to the Seller, in excess of $50,000 during any twelve (12) month period or that requires performance by the Business, beyond one (1) year from the date of this Agreement or that is otherwise material to the Business.

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

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Schedule 75 to this Agreement also contains a description of any proposal for the Seller to enter into any Contracts of the type listed in Sections 75.1 through 75.13, inclusive, above.  The Seller has provided true and correct copies of all the Material Contracts to the Purchaser.  As used in this Section 75, “proposal” shall mean any offer that may be unilaterally accepted by or on behalf of the proposed counter-party.

76.Each Material Contract:

76.1.is valid and binding on the Seller, and, to the knowledge of the Seller, the counterparties thereto, and is in full force and effect and

76.2.upon consummation of the transactions contemplated by this Agreement, except to the extent that any consents set forth in Schedule 76.2 to this Agreement are not obtained, shall continue in full force and effect without penalty or other adverse consequence.  Except as disclosed in Schedule 76.2 to this Agreement, the Seller is not in breach of, or default under, any Material Contract.

76.3.the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not (i) result in or give to any Person any right of termination, non-renewal, cancellation, withdrawal, acceleration or modification in or with respect to any Material Contract, (ii) result in or give to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under any Material Contract, (iii) result in the creation or imposition of any Encumbrance upon any of the Transferred Assets under the terms of any Material Contract, (iv) result in or give rise to any Action, claim or demand against the Seller (other than an account of executory obligations in accordance with the express terms of such Material Contracts to the extent not resulting from, arising out of, relating to, or in the nature of, or caused by any breach of contract, breach of warranty, tort, infringement or violation of any Law) by any other Person who is a party to any Material Contract, or (v) result in any restriction on the Seller’s rights under any Material Contract.

F.Intellectual Property

77.Schedule 77 to this Agreement sets forth a true and complete list of all Intellectual Property owned or used by the Seller that is material to the operation of the Business.

78.To the knowledge of the Seller, all Intellectual Property that is material to the operation of the Business is valid and enforceable, has not been adjudged invalid or unenforceable in whole or in part, has not been licensed to any third party in whole or in part, and has not been disclosed to any third party.

79.All Intellectual Property owned by the Seller and used solely or predominately in the operation of the Business was written, created, invented or developed solely by either (i) employees of the Seller acting within the scope of their employment

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

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or (ii) third parties who have assigned all of their rights therein to the Seller.  All other material Intellectual Property used by the Seller in the conduct of the Business is licensed to the Seller, from a third party pursuant to a valid, binding and enforceable Contract which remains in full force and will remain in full force immediately following the Closing.

80.The Seller is not infringing, and has not infringed upon, and is not misappropriating, and has not misappropriated, the rights of any Person in the conduct of the Business.  Caliper has not received any written notice of any alleged infringement or misappropriation by the Seller of the rights of any Person in connection with the Seller’s operation of the Business.  To the knowledge of the Seller, no Person is infringing or has infringed or is misappropriating or has misappropriated any of the Intellectual Property.

81.Except as set forth on Schedule 81 to this Agreement, the Seller does not have any obligation to compensate others for the use of any Intellectual Property, and has not granted to any other Person any license or other right to use, in any manner, any of such Intellectual Property, whether or not requiring the payment of royalties.

G.Licenses and Permits

82.The Seller holds all existing or pending material Product Registrations, franchises, permits, licenses, agreements, waivers and authorizations necessary in connection with the Business as currently conducted, or as proposed to be conducted, including, without limitation, licenses issued or granted by the FDA and any local government regulating food and drug businesses, products or services or authorizing the Seller to place facilities within the boundaries of a local government (collectively, the “Licenses and Permits”).

H.Taxes

83.All Tax returns required to be filed with respect to the Business prior to the date hereof have been timely filed (or, if due between the date hereof and the Closing Date, will be timely filed), and each such Tax return correctly and completely reflects liability for Taxes and all other information required to be reported thereon.  All Taxes owed with respect to the Business have been timely paid (or, if due between the date hereof and the Closing Date, will be duly and timely paid).

84.All Pre-Closing Taxes that are due and payable on the date hereof have been paid.

85.The Seller has duly and timely withheld all Taxes required to be withheld, and such withheld Taxes have been either duly and timely paid to the proper Governmental Authorities or properly set aside in accounts for such purpose.  The Company has complied with all information reporting and backup withholding requirements.  The Financial Statements reflect an adequate reserve for all Taxes payable by the Company for all taxable periods or portions thereof through the date of the Financial Statements.

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

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86.None of the Transferred Assets are subject to an Encumbrance with respect to Taxes (other than for Taxes not yet due and payable).

87.There has been no action or audit, nor to Seller’s knowledge has there been any dispute or claim (other than one that has been finally settled and fully paid), concerning any Taxes solely with respect to the Business for which the Seller might have possible liability asserted, raised, proposed or threatened by the IRS or any other taxing authority.

88.No claim has ever been made by an authority in a jurisdiction where the Seller does not file Tax returns that it is, by virtue of the Business, subject to taxation in that jurisdiction.

89.None of the Assumed Liabilities is an obligation to make a payment that is not deductible under Code Section 280G.

I.Employee Benefit Plans and Labor Matters

90.Schedule 90 to this Agreement provides a complete list of all employees solely or predominantly attributed to the Business and correctly and accurately states the employment data provided therein.

91.Employee Benefits; ERISA.

91.1.Schedule 91.1 to this Agreement sets forth a true and correct list of each of the Benefit Plans presently or within the Seller’s current fiscal year (“Business Benefit Plans”) sponsored, maintained, contributed to, or required to be contributed to by the Seller or ERISA Affiliates in connection with the Business or in which any Business Personnel is or could be a participant (other than Business Benefit Plans for Business Personnel in Belgium and Switzerland).  Except as otherwise provided for in this Agreement, neither the Seller nor any ERISA Affiliate thereof has any commitment or formal plan, whether legally binding or not, to create any additional employee benefit plan or modify or change any existing Business Benefit Plan that would affect any Business Personnel.  The Seller has heretofore made available to the Purchaser upon request, with respect to each of the Business Benefit Plans, true and correct copies of each of the following documents if applicable:  (i) the Plan document and any amendments thereto (or if the Plan is not a written Benefit Plan, a description thereof), (ii) the most recent summary plan description and related summaries of material modifications with respect to each such plan intended to qualify under Section 401 of the Code, (iii) the most recent determination or opinion letters received from the IRS; and (iv) the latest Form 5500 Annual Report and Schedule A and Schedule B thereto.

91.1.1.The consummation of the transactions contemplated by this Agreement will not, by itself or with the passage of time, (i) entitle any current or former employee or officer of the Business to severance pay, unemployment compensation or any

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

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other payment, except as expressly provided in this Agreement, or (ii) accelerate the accrual or time of payment or vesting, or increase the amount, of compensation due any such employee, officer or director.

91.1.2.Each of the Benefit Plans intended to be compliant with Section 401(a) of the Code (collectively, the “Seller Savings Plan”) has received a favorable determination letter from the IRS that such plan is qualified under the Code and no circumstances exist that are likely to cause such plan to cease being so qualified.  The Seller Savings Plan complies and has been maintained in all material respects with its terms and all requirements of applicable law and there has been no notice issued by any Governmental Authority questioning or challenging such compliance.

91.1.3.The transactions contemplated by this Agreement will not result in the imposition of any Encumbrance relating to the Business Benefit Plans upon the Transferred Assets.  Neither the Seller nor any of its ERISA Affiliates have incurred any Encumbrance under Section 401(a)(29) of the Code or any Liabilities for any Tax or civil penalty imposed by Sections 4971, 4975, or 4976 of the Code or Section 502 of ERISA and no condition or set of circumstances exists that could reasonably be expected to present a risk to any of the Seller or its ERISA Affiliates of incurring such a Lien.

91.1.4.None of the Benefit Plans is a multiemployer plan as defined in Section 3(37) or Section 4001(a)(3) of ERISA, or Section 414(f) of the Code (a “Multiemployer Plan”).  Neither the Seller nor any of its ERISA Affiliates has ever contributed to a Multiemployer Plan or has incurred or expects to incur any withdrawal liability (either as a contributing employer or as part of a controlled group which includes a contributing employer) to any Multiemployer Plan in connection with any complete or partial withdrawal from such plan occurring on or before the Closing or otherwise.

91.1.5.Except as set forth in Schedule 91.1.5 to this Agreement, neither the Seller nor any of its ERISA Affiliates has ever established or contributed to any “employee benefit plan” (as defined in Section 3(3) of ERISA) that is or was subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code (a “Title IV Plan”), and no event has occurred which could reasonably be expected to cause the Seller or any of its ERISA Affiliates to have any Liability under ERISA or the Code with respect to any Title IV Plans.  Neither the Seller nor any of its ERISA Affiliates has Liability with respect to any Person under Title IV of ERISA.

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

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J.Environmental Matters

92.The Business has been conducted in material compliance with all applicable Environmental Laws and the Seller has obtained and is in material compliance with all Environmental Permits relating to the Business.  There are no written Claims pursuant to any Environmental Law pending or, to the knowledge of the Seller, threatened against the Seller relating to the Business, and there is no pollution of the soil, ground-water, water, air or buildings at any real property owned or leased by the Seller, the investigation, containment or remediation of which would materially interfere with or have a Material Adverse Effect on the Business.

93.The Purchaser acknowledges that

93.1.the representations and warranties contained in Section 92 are the only representations and warranties being made with respect to compliance with or liability under Environmental Laws or with respect to any environmental, health or safety matter, including natural resources, related in any way to the Transferred Assets or the Business or to this Agreement or its subject matter; and

93.2.no other representation contained in this Agreement shall apply to any such matters and no other representation or warranty, express or implied, is being made with respect thereto.

K.General

94.To the knowledge of Caliper, all information furnished, to be furnished or caused to be furnished to the Purchaser by or on behalf of Caliper for the purposes of or in connection with this Agreement, or any transaction contemplated by this Agreement is, or if furnished after the date of this Agreement, shall be, true and complete in all material respects and does not, and if furnished after the date of this Agreement, shall not, contain any untrue statement of material fact or fail to state any material fact necessary to make such information, in light of the circumstances in which such statements were made, not misleading.

95.Neither the Seller, nor any of its Representatives has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finder fees in connection with the transactions contemplated by this Agreement.

L.No Other Representations or Warranties

96.Except as specifically set forth in this Agreement, neither the Seller, nor any of its Representatives has made, or shall be deemed to have made, or is liable for, or bound in any manner by, any other representation or warranty regarding the Transferred Assets.

VII.Representations of the Purchaser

97.The Purchaser hereby represents and warrants to the Seller as follows:

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

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A.Organization; Authorization and Consent

98.The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.

99.The Purchaser is duly licensed or qualified to do business and is in good standing in each Jurisdiction in which the properties owned or leased by it, or the operation of its business, make such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not adversely affect the ability of the Purchaser to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement.

100.The execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Purchaser.

101.This Agreement has been duly executed and delivered by the Purchaser and (assuming due authorization, execution and delivery by the Seller) this Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms.

102.No Conflict.  The execution, delivery and Performance of this Agreement by the Purchaser do not and will not:

(i)violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws (or similar organizational documents) of the Purchaser; or

(ii)conflict with or violate any Law or Governmental Order applicable to the Purchaser or any of its assets, properties or businesses.

103.The execution, delivery and performance of this Agreement by the Purchaser do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority, except (i) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by the Purchaser of the transactions contemplated by this Agreement and (ii) as may be necessary as a result of any facts or circumstances relating solely to the Seller.

B.Financing

104.The Purchaser has, and will have as of the Closing, sufficient funds available to consummate the transactions contemplated by, and perform its obligations under, the Transaction Documents and pay the fees and expenses it incurs in connection with such transactions and obligations.

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

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C.Litigation

105.No claim, Action, proceeding or investigation is pending or, to the knowledge of the Purchaser, threatened that seeks to delay or prevent the consummation of, or which would be reasonably likely to adversely affect the Purchaser’s ability to consummate, the transactions contemplated by this Agreement.

D.No Other Representations or Warranties

106.Except as specifically set forth in this Article VII, neither the Purchaser, nor any of its Representatives, has made, or shall be deemed to have made, or is liable for, or bound in any manner by, any other representation or warranty.

VIII.Restrictive Covenants

107.Non-Competition; Non-Solicitation; Exceptions.

107.1.The Seller covenants and agrees that on and after the Closing until the fifth (5th) anniversary of the Closing Date, it shall not, directly or indirectly, and shall not permit its Affiliates to, engage, participate or otherwise obtain an interest in (whether as principal, agent, officer, director, employee, consultant, stockholder, or otherwise, whether alone or in association with any other Person, corporation or other entity) in any Competing Business.

107.2.The Seller covenants and agrees that on and after the Closing until the fifth (5th) anniversary of the Closing Date, it shall not, and shall not permit its Affiliates to, directly or indirectly, influence or attempt to influence any customer, supplier or contractor of the Purchaser or any of its Affiliates to alter or amend negatively or to terminate its relationship with the Purchaser with respect to the Business.

107.3.Each Party covenants and agrees that on and after the Closing until the fifth (5th) anniversary of the Closing Date, it shall not, and shall not permit its Affiliates to, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee or independent contractor of the other Party to leave the employ of or terminate his or its contractual relationship with such other Party for any reason whatsoever, nor offer or provide employment or a contractual relationship to such employee or independent contractor (whether such employment or contractual relationship is with such other Party or any Affiliate thereof or any other business or enterprise), either on a full-time basis or part-time or contractual or consulting basis, to any Person who then currently is, or who within one (1) year prior thereto had been, employed in or contracted with such other Party.

107.4.In addition to, and without limiting the generality of the foregoing, the Seller further covenants and agrees that on and after the Closing until the first (1st) anniversary of the Closing Date, it shall not, and shall not permit its Affiliates to, directly or indirectly, hire any Business Personnel who

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

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declines employment with the Purchaser and does not become a Transferred Employee hereunder.

107.5.The Seller acknowledges that its covenants set forth in this Section 107 are of a special, unique, unusual and extraordinary character, which give them peculiar value the loss of which cannot be reasonably or adequately compensated in an action of law, and that, in the event there is a breach of the provisions of this Section 107 by it, the Purchaser will suffer irreparable harm, the amount of which will be impossible to ascertain.  Accordingly, the Purchaser shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, to obtain damages for any breach or to enforce specific performance of the provisions or to enjoin the Seller from committing any act in breach of this Section 107.  If the Purchaser is obliged to resort to the courts for the enforcement of any of the covenants contained in this Section 107 each such covenant shall be extended for a period of time equal to the period of such breach plus the time equal to the period during which the Purchaser seeks remedies in support thereof, if any, which extension shall commence on the later of (i) the date on which the original (unextended) term of such covenant is scheduled to terminate or (ii) the date of the final court order (without further right of appeal) enforcing such covenant.

107.6.The Seller shall not, and shall cause its respective Affiliates not to, at any time before or after the Closing Date, directly or indirectly, make disparaging remarks about the Purchaser or any of its respective directors, managers, officers or employees, or the business of the Purchaser.

107.7.Notwithstanding anything herein to the contrary, (i) it shall not be a breach of the covenant contained in Section 107.1 for the Seller to own mutual funds or own less than five percent (5%) of the equity interests of any Person whose equity interests are publicly traded; and (ii) it shall not be a breach of the covenant contained in Section 107.3 for the Seller or the Purchaser, as applicable, to run general advertisements for employment opportunities in newspaper publications or by similar means.

IX.Indemnification.

108.Survival of Representations and Warranties.  The respective rights of the Purchaser Indemnified Persons (as defined below) under Section 109.1.1(A) to seek indemnification for any Damages under this Article IX for breach by the Seller of the representations and warranties set forth in Article VI or in any certificate, document or instrument delivered at the Closing will survive the Closing and continue in full force and effect until 5:00 p.m., local time on the twelve (12) month anniversary of the Closing Date (the “Expiration Date”), at which time such rights will terminate; provided, however, that such rights will survive to the extent of any Damages incurred if a notice of such Damages has been given to Caliper, on or before 5:00 p.m., local time on the Expiration Date

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

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and until such time as such indemnity claim has been fully quantified and finally resolved.  Notwithstanding the foregoing, the representations and warranties set forth in Sections 55, 57, 66, 67 (only with respect to the second and third sentences thereof) 80, 83, 84, 85, 86, 87, 88, 89, 92 and 95 will survive the Closing and continue in full force and effect until ninety (90) days after the date on which the statute of limitations applicable to the subject matter addressed thereunder expires.

109.Indemnification by Caliper.

109.1.Indemnification by Caliper.  Subject to the limitations set forth in this Article IX, from and after the Closing Date, Caliper (the “Seller Indemnitor”) will indemnify and hold harmless the Purchaser and its Representatives and Affiliates (hereinafter referred to individually as a “Purchaser Indemnified Person” and collectively as the “Purchaser Indemnified Persons”), from and against any and all Damages that may be imposed upon, incurred by or asserted against any Purchaser Indemnified Person to the extent resulting from, relating to, arising out of, or in connection with:

109.1.1.any misrepresentation or breach of or default in connection with any of (A) the representations and warranties contained in Article VI or in any certificate, document or instrument delivered by or on behalf of Caliper at the Closing and (B) any of the covenants and agreements given or made by Caliper in this Agreement;

109.1.2.any Pre-Closing Taxes;

109.1.3.any of the Retained Liabilities; or

109.1.4.any Third Party Claim relating to any of the foregoing.

109.2.Maximum Indemnification.  The Seller Indemnitor’s obligations to make indemnification payments to the Purchaser Indemnified Persons under Section 109.1.1(A) shall not exceed an amount equal to $[***] (the “Seller Indemnitor’s Indemnification Cap”).  Such Seller Indemnitor’s Indemnification Cap limitation shall not apply to any Damages relating to a misrepresentation or breach of any of the representations and warranties contained in Sections [***].  In addition, the foregoing Seller Indemnitor’s Indemnification Cap limitation shall not impair any claim that any Purchaser Indemnified Person may have against the Seller Indemnitor on account of such Seller Indemnitor’s fraud.

109.3.Basket.  The indemnification obligations of the Seller Indemnitor pursuant to Section 109.1.1(A) shall apply only to the extent that the Damages incurred in connection therewith exceeds $[***] in the aggregate (the “Threshold Amount”) and no claim for indemnification shall be payable by the Seller Indemnitor with respect thereto unless and until the

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

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aggregate Damages incurred by all of the Purchaser Indemnified Persons under Section 109.1.1(A) exceeds the Threshold Amount.  If the Threshold Amount is exceeded, then Damages shall include the Threshold Amount.  Such Threshold Amount limitation shall not apply to any Damages relating to a misrepresentation or breach of any of the representation and warranties contained in Sections [***].  The determination of whether Damages have been sustained or suffered arising out of or connected to any misrepresentation or breach of any of the representations and warranties contained in Article VI for purposes of Section 109.1.1(A) shall be made without giving effect to any “material,” “materiality,” or “Material Adverse Effect” qualification contained in such representation and warranty.  In addition, the foregoing Threshold Amount limitation shall not impair any claim that any Purchaser Indemnified Person may have against the Seller Indemnitor on account of such Seller Indemnitor’s fraud.

110.Third-Party Claims; Settlements.

110.1.If any Purchaser Indemnified Person (the “Indemnified Party”) receives notice of a demand for arbitration, summons or other notice of the commencement of a proceeding, audit, investigation, review, suit or other action, or any claim or demand, by a third party (any such action, a “Third Party Claim”) for which it intends to seek indemnification hereunder, it shall give the prompt written notice of such claim (together with all copies of the claim, any process served, and all filings with respect thereto) to the Seller (the “Indemnifying Party”); provided that the failure to do so will not relieve the Indemnifying Party from any liability except to the extent that the Indemnifying Party has been materially prejudiced by the failure or delay in giving such notice.  The Indemnifying Party shall have the right to conduct and control, through counsel (reasonably acceptable to the Indemnified Party) of its own choosing and at the Indemnifying Party’s own cost, the defense of any Third Party Claim and the compromise or settlement thereof.  The Indemnifying Party shall make its election to assume control of the defense and compromise or settlement of such Third Party Claim within thirty (30) calendar days (or in the case of any Action, ten (10) calendar days) after the Indemnifying Party’s receipt of notice of the Third Party Claim.  If the Indemnifying Party does not assume such control within the required time frame, then the Indemnified Party shall have the right to control the defense and compromise or settlement of the Third Party Claim at the Indemnifying Party’s expense with the reasonable fees, expenses and disbursements of the Indemnified Party’s counsel reimbursed by the Indemnifying Party as incurred.  Notwithstanding the foregoing, in no event shall the Indemnifying Party (i) admit any liability with respect to any Third Party Claim, or (ii) compromise or settle any Third Party Claim unless the Indemnifying Party shall have given the Indemnified Party written notice of the terms of the proposed settlement at least twenty (20) days prior to entering into such settlement and the Indemnified Party shall have consented in writing to such settlement, which consent shall not be

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

47

unreasonably withheld, delayed or conditioned.  The Indemnified Party may, at its election, participate in the defense of any claim, action or suit being controlled by the Indemnifying Party through counsel of the Indemnified Party’s choosing, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party, unless the Indemnified Party shall have been advised by such counsel that there may be one or more legal defenses available to it that are different from or in addition to those available to the Indemnifying Party or that the interests of the Indemnifying Party and the Indemnified Party reasonably conflict (in which case, if the Indemnified Party notifies the Indemnifying Party in writing that the Indemnified Party elects separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of the Indemnified Party and the Indemnifying Party shall reimburse the Indemnified Party the reasonable fees, expenses and disbursements of the Indemnified Party as incurred with respect to such different or additional defenses).

110.2.Notwithstanding anything to the contrary contained in Section 110.1, if the underlying Third Party Claim (i) seeks an order, injunction or other equitable relief against the Purchaser or any of its respective Affiliates or the Representatives of any of the foregoing; (ii) involves criminal proceedings; (iii) could reasonably be expected, when aggregated with all other unresolved indemnification claims asserted by any one or more Purchaser Indemnified Persons, to result in Damages in excess of the Seller Indemnitor’s Indemnification Cap; or (v) is asserted on or after the Expiration Date, then the Indemnified Party shall have the right to control the defense and compromise or settlement of such Third Party Claim and the Indemnifying Party shall reimburse the Indemnified Party the reasonable fees, expenses and disbursements of the Indemnified Party as incurred.

110.3.If any Purchaser Indemnified Person is controlling the defense and compromise or settlement of any Third Party Claim  pursuant to the provisions of this Section 110, then such Purchaser Indemnified Person shall be entitled to do so, with counsel of its own choosing, and (i) settle, with the Seller Indemnitor’s consent which shall not be unreasonably withheld, delayed or conditioned, such Third Party Claim and then recover from the Seller Indemnitor the amount of such settlement and all other Damages to which the Purchaser Indemnified Person is entitled to recover with respect to such Third Party Claim, or (ii) litigate the Third Party Claim to the completion of trial or arbitration and then recover from the Seller Indemnitor the amount of the judgment, order, verdict or award, if any, against the Purchaser Indemnified Person and all other Damages to which the Purchaser Indemnified Person is entitled to recover with respect to such Third Party Claim.

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

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X.General Provisions

111.Expenses.  Subject to Section 20.2, and except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses, whether or not the Closing shall have occurred.

112.Fees commissions.  No broker, finder, investment banker or any other person is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement to be paid by a Party based upon arrangements made by or on behalf of the other Party.

113.Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by telecopy, by telegram, by telex or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 113):

113.1.if to the Seller:

Caliper Life Sciences, Inc.
68 Elm Street
Hopkinton, MA 01748, USA
Telecopy:      
Attention: Chief Financial Officer

with a copy (which shall not constitute notice) to:

Caliper Life Sciences, Inc.
850 Marina Village Parkway
Alameda, CA 94501-1038
Telecopy: 510-291-6136
Attention: General Counsel

113.2.if to the Purchaser:

Sotax Corporation
411 Caredean Drive
Horsham, PA 19044, USA
Telecopy: 215-442-1514
Attention: Head of Business Unit

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

49

with a copy (which shall not constitute notice) to:

Pepper Hamilton LLP
The New York Times Building
37th Floor
620 Eighth Avenue
Telecopy: 267-200-0861
Attention: James D. Rosener, Esquire

The Seller and the Purchaser agree that, notwithstanding the Electronic Signatures in the Global and National Commerce Act of 2000 or any comparable legislation of any other Jurisdiction, notice by electronic transmission is not sufficient hereunder.

114.Public Announcements.  Except as required by Law or stock exchange regulation, no Party shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior consent of the other Party, and the Parties shall agree as to the timing and contents of any such press release or public announcement.

115.Assignment.  Neither Party may, or may purport to, assign, transfer, charge or otherwise deal with all or any of its rights or obligations under this Agreement in whole or in part, nor grant, declare, create or dispose of any right or interest in it without the prior written consent of the other Party; provided that (i) the Purchaser may assign any or all of its rights and interests under this Agreement to one or more of its Affiliates, and (ii) any or all of the respective rights and interests of the Purchaser and the Seller under this Agreement (A) may be assigned to any purchaser of substantially all of the assets of the Purchaser or the Seller, (B) may be assigned as a matter of law to the surviving entity in any merger, consolidation, share exchange or reorganization involving the Purchaser or the Seller, and (C) may be assigned as collateral security to any lender or lenders (including any agent for any such lender or lenders) or to any assignee or assignees of such lender, lenders or agent.

116.Waiver.  The failure by a Party to insist on any occasion upon the performance of the terms, conditions and provisions of Agreement shall not act as a waiver of any of its provisions or as an acceptance of any Amendment.

117.Amendment.  An Amendment of any of the provisions of this Agreement is valid only if it is in writing and signed by or on behalf of each Party hereto.  The term “Amendment” shall include any supplement, deletion or replacement or other modification however effected.  No Amendment shall constitute a general waiver of any provision of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement, which have already accrued up to the date of the Amendment, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so amended.

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

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118.Rules of Construction.  The words “hereby,” “herein,” “hereof;” “hereunder” and words of similar import refer to this Agreement as a whole (including any Exhibits and Schedules hereto) and not merely to the specific section, paragraph or clause in which such word appears.  All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The definitions given to terms in this Agreement shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  Except as otherwise expressly provided herein, all references to “dollars” or “$” shall be deemed references to the lawful money of the United States of America.

119.Abrogation.  This Agreement abrogates any other agreement concluded by the Parties before the signing of it.

120.Entire Agreement.  This Agreement (together with the Schedules and Exhibits), the Transaction Documents and the Confidentiality Agreement constitute the entire agreement and understanding between the Parties related to the subject matter hereof.

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

122.Risk of Loss.  The risk of loss for the Transferred Assets shall rest with Caliper until the Closing.  If before the Closing, all or any of the Transferred Assets shall be damaged or destroyed by fire or other casualty, then Caliper shall notify the Purchaser promptly thereof.  In the event of the damage or destruction of any of the Transferred Assets, Caliper shall repair or restore such Transferred Assets before the Closing Date at no cost or expense to the Purchaser.  If any material portion of the Transferred Assets are so damaged or destroyed and cannot be repaired or restored before the Closing Date then the Purchaser shall have the right and option either to terminate the Purchaser’s obligations or to elect nevertheless to proceed to the Closing.  If the Purchaser elects to proceed to the Closing, then (i) at the Closing, Caliper shall sell the Transferred Assets to the Purchaser, as so damaged or destroyed and shall assign to the Purchaser all of Caliper’s rights to all damages or insurance proceeds theretofore paid to Caliper or thereafter payable to Caliper by reason of such damage or destruction and (ii) from and after the Closing, the Purchaser shall have the sole right and option, to

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

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negotiate for, claim, contest and receive all damages and all insurance proceeds on account of such damage or destruction.  To the extent that any damages, insurance proceeds or awards are not available or sufficient to cover any such damage or destruction, the Purchase Price shall be reduced at the Closing to reflect such damage or destruction.

XI.Governing Law; Jurisdiction

123.Governing Law.  This Agreement shall be governed as to its validity, interpretation and effect by the laws of the State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than New York.

124.Jurisdiction.  The parties hereto unconditionally and irrevocably agree and consent to the exclusive jurisdiction of, and service of process and venue in, the United States District Court for the Southern District of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and further agree:

(i)not to commence any such action, suit or proceeding except in any such court and

(ii)upon the commencement of any action, suit or proceeding in accordance with the terms hereof, to waive trial by jury with respect to such action, suit or proceeding.

125.Confidentiality.  The Parties hereto agree that with respect to the disclosure of information furnished hereunder or in connection herewith, the Parties shall be bound by the terms of the Confidentiality Agreement; provided, that from and after the Closing, the foregoing obligations of the Purchaser and its Affiliates under the Confidentiality Agreement with respect to information regarding the Business shall terminate.  Notwithstanding the foregoing, (i) each Party hereby consents to the disclosure of information regarding the other Party to the extent necessary to make filings with Governmental Authorities or otherwise obtain the consent of a Governmental Authority that is necessary to be made or obtained to consummate the transactions contemplated hereby or to obtain financing to consummate the transactions contemplated by this Agreement, and (ii) the Purchaser acknowledges that the Seller intends to file this Agreement with the Securities and Exchange Commission.

126.Counterparts; Execution by Facsimile.  This Agreement may be executed in one or more counterparts (including execution by means of facsimile), and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

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

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[Signature Page Follows]

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

53

IN WITNESS WHEREOF, the undersigned have executed this Asset Sale and Purchase Agreement by and through their respective duly authorized Representatives.

October             , 2008	October             , 2008
Caliper Life Sciences, Inc.	Sotax Corporation
68 Elm Street Hopkinton, MA 01748, USA	411 Caredean Drive Horsham, Pennsylvania 19044, USA
E. Kevin Hrusovsky	Patrick Ballmer
President and Chief Executive Officer	Authorized Signatory

[Signature Page to Asset Sale and Purchase Agreement]

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

EX-2.7

Exhibit 2.7

Execution Version

ASSET PURCHASE AGREEMENT

between:

CALIPER LIFE SCIENCES, INC.,
a Delaware corporation

and

DIONEX CORPORATION,

a Delaware corporation

Dated as of November 10, 2008

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

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is entered into as of November 10, 2008, by and between: Caliper Life Sciences, Inc., a Delaware corporation (the “Seller”); and Dionex Corporation, a Delaware corporation (the “Purchaser”).  Certain capitalized terms used in this Agreement are defined in Exhibit A.

RECITAL

The Seller and the Purchaser wish to provide for the sale of the Transferred Assets (as defined in Section 1.1) to the Purchaser and/or an Affiliate of the Purchaser on the terms set forth in this Agreement.

AGREEMENT

The parties to this Agreement, intending to be legally bound, agree as follows:

1.SALE OF TRANSFERRED ASSETS; RELATED TRANSACTIONS.

1.1          Sale of Transferred Assets.  The Seller shall cause to be sold, assigned, transferred, conveyed and delivered to the Purchaser and/or (at the Purchaser’s discretion) an Affiliate of the Purchaser, at the Closing (as defined in Section 1.7), the following properties, rights, interests and tangible and intangible assets, existing as of the date of this Agreement, whether owned by the Seller or any Affiliate of the Seller and wherever held (including in a facility owned or occupied by the Seller or any Affiliate of the Seller or in any Customer Facility) (the “Transferred Assets”), on the terms and subject to the conditions set forth in this Agreement:

(a)           Proprietary Assets: The trade secrets, know-how, inventions, designs, drawings and other Intellectual Property and Intellectual Property Rights that are used in or that relate to the AutoTrace Offering, and all goodwill related to the AutoTrace Offering, that are described on Schedule 1.1(a)(2) (the Intellectual Property, Intellectual Property Rights and goodwill referred to in this Section 1.1(a), being referred to in this Agreement as the “Transferred IP”).

(b)           Inventory: All of the inventory (including demo products, spare parts, raw materials, work in process and finished goods) that relate to the AutoTrace Offering and identified on Schedule 1.1(b), (the inventory referred to in this Section 1.1(b), being referred to in this Agreement as the “Transferred Inventory”).

(c)           Equipment: The test fixtures that relate to the AutoTrace Offering identified on Schedule 1.1(c) (the equipment referred to in this Section 1.1(c) being referred to in this Agreement as the “Transferred Equipment”).

(d)           Software.  A worldwide, perpetual, irrevocable, transferable, nonexclusive, fully-paid, royalty-free license to the ZyOs Operating System and EasyLab programming language, as described in Schedule 1.1(d) (collectively, the “Software”), for use with the AutoTrace Offerings or any successor products to the AutoTrace Offerings, and the Seller hereby grants to the Purchaser such license to Software, with the right to sublicense, that allows the Purchaser to commercialize and exploit the Software to fullest extent as if the Purchaser owned the Software including, without limitation, the rights

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

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to: (i) access, support and maintain the Software; (ii) create derivative works of the Software including updates, upgrades, modifications, enhancements and customizations; (iii) compile object code, if any, from the Software and derivative works thereof; (iv) link, embed, combine and otherwise utilize the Software with other source and object code (whether owned or licensed by the Purchaser) to create applications; (v) directly and indirectly license, sublicense and distribute the Software (and derivative works thereof) and applications, either separately or with the AutoTrace Offering; and (vi) copy, install and use the Software as necessary or desirable to enjoy the foregoing rights.  Seller shall provide to Purchaser the source code for the software, including the listing of all known bugs and all build tools required to compile the source into executables, and all application notes, user manuals and other documentation.  Purchaser shall own all, right, title and interest, including all intellectual property rights, in any modifications or derivate works of the Software created by or for Purchaser.

(e)           Contracts: Subject to the terms of the Transition Services Agreement, all rights of the Seller or any Affiliate of the Seller under  the Seller Contracts identified on Schedule 1.1(e).

(f)            Claims: All Claims (including Claims for past infringement of Transferred IP) of the Seller or any Affiliate of the Seller against other Persons relating to the Transferred Assets (regardless of whether or not such Claims have been asserted by the Seller or any Affiliate of the Seller), and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery possessed by the Seller or any Affiliate of the Seller (regardless of whether such rights are currently exercisable) relating to the Transferred Assets.

(g)           Promotional Materials, Records, Etc.: All advertising and promotional materials, and all books (including log books), records (including contact information, files and other data relating to the customers of the AutoTrace Offering), files and data, in each case that are used in or that relate to the AutoTrace Offering (the “Transferred Books”).

(h)           Governmental Authorization: Any Governmental Authorizations held by the Seller or any Affiliate of the Seller that are or were used in or that relate to the AutoTrace Offering.

Notwithstanding the foregoing, the parties agree that neither the Seller nor any Affiliate of the Seller is selling, assigning, transferring, conveying or delivering to the Purchaser or an Affiliate of the Purchaser, and the Transferred Assets shall not include, any of the assets specifically identified on Schedule 1.1A (collectively, the “Excluded Assets”).

1.2          Agreements Relating to Transfer of Transferred Assets.

(a)           At the request of the Purchaser, any of the Transferred Assets that can be transmitted in electronic format will be so transmitted to the Purchaser or an Affiliate of the Purchaser promptly following the Closing

(b)           Promptly (and in any event no later than 30 days) after the Closing Date, the Seller shall cause to be provided to the Purchaser or an Affiliate of the Purchaser all materials and information (including the materials and information referred to on Schedule 1.2(b)) that are used in or that relate to the Transferred Assets, and shall take all other steps reasonably required to enable the

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

2

Purchaser or an Affiliate of the Purchaser to obtain possession of and good and valid title to, and to exploit, the Transferred Assets.

(c)           Subject to the terms of the Transition Services Agreement (defined below), the following provisions shall apply with respect to the physical delivery of the Transferred Inventory, Transferred Equipment and Transferred Books to the Purchaser (the “Tangible Transferred Assets”):

(i)            Until otherwise notified by the Purchaser in writing, any and all Tangible Transferred Assets (other than Transferred Inventory sold by the Seller to customers of Seller in accordance with the Transition Services Agreement) shall remain at the same location that such Tangible Transferred Assets were located at as of the Closing Date, and subsequent delivery of the Tangible Transfer Assets to the Purchaser shall be done in accordance with the Transition Services Agreement; and

(ii)           As soon as practicable after receipt of written request from the Purchaser, the Seller shall cause the Tangible Transferred Assets to be delivered to a location (or locations) designated by the Purchaser in writing.  The Seller shall bear the costs for relating to the delivery of such Tangible Transferred Assets to the Purchaser.

(d)           As of the date of the termination of the Transition Services Agreement, the Transferred Inventory and Transferred Equipment shall be free and clear from any Encumbrances which have not been approved by Purchaser.

(e)           Seller will deliver to Buyer prior to January 31, 2009, four hundred (400) pieces of the 8749 microprocessor and Buyer will pay Seller the cost of such microprocessor plus a 10% mark-up.

1.3          Purchase Price.

(a)           Subject to Section 1.3(b) below, as consideration for the sale, assignment, transfer, conveyance and delivery of the Transferred Assets pursuant to this Agreement at the Closing, the Purchaser shall pay (or cause to be paid) to the Seller (or to one or more Affiliates of the Seller), in cash, a total of $5,000,000 by wire transfer of immediately available funds to one or more account numbers provided to the Purchaser by the Seller prior to the Closing (it being understood that if the Seller desires that any portion of the amount specified in this Section 1.3 be paid to any Affiliate of the Seller, the Seller shall provide the Purchaser with written instructions with respect thereto prior to the Closing).

(b)           Within two weeks following the Closing Date, the Seller shall deliver to the Purchaser a certificate, signed by the Chief Financial Officer of the Seller, setting forth the net book value of the Transferred Inventory, as determined in accordance with U.S. generally accepted accounting principles, and if the aggregate net book value of such Transferred Inventory is less than $600,000, the Seller shall pay to the Purchaser, within three business days after the delivery of such certificate, an amount equal to the amount by which the aggregate net book value of the Transferred Inventory is less than $600,000.

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

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1.4          Assumption of Liabilities.

(a)           Except as set forth in Section 1.4(b), neither the Purchaser nor any Affiliate of the Purchaser shall assume any Liabilities of the Seller or any Affiliate of the Seller (whether or not related to the Transferred Assets), including without limitation: (i) Tax Liabilities of the Seller or any Affiliate of the Seller; (ii) any Liabilities of the Seller or any Affiliate of the Seller relating to accounts payable, indebtedness, legal services, accounting services, financial advisory services, investment banking services or other professional services performed in connection with the sale of the Transferred Assets; (iii) any wages, salaries, severance payments or other Liabilities relating to any employee of the Seller or any Affiliate of the Seller; (iv) any environmental Liabilities; (v) any Liabilities with respect to Contracts; (vii) any Liabilities for product or design defects for AutoTrace Offerings manufactured by Seller, or (viii) other Liabilities.

(b)           Notwithstanding Section 1.4(a), the Purchaser and/or (at the Purchaser’s discretion) an Affiliate of the Purchaser shall assume the obligations of the Seller or, if applicable, the applicable Affiliate of the Seller, under the Seller Contracts identified on Schedule 1.4(b) (the “Assumed Liabilities”).

1.5          Sales Taxes.  The Seller shall bear and pay (or cause one or more of its Subsidiaries to bear and pay), and shall reimburse the Purchaser and the Purchaser’s Affiliates for (or cause one or more of its Subsidiaries to reimburse the Purchaser and the Purchaser’s Affiliates for), any sales taxes, value added taxes, use taxes, transfer taxes, documentary charges, recording fees or similar taxes, charges or fees that may become payable in connection with the sale of the Transferred Assets to the Purchaser or in connection with any of the other Transactions.  The Purchaser shall deliver to the Seller a sale for resale certificate with respect to the Transferred Inventory.

1.6          Allocation.  The consideration referred to in Section 1.3 shall be allocated among the Transferred Assets in accordance with a schedule (the “Allocation Schedule”) to be prepared by the Purchaser (and delivered to the Seller) within 30 days following the Closing Date (it being understood that such Allocation Schedule will be prepared in compliance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder).  The Seller shall have fifteen (15) days from its receipt of the Allocation Schedule to notify the Purchaser, in writing, of detailed explanations for any dispute.  If the Seller does not provide such notice to the Purchaser, the Seller shall be deemed to have accepted the Allocation Schedule as delivered by the Purchaser.  If the Seller does provide such notice, each of the Purchaser and the Seller shall negotiate in good faith to resolve the dispute.  If the Purchaser and the Seller are unable to resolve the dispute within 30 days following the Purchaser’s receipt of the Seller’s notice, the dispute shall be resolved by an independent accounting firm, who shall be jointly appointed by, and whose fees shall be jointly and equally paid by, the Purchaser and the Seller.  All parties shall prepare and file all applicable Tax returns, including Internal Revenue Service Form 8594, consistent with the finalized Allocation Schedule.  The Seller shall timely and properly prepare, execute, file and deliver all documents, forms and other information the Purchaser may reasonably request to prepare the Allocation Schedule.  Neither the Seller nor the Purchaser shall file (and shall not permit any of its Affiliates to file) any Tax Return or other document with, or make any statement or declaration to, any Governmental Body that is inconsistent with such allocation.

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

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1.7          Closing.  Subject to the satisfaction or waiver of the conditions set forth in Sections 4 and 5, the closing of the sale of the Transferred Assets pursuant to this Agreement (the “Closing”) shall take place at the offices of Purchaser upon the execution and delivery of this Agreement by the parties hereto.  For purposes of this Agreement, “Closing Date” shall mean the date on which the Closing actually takes place.

2.REPRESENTATIONS AND WARRANTIES OF THE SELLER.

The Seller represents and warrants, to and for the benefit of the Indemnitees, as follows:

2.1          Due Organization.  The Seller and each Affiliate of the Seller that owns any Transferred Assets or is otherwise involved in the AutoTrace Offering is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

2.2          Inventory.  The  Transferred Inventory is (and will as of the Closing be) of such quality and quantity as to be usable and saleable in the ordinary course of business and is free of any defect or deficiency, other than any such defect or deficiency that would not impair the value of the Transferred Inventory by more than $25,000.

2.3          Equipment; Fixed Assets.

All of the Transferred Equipment: (i) is (and will as of the Closing be) structurally sound, free of defects and deficiencies and in good condition and repair (ordinary wear and tear excepted); and (ii) is (and will as of the Closing be) adequate for the uses to which they are being put.

2.4          Financial Statements; Customers.

(a)           Part 2.4(a) of the Disclosure Schedule sets forth an unaudited statement of revenue and cost with respect to the Seller’s manufacture, marketing and selling of the AutoTrace Offering for the nine-month period ended September 30, 2008, which was prepared in accordance with the assumptions set forth therein.

(b)           Part 2.4(b) of the Disclosure Schedule provides an accurate and complete breakdown of the revenues received by the Seller and its Affiliates (based on revenues received by the Seller and its Affiliates related to the AutoTrace Offering) from the top 25 customers of the AutoTrace Offering in the fiscal year ended December 31, 2007 and from the top 19 customers of the AutoTrace Offering in the nine months ended September 30, 2008.  Since September 30, 2008, neither the Seller nor any Affiliate of the Seller has received any notice or other communication indicating that any customer of the AutoTrace Offering intends or expects to cease dealing (or reduce the volume of business below historical levels) with Seller with respect to the AutoTrace Offering or terminate any Seller Contract relating to the AutoTrace Offering.

(c)           The relationship between the Seller and each Affiliate of the Seller, on the one hand, and each sole source supplier and other material supplier to the AutoTrace Offering, on the other hand, is good, and no event has occurred or condition or circumstance exists that would (or could

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

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reasonably be expected to) (with or without notice or lapse of time) result in the deteriorating of such relationship or such supplier ceasing to do business with respect to the AutoTrace Offering.

2.5          Title to Transferred Assets.  Except as set forth on Part 2.5 of the Disclosure Schedule, the Seller (or the Affiliate of the Seller identified in Part 2.5 of the Disclosure Schedule) owns, and has good and valid title to, all of the Transferred Inventory and Transferred Equipment, free and clear of any Encumbrances.

2.6          Intellectual Property.

(a)           Part 2.6(a) of the Disclosure Schedule accurately identifies and describes:

(i)            in Part 2.6(a)(i) of the Disclosure Schedule: (A) each item of Registered IP in which the Seller or any Affiliate of the Seller has or purports to have an ownership interest of any nature (whether exclusively, jointly with another Person or otherwise); (B) the jurisdiction in which such item of Registered IP has been registered or filed and the applicable registration or serial number; and (C) any other Person that has an ownership interest in such item of Registered IP and the nature of such ownership interest;

(ii)           in Part 2.6(a)(ii) of the Disclosure Schedule: (A) all Intellectual Property Rights or Intellectual Property licensed to the Seller or any Affiliate of the Seller relating to the AutoTrace Offering (other than any non-customized software that: (1) is so licensed solely in executable or object code form pursuant to a nonexclusive, internal use software license; (2) is not incorporated into, or used directly in the development, manufacturing, distribution, installation or support of, any of the AutoTrace Offerings; and (3) is generally available on standard terms, for the same scope of use in which the Seller (or its applicable Affiliate) utilizes such software); (B) the corresponding Contract or Contracts pursuant to which such Intellectual Property Rights or Intellectual Property is licensed to the Seller or any Affiliate of the Seller; and (C) whether the license or licenses so granted to the Seller or any Affiliate of the Seller are exclusive or nonexclusive; and

(iii)         in Part 2.6(a)(iii) of the Disclosure Schedule: (A) each Contract pursuant to which any Person has been granted any exclusive license under, or otherwise has received or acquired any exclusive right (whether or not currently exercisable) or interest in, any Transferred IP or any other Seller IP; and (B) each other Contract pursuant to which any Person has been granted any other license under, or otherwise has received or acquired any other right (whether or not currently exercisable) or interest in, any Transferred IP or any other Seller IP.

(b)           [Intentionally left blank]

(c)           The Seller (or the Affiliate of the Seller identified in Part 2.6(c) of the Disclosure Schedule) exclusively owns all right, title and interest to and in the Seller IP (other than Intellectual Property Rights or Intellectual Property licensed to the Seller or a Affiliate of the Seller, as identified in Part 2.6(a)(ii) of the Disclosure Schedule) free and clear of any Encumbrances (other than licenses

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

6

granted pursuant to the Contracts listed in Part 2.6(a)(iii) of the Disclosure Schedule).  Without limiting the generality of the foregoing:

(i)            all documents and instruments necessary to perfect the rights of the Seller or any Affiliate of the Seller in the Seller IP have been validly executed, delivered and filed in a timely manner with the appropriate Governmental Body;

(ii)           each Person who is or was an employee or independent contractor of the Seller or any Affiliate of the Seller and who is or was involved in the creation or development of any Seller IP has signed a valid and enforceable agreement containing an irrevocable assignment of Intellectual Property Rights to the Seller or the applicable Affiliate of the Seller and confidentiality provisions protecting the Seller IP;

(iii)         no Seller Employee has any claim, right (whether or not currently exercisable) or interest to or in any Seller IP;

(iv)          no funding, facilities or personnel of any Governmental Body were used, directly or indirectly, to develop or create, in whole or in part, any Seller IP;

(v)            to the Knowledge of Seller, no employee or independent contractor of the Seller or any Affiliate of the Seller (or any of their predecessors) is: (A) bound by or otherwise subject to any Contract restricting him or her from performing his or her duties for Seller or its applicable Subsidiary; or (B) in breach of any Contract with any former employer or other Person concerning Intellectual Property Rights or confidentiality as a result of his or her employment, duties, or activities with or for Seller or its applicable Subsidiary (or any of their predecessors);

(vi)          the Seller and each Affiliate of the Seller has taken all reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in their proprietary information held by the Seller or any Affiliate of the Seller, or purported to be held by the Seller or any Affiliate of the Seller, as a trade secret relating to the AutoTrace Offering; and

(vii)         neither the Seller nor any Affiliate of the Seller is now or has ever been a member or promoter of, or a contributor to, any industry standards body or similar organization that could require or obligate the Seller to grant or offer to any other Person any license or right to any Seller IP.

(d)           All Seller IP is valid, subsisting and enforceable.  Without limiting the generality of the foregoing:

(i)            No trademark or trade name relating to the AutoTrace Offering owned, used, or applied for by the Seller (or any Affiliate of the Seller) conflicts or interferes with any trademark or trade name owned, used or applied for by any other Person, and no event or circumstance has occurred or exists that has resulted in, or could reasonably be expected to result in, the abandonment of any trademark (whether registered or unregistered) relating to the AutoTrace Offering owned, used or applied for by the Seller (or any Affiliate of the Seller); and

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

7

(ii)           each item of Seller IP that is Registered IP is and at all times has been in compliance with all Legal Requirements, and all filings, payments and other actions required to be made or taken to maintain such item of Seller IP in full force and effect have been made by the applicable deadline.

(e)           The Transferred IP constitutes all of the Intellectual Property Rights necessary:  (i) to develop, manufacture, market, distribute, sell, support and use the AutoTrace Offerings; and (ii) to enable the Purchaser to manufacture, market and sell the AutoTrace Offering in the manner in which Seller has manufactured, marketed and sold the AutoTrace Offering prior to the date of this Agreement.

(f)            Neither the execution, delivery or performance of any of the Transactional Agreements nor the consummation of any of the Transactions will, with or without notice or the lapse of time, result in or give any other Person the right or option to cause or declare: (i) a loss of, or Encumbrance on, any Seller IP; (ii) a breach of any Contract listed or required to be listed in Part 2.6(a)(ii) of the Disclosure Schedule; (iii) the release, disclosure or delivery of any Seller IP by or to any escrow agent or other Person; or (iv) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Seller IP.

(g)           To the Knowledge of the Seller, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating or otherwise violating, any Seller IP. Part 2.6(g) of the Disclosure Schedule accurately identifies (and the Seller has provided to the Purchaser a complete and accurate copy of) each letter or other written or electronic communication or correspondence that has been sent or otherwise delivered by or to the Seller or any Affiliate of the Seller or any Representative of the Seller or any Affiliate of the Seller regarding any actual, alleged or suspected infringement or misappropriation of any Seller IP and provides a brief description of the current status of the matter referred to in such letter, communication or correspondence.

(h)           None of the Seller IP infringes or conflicts with, nor has any Seller IP ever infringed or conflicted with any Intellectual Property Right of any other Person. Without limiting the generality of the foregoing:

(i)            no AutoTrace Offering has ever infringed, misappropriated or otherwise violated any patents, patent applications or Intellectual Property Right of any other Person;

(ii)           no infringement, misappropriation or similar claim or Proceeding relating to the AutoTrace Offering is pending or has been threatened against the Seller or any Affiliate of the Seller or against any other Person who may be entitled to be indemnified, defended, held harmless or reimbursed by the Seller or any Affiliate of the Seller with respect to such claim or Proceeding;

(iii)         neither the Seller nor any Affiliate of the Seller has ever received any notice or other communication relating to any actual, alleged or suspected infringement, misappropriation or violation of any patents, patent applications or Intellectual Property Right of another Person that relates to the AutoTrace Offering; and

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

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(iv)          no claim or Proceeding involving any patents, patent applications or Intellectual Property or Intellectual Property Right licensed to the Seller or any Affiliate of the Seller relating to the AutoTrace Offering is pending or, to the Knowledge of the Seller, has been threatened, except for any such claim or Proceeding that, if adversely determined, would not adversely affect: (A) the use or exploitation of such Intellectual Property or Intellectual Property Right by the Seller, any Affiliate of the Seller or the Purchaser; or (B) the manufacturing, distribution or sale of any AutoTrace Offering by the Seller, any Affiliate of the Seller or the Purchaser.

(i)            The source code provided to Purchaser pursuant to Section 1.1(d) is adequately documented so that a programmer ordinarily skilled in the art can compile it into the object code versions required for any AutoTrace Offering.

2.7          Contracts.

(a)           Part 2.7(a) of the Disclosure Schedule identifies each Seller Contract relating to the AutoTrace Offering or the Transferred Assets (i) with any distributor who has rights to purchase or otherwise distribute any AutoTrace Offering; (ii) with any supplier of components used for the manufacture of the AutoTrace Offering, (iii) creating any partnership, joint venture or similar Contract with respect to the AutoTrace Offering; and (iv) which involves the acquisition, transfer, use, development, sharing or license of any Intellectual Property or Intellectual Property Right.  The Seller has delivered to the Purchaser accurate and complete copies of all Seller Contracts that constitute Transferred Assets and all other Contracts identified in Part 2.7(a) of the Disclosure Schedule. Neither the Seller nor any Affiliate of the Seller has any obligation or Liability with respect to any Seller Contract that constitutes a Transferred Asset  except as specifically set forth in such Seller Contract.

(b)           With respect to each of the Seller Contracts related to the AutoTrace Offering: (i) neither the Seller nor any Affiliate of the Seller has (and, to the Knowledge of the Seller, no other Person has) violated or breached, or declared or committed any material default under, any such Contract; (ii) no event has occurred, and no circumstance or condition exists, that might (with or without notice or lapse of time) result in a material violation, breach or default by the Seller or any Affiliate of the Seller (or, to the Knowledge of the Seller, by any other Person) of or under any of the provisions of any such Contract;  (iii) neither the Seller nor any Affiliate of the Seller has received any notice or other communication regarding any actual or alleged violation or breach of, or default under, any such Contract; and (iv) neither the Seller nor any Affiliate of the Seller has waived any right under any such Contract.

(c)           No Person is renegotiating, or has the right to renegotiate, any amount paid or payable to the Seller or any Affiliate of the Seller under any Seller Contract related to the AutoTrace Offering or any other term or provision of any such Seller Contract.

(d)           All services performed by the Seller or any Affiliate of the Seller, and all parts and other products sold or otherwise made available by the Seller or any Affiliate of the Seller, in each case in connection with the AutoTrace Offering, have been performed, sold and made available in material compliance with all warranties and other applicable requirements of all Contracts relating to such services, parts or products.  There are no pending or, to the Knowledge of the Seller, threatened claims

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

9

against the Seller or any Affiliate of the Seller relating to the performance by the Seller or any Affiliate of the Seller of any services or the sale of any part or other product, and, to the Knowledge of the Seller, there is no basis for any such claim.

(e)           The Seller does not have any Knowledge of any basis upon which any party to any Seller Contract related to the AutoTrace Offering may object to: (i) the assignment to the Purchaser of any right under such Seller Contract; or (ii) the delegation to or performance by the Purchaser of any obligation under such Seller Contract.

2.8          Compliance with Legal Requirements.  Except as set forth in Part 2.8 of the Disclosure Schedule, as related to the AutoTrace Offering: (a) the Seller and each Affiliate of the Seller is in material compliance with each Legal Requirement that is applicable to it or to the conduct of its business or the ownership or use of any of its assets; (b) the Seller and each Affiliate of the Seller has at all times been in material compliance with each Legal Requirement that is or was applicable to it or to the conduct of its business or the ownership or use of any of its assets; (c) no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) constitute or result in a violation by the Seller or any Affiliate of the Seller of, or a failure on the part of the Seller or any Affiliate of the Seller to comply with, any Legal Requirement; and (d) neither the Seller nor any Affiliate of the Seller has received, at any time, any notice or other communication from any Governmental Body or any other Person regarding any actual or alleged violation of, or failure to comply with, any Legal Requirement. Without limiting the generality of the foregoing, each of the services performed by the Seller or any Affiliate of the Seller in connection with the AutoTrace Offering: (i) complies (and at all times complied) in all material respects with all applicable Legal Requirements relating to product safety and other applicable Legal Requirements; and (ii) has been certified by any appropriate Governmental Bodies.

2.9          Governmental Authorizations.  Part 2.9 of the Disclosure Schedule identifies, as related to the AutoTrace Offering: (a) each Governmental Authorization that is held by the Seller or any Affiliate of the Seller that is material to the manufacture, marketing or sale of the AutoTrace Offering; and (b) each other Governmental Authorization that, to the Knowledge of the Seller, is held by any employee of the Seller or any Affiliate of the Seller and relates to or is useful in connection with the AutoTrace Offering.  The Seller has delivered to the Purchaser accurate and complete copies of all of the Governmental Authorizations identified in Part 2.9 of the Disclosure Schedule, including all renewals thereof and all amendments thereto.  Each Governmental Authorization identified or required to be identified in Part 2.9 of the Disclosure Schedule is valid and in full force and effect.

2.10        Proceedings; Orders.  There is no pending Proceeding against or involving the Seller or any Affiliate of the Seller, and, to the Knowledge of the Seller, no Person has threatened to commence any Proceeding against or involving the Seller or any Affiliate of the Seller: (a) that involves the AutoTrace Offering or that otherwise relates to or might affect the AutoTrace Offering or any of the Transferred Assets; or (b) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions. There is no Order relating to the AutoTrace Offering, or to which any of the Transferred Assets is subject.  To the Knowledge of the Seller, there is no proposed Order that, if issued or otherwise put into effect: (i) may have an adverse effect on the ability of Seller to manufacture, market or sell the AutoTrace Offering or on the ability of the Seller or any Affiliate of the Seller to comply with or perform any covenant or obligation under any of the Transactional

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

10

Agreements; or (ii) may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Transactions.

2.11        Employee and Labor Matters.

(a)           To the Knowledge of the Seller no AutoTrace Employee intends to terminate his employment prior to January 31, 2009.

(b)           There has never been any slowdown, work stoppage, labor dispute or union organizing activity, or any similar activity or dispute, affecting any of the AutoTrace Employees, and no Person has threatened to commence any such slowdown, work stoppage, labor dispute or union organizing activity or any similar activity or dispute on or before January 31, 2009.

2.12        Tax Matters.  All of the Tax Returns required to be filed by the Seller or any Affiliate of the Seller prior to the date hereof that relate in whole or in part to the AutoTrace Offering or the Transferred Assets have been filed and all such Tax Returns are true, complete and correct.  All Taxes required to be paid by the Seller or a Affiliate of the Seller prior to the date hereof that relate in whole or in part to the AutoTrace Offering or the Transferred Assets have been paid in full.  No statute of limitations has been extended or waived by any Tax authority with respect to any Taxes or Tax Returns referred to in the two preceding sentences.  There are no outstanding Tax liens that have been filed by any Tax authority against any of the Transferred Assets and no claims are being asserted with respect to any Taxes related to any of the Transferred Assets, and to the Knowledge of the Seller, there is no basis for any such claims.  There is no dispute or claim concerning any liability for Taxes of the Seller or any Affiliate of the Seller relating to the AutoTrace Offering or the Transferred Assets, and to the Knowledge of the Seller, there is no basis for any such claim.

2.13        Authority; Binding Nature of Agreements.  The Seller and each of its Affiliates has the absolute and unrestricted right, power and authority to enter into and to perform its obligations under each of the Transactional Agreements to which it is or may become a party; and the execution, delivery and performance by the Seller and each of its Affiliates of the Transactional Agreements to which it is or may become a party have been duly authorized by all necessary action on the part of the Seller (or such Subsidiary) and its board of directors.  Neither the Seller nor any Affiliate of the Seller is required to obtain the approval of its stockholders in connection with the execution, delivery and performance of any of the Transactional Agreements.  This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to:  (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (b) general principles of equity.  Upon the execution by the Seller or any Affiliate of the Seller of each other Transactional Agreement to which the Seller or any Affiliate of the Seller is a party, such Transactional Agreement will constitute the legal, valid and binding obligation of the Seller or such Subsidiary, as the case may be, and will be enforceable against the Seller or such Subsidiary, as the case may be, in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) general principles of equity.

2.14        Non-Contravention; Consents.  Neither the execution and delivery by the Seller or any Affiliate of the Seller of any of the Transactional Agreements, nor the consummation or performance by

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

11

the Seller or any Affiliate of the Seller of any of the Transactions, will (with or without notice or lapse of time):

(a)           contravene, conflict with or result in a violation of: (i) any of the provisions of the certificate of incorporation, bylaws or similar documents of the Seller or any Affiliate of the Seller; or (ii) any resolution adopted by the stockholders, board of directors or any committee of the board of directors of the Seller or any Affiliate of the Seller;

(b)           contravene, conflict with or result in a violation of any Legal Requirement or any Order to which the Seller or any Affiliate of the Seller, or any of the Transferred Assets, is subject;

(c)           result in the imposition or creation of any Encumbrance upon or with respect to any Transferred Asset; or

(d)           contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Contract to which the Seller or any Affiliate of the Seller is a party or by which the Seller or any Affiliate of the Seller, or any of the Transferred Assets, are bound.

Except as set forth in Part 2.14 of the Disclosure Schedule, neither the Seller nor any Affiliate of the Seller is or will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with the execution and delivery by the Seller or any Affiliate of the Seller of any of the Transactional Agreements or the consummation or performance by the Seller or any Affiliate of the Seller of any of the Transactions.

2.15        Sufficiency of Transferred Assets.  Except as set forth in Part 2.15 of the Disclosure Schedule, the Transferred Assets will collectively constitute, as of the Closing Date, all of the properties, rights, interests and other tangible and intangible assets necessary to enable the Purchaser to manufacture, market, sell and service (including for warranty purposes) the AutoTrace Offering in the manner in which the AutoTrace Offering has been manufactured, marketed, sold and serviced by Seller prior to the date of this Agreement.

2.16        Full Disclosure.  Neither this Agreement nor the Disclosure Schedule contains or will contain any untrue statement of fact; and neither this Agreement nor the Disclosure Schedule omits or will omit to state any fact necessary to make any of the representations, warranties or other statements or information contained therein not misleading.  All of the information set forth in the Disclosure Schedule is accurate and complete in all material respects.

2.17        Supply Chain. Other than the 8749 microprocessor, Seller has not made any last time buys on any parts in its supply chain related to or used by the Seller in the manufacture of the AutoTrace Product. To the Knowledge of the Seller, there are no obsolescence issues related to the supply chain that would affect Purchaser’s ability to purchase parts for the next nine months necessary for Purchaser to manufacture the AutoTrace Product.

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

12

3.REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

The Purchaser represents and warrants, to and for the benefit of the Seller, as follows:

3.1          Due Organization.  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

3.2          Authority.  The Purchaser has the absolute and unrestricted right, power and authority to enter into and to perform its obligations under each Transactional Agreement to which it is or may become a party, and the execution and delivery by the Purchaser of each Transactional Agreement to which the Purchaser is or may become a party have been duly authorized by all necessary action on the part of the Purchaser.

3.3          Binding Nature of Agreements.  This Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to:  (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (b) general principles of equity. Upon the execution by the Purchaser of each other Transactional Agreement to which the Purchaser is a party, such Transactional Agreement will constitute the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to:  (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) general principles of equity.

3.4          Non-Contravention; Consents.  Neither the execution and delivery by the Purchaser of any of the Transactional Agreements, nor the consummation or performance by the Purchaser of any of the Transactions, will (with or without notice or lapse of time):

(a)           contravene, conflict with or result in a violation of:  (i) any of the provisions of the certificate of incorporation or bylaws of the Purchaser; or (ii) any resolution adopted by the stockholders, board of directors or any committee of the board of directors of the Purchaser;

(b)           contravene, conflict with or result in a violation of any Legal Requirement or any Order to which the Purchaser is subject; or

(c)           contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Contract to which the Purchaser is a party or by which the Purchaser is bound.

The Purchaser is not and will not be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with the execution and delivery by the Purchaser of any of the Transactional Agreements or the consummation or performance by the Purchaser of any of the Transactions.

3.5          Financing.  The Purchaser has, and will have as of the Closing, sufficient funds available to consummate the transactions contemplated by, and perform its obligations under, the Transactional Documents.

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

13

4.CONDITIONS PRECEDENT TO THE PURCHASER’S OBLIGATION TO CLOSE.

The Purchaser’s obligation to purchase the Transferred Assets and to take the other actions required to be taken by the Purchaser at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by the Purchaser, in whole or in part, in writing):

4.1          Consents.  All Consents: (a) required to be obtained from any Governmental Body in connection with the Transactions; or (b) identified in Schedule 4.1, shall have been obtained and shall be in full force and effect.  Any waiting period under any applicable antitrust law or regulation or other Legal Requirement shall have expired or been terminated.

4.2          Documents.  The Purchaser shall have received the following documents, each of which shall be in full force and effect:

(a)           a Transition Services Agreement, in substantially the form of Exhibit C (the “Transition Services Agreement”), duly executed by the parties thereto (other than the Purchaser);

(b)           such bills of sale, endorsements, assignments, business transfer agreements and other documents as the Purchaser may in good faith determine to be necessary or appropriate to assign, convey, transfer and deliver to the Purchaser or an Affiliate of the Purchaser good and valid title to the Transferred Assets free and clear of any Encumbrances;

(c)           such other documents as the Purchaser may request in good faith for the purpose of evidencing the satisfaction of any condition set forth in this Section 4 or otherwise facilitating the consummation or performance of any of the Transactions, and

(d)           the Seller Contracts on Schedule 1.1(e) shall be have been assigned or consent to such assignment shall have been provided to Purchaser.

(e)           the Seller shall have provided Purchaser with access to the documents on Schedule 4.2.

4.3          Termination of Contracts.  The Seller shall have provided the Purchaser with evidence satisfactory to the Purchaser as to the termination, with respect to the AutoTrace Offering, of the Contracts identified on Schedule 4.3.

5.CONDITIONS PRECEDENT  TO THE SELLER’S OBLIGATION TO CLOSE.

The Seller’s obligation to sell the Transferred Assets and to take the other actions required to be taken by the Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

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

14

5.1          Consents.  All Consents: (a) required to be obtained from any Governmental Body in connection with the Transactions; or (b) identified in Schedule 4.1, shall have been obtained and shall be in full force and effect.  Any waiting period under any applicable antitrust law or regulation or other Legal Requirement shall have expired or been terminated.

5.2          Documents.  The Seller shall have received the following documents, each of which shall be in full force and effect:

(a)           the Transition Services Agreement, in substantially the form of Exhibit C duly executed by the parties thereto (other than the Seller);

(b)           such bills of sale, endorsements, assignments, business transfer agreements and other documents as the Purchaser may in good faith determine to be necessary or appropriate to assign, convey, transfer and deliver to the Purchaser or an Affiliate of the Purchaser good and valid title to the Transferred Assets free and clear of any Encumbrances; and

(c)           such other documents as the Seller may request in good faith for the purpose of evidencing the satisfaction of any condition set forth in this Section 5 or otherwise facilitating the consummation or performance of any of the Transactions.

6.INDEMNIFICATION, ETC.

6.1          Survival of Representations.

(a)           Subject to Section 6.1(c), the representations and warranties of each party to this Agreement shall survive the Closing and the sale of the Transferred Assets to the Purchaser.

(b)           The representations, warranties, covenants and obligations of the Seller, and the rights and remedies that may be exercised by the Indemnitees, shall not be limited or otherwise affected by or as a result of any information furnished to, or any investigation made by or any knowledge of, any of the Indemnitees or any of their Representatives.

(c)           Subject to Section 6.1(d), the representations and warranties set forth in Section 2 and 3 shall expire on the first anniversary of the Closing Date; provided, however, that if a Claim Notice (as defined below) relating to any representation or warranty set forth in Section 2 is given to the Seller on or prior to the first anniversary of the Closing Date, then, notwithstanding anything to the contrary contained in this Section 6.1(c), such representation or warranty shall not so expire, but rather shall remain in full force and effect until such time as each and every claim (including any indemnification claim asserted by any Indemnitee under Section 6.2) that is based upon, or that relates to, any breach or alleged breach of such representation or warranty has been fully and finally resolved.  The representations and warranties set forth in Section 3 shall expire on the one year anniversary of the Closing Date.

(d)           The limitations set forth in Section 6.1(c) shall not apply in the case of intentional misrepresentation or fraud.

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

15

(e)           For purposes of this Agreement, a “Claim Notice” relating to a particular representation or warranty shall be deemed to have been given if any Indemnitee, acting in good faith, delivers to the Seller a written notice stating that such Indemnitee believes that there is or has been a possible breach of such representation or warranty and containing: (i) a brief description of the circumstances supporting such Indemnitee’s belief that there is or has been such a possible breach; and (ii) a non-binding, preliminary estimate of the aggregate dollar amount of the actual and potential Damages that have arisen and may arise as a result of such possible breach.

6.2          Indemnification by the Seller.

(a)           The Seller shall hold harmless and indemnify each of the Indemnitees from and against, and shall compensate and reimburse each of the Indemnitees for, any Damages that are suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any third-party claim) and that arise from or as a result of, or are connected with:

(i)            any inaccuracy in or breach of any of the representations or warranties made by the Seller in this Agreement as if such representation and warranty was made as of the Closing Date;

(ii)           any breach of any covenant or obligation of the Seller contained in this Agreement;

(iii)         any Liability of the Seller or any Subsidiary of Seller (and any Claim against any Indemnitee relating to any such Liability or otherwise relating to any circumstance, condition or event that existed or occurred prior to the Closing with respect to the AutoTrace Offering), other than the Assumed Liabilities;

(iv)          without limiting the generality of Section 6.2(a)(iii), any failure to comply with any Legal Requirements relating to notification to or consultation with any AutoTrace Employees in connection with the Transactions and any Liability with respect to the termination of employment of any of the AutoTrace Employees;

(v)            any Liability to which the Purchaser or any of the other Indemnitees may become subject and that arises from or relates to any failure to comply with any bulk transfer law or similar Legal Requirement in connection with any of the Transactions;

(vi)          any Proceeding relating to any breach, alleged breach, Liability or matter of the type referred to in clause “(i),” “(ii),” “(iii),” “(iv),”or “(v),” above (including any Proceeding commenced by any Indemnitee for the purpose of enforcing any of its rights under this Section 6).

(b)           Subject to Section 6.2(d), the Seller shall not be required to make any indemnification payment pursuant to Section 6.2(a)(i) for any breach of the representations and warranties made by it in this Agreement until such time as the total amount of all Damages (including the Damages

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

16

arising from such breach and all other Damages arising from any other breaches of any representations or warranties) that have been suffered or incurred by any one or more of the Indemnitees, or to which any one or more of the Indemnitees has or have otherwise become subject, exceeds $[***].  If the total amount of such Damages exceeds $[***], the Indemnitees shall be entitled to be indemnified against and compensated and reimbursed for the entire amount of such Damages, and not merely the portion of such Damages exceeding $[***].

(c)           Subject to Section 6.2(d), the Seller’s indemnification obligations pursuant to Section 6.2(a)(i) for any breach of the representations and warranties made by Seller in this Agreement to make indemnification payments to the Purchaser shall not exceed an amount equal to $[***] (the “Seller’s Indemnification Cap”).  The Seller’s Indemnification Cap limitation shall not apply to any Damages relating to a misrepresentation or breach of any of the representations and warranties contained in Sections 2.5, 2.12 and 2.13.

(d)           The limitation on the obligations of the Seller that is set forth in Sections 6.2(b) and 6.2(c) shall not apply in the case of intentional misrepresentation or fraud.  For the avoidance of doubt and without expanding the limitations contained in Section 6.2(b), it is hereby clarified that the limitations that are set forth in Sections 6.2(b) and 6.2(c) shall not apply in the case of: (i) breaches of covenants or obligations; (ii) any matter referred to in Section 6.2(a)(iii), 6.2(a)(iv), or 6.2(a)(v); or (iii) any Proceeding of the type referred to in Section 6.2(a)(vi) (to the extent that such Legal Proceeding relates to any of the matters referred to in clauses “(i)” or “(ii)” of this sentence).

6.3          Defense of Third Party Claims.  In the event of the assertion or commencement by any Person of any Proceeding (whether against the Purchaser or against any other Person) with respect to which any Indemnitee may be entitled to indemnification, compensation or reimbursement pursuant to this Section 6, the Purchaser shall have the right, at its election, to proceed with the defense (including settlement or compromise) of such Proceeding on its own; provided, however, that if the Purchaser settles or compromises any such Proceeding without the consent of the Seller, such settlement or compromise shall not be conclusive evidence of the amount of Damages incurred by the Indemnitee in connection with such Proceeding (it being understood that if the Purchaser requests that the Seller’s consent to a settlement or compromise, the Seller shall act reasonably in determining whether to provide such consent). The Purchaser shall give the Seller prompt notice after it becomes aware of the commencement of any such Proceeding against the Purchaser; provided, however, any failure on the part of the Purchaser to so notify the Seller shall not limit any of the obligations of the Seller, or any of the rights of any Indemnitee, under this Section 6 (except to the extent such failure materially prejudices the defense of such Proceeding).  If the Purchaser does not elect to proceed with the defense of any such Proceeding, the Seller may proceed with the defense of such Proceeding with counsel reasonably satisfactory to the Purchaser; provided, however, that the Seller may not settle or compromise any such Proceeding in any manner that has an ongoing impact on the AutoTrace Offering without the prior written consent of the Purchaser (which consent may not be unreasonably withheld).

7.EMPLOYEE MATTERS.

7.1          Responsibility for Employment Liabilities and Claims.  The Seller (or the applicable Affiliate of the Seller) shall be fully responsible for any and all Liabilities and Claims arising out of or

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

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relating to: (a) the employment or termination of employment by the Seller, any Affiliate of the Seller or any ERISA Affiliate of any Seller Employee, and (b) each plan, program, policy, practice or Contract, providing for employment, compensation, deferred compensation, retirement benefits, severance, relocation, repatriation, expatriation, termination pay, performance awards, equity or equity-related awards (whether payable in stock, cash or other property), fringe benefits or other benefits, including each “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) which is or has been maintained, contributed to, or required to be contributed to by the Seller or any affiliate within the meaning of Section 414(b), (c), (m), or (o) of the Code and the regulations thereunder (“ERISA Affiliate”) for the benefit of any current or former AutoTrace Employees (the Liabilities referred to in clauses “(a)” and “(b)” of this sentence being referred to collectively as the “Retained Employment Liabilities”).  Retained Employment Liabilities also shall include any Liabilities and Claims relating to change in control agreements, accrued bonuses, stock options and other equity-based awards (whether payable in stock, cash or other property), sale bonuses and other retention arrangements established by the Seller, any Affiliate of the Seller or any ERISA Affiliate regardless of whether such Liabilities and Claims arise before, on or after the Closing Date.

7.2          WARN Act Compliance.  The Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) that are binding upon the Seller.

8.MISCELLANEOUS PROVISIONS.

8.1          Further Actions.

(a)           From and after the Closing Date, the Seller shall cooperate (and shall cause its Affiliates to cooperate) with the Purchaser and the Purchaser’s Representatives, and shall cause to be executed and delivered such documents and cause such other actions to be taken as the Purchaser may reasonably request, for the purpose of evidencing the Transactions and putting the Purchaser in possession and control of all of the Transferred Assets. To the extent that the parties hereto have been unable to obtain any Consent that the Purchaser reasonably deems necessary to be obtained for the transfer to the Purchaser of any of the Transferred Assets by the Closing Date, the Seller shall use its reasonable efforts to obtain such Consent as promptly as practicable thereafter. Until such Consent is obtained, the Seller shall cooperate (and shall cause its Affiliates to cooperate), and shall use its reasonable efforts to cause its (and its Affiliates’) Representatives to cooperate, with the Purchaser in any lawful arrangement designed to provide the Purchaser with the benefits of such Transferred Assets at no cost to the Purchaser in excess of the cost the Purchaser would have incurred (without modification to the terms of the Contract) if the Consent had been obtained.

(b)           After the Closing, if the Seller or any Affiliate of the Seller receives any payment, refund or other amount that is a Transferred Asset or is otherwise properly due and owing to the Purchaser, the Seller shall promptly remit or shall cause to be remitted, such amount to the Purchaser.

(c)           The Seller hereby irrevocably nominates, constitutes and appoints the Purchaser as the true and lawful attorney-in-fact of the Seller (with full power of substitution) effective as of the Closing Date, and hereby authorizes the Purchaser, in the name of and on behalf of the Seller, to execute,

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

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deliver, acknowledge, certify, file and record any document, to institute and prosecute any Proceeding and to take any other action (on or at any time after the Closing Date) that the Purchaser may deem appropriate for the purpose of: (i) collecting, asserting, enforcing or perfecting any claim, right or interest of any kind that is included in or relates to any of the Transferred Assets; (ii) defending or compromising any claim or Proceeding relating to any of the Transferred Assets; or (iii) otherwise carrying out or facilitating any of the Transactions.  The power of attorney referred to in the preceding sentence is and shall be coupled with an interest and shall be irrevocable, and shall survive the dissolution or insolvency of the Seller.

8.2          Continuing Access to Information.  After the Closing Date, the Purchaser shall give the Seller and its Representatives reasonable access during normal business hours to (and shall allow the Seller and its Representatives to make copies of) any accounting books and records and other financial data acquired by the Purchaser hereunder as may be necessary for: (a) preparation of tax returns and financial statements which are the responsibility of the Seller; (b) management and handling of any tax audits and tax disputes; and (c) complying with any audit request, subpoena or other investigative demand by any Governmental Body or for any civil litigation, or for any other reasonable purpose.  After the Closing Date, the Seller shall give (and shall cause its Affiliates to give) the Purchaser and its Representatives reasonable access during normal business hours to (and shall allow the Purchaser and its Representatives to make copies of) any books and records relating to the Transferred Assets.  Following the Closing, the Seller shall make its Representatives (and the Representatives of its Affiliates) available to the Purchaser at reasonable times to answer questions related to the Transferred Assets and the AutoTrace Offering.

8.3          Publicity.  The Seller shall ensure that, on and at all times after the date of this Agreement: (a) no press release or other publicity concerning any of the Transactions is issued or otherwise disseminated (and no other disclosure regarding any of the Transactions is made to any supplier, customer, employee or other Person) by or on behalf of the Seller or any Affiliate of the Seller without the Purchaser’s prior written consent, which shall not be unreasonably withheld or delayed; provided, however, that (i) Purchaser acknowledges that Seller may disclose the existence and terms of this Agreement, and file a copy of this Agreement with the Securities and Exchange Commission, in order for Seller to comply with applicable securities law disclosure requirements; and (ii) neither the Seller nor any Affiliate of the Seller shall be required to obtain the consent of the Purchaser with respect to any disclosure relating to the Transactions if (and only to the extent that) such disclosure is not more expansive than or inconsistent with prior public disclosures made by the Seller or any Affiliate of the Seller in accordance with this Section 8.3 or made by the Purchaser; and (b) the Seller (and each of its Affiliates) keeps strictly confidential, and the Seller (and each of its Affiliates) does not use or disclose to any other Person, any non-public document or other information that relates to the AutoTrace Offering.

8.4          Noncompetition.

(a)           During the two-year period commencing on the Closing Date, the Seller shall not (and the Seller shall use all commercially reasonable efforts to ensure that its Affiliates do not): (a) directly or indirectly, personally or through others, interfere or attempt to interfere with the relationship of the Purchaser or any Subsidiary or other Affiliate of the Purchaser with any Person that is (or that is expected to become) a customer of the AutoTrace Offering on or prior to the Closing Date; (b) engage

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

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directly or indirectly in Competition anywhere in the world; or (c) directly or indirectly be or become an officer, director, stockholder, owner, co-owner, Affiliate, partner, promoter, employee, agent, representative, designer, consultant, advisor, manager, licensor, sublicensor, licensee or sublicensee of, for or to, or otherwise be or become associated with, any Person that engages directly or indirectly in Competition anywhere in the world, provided, however, that the Seller and its Affiliates may, without violating this Section 8.4, own, as a passive investment, shares of capital stock of a publicly-held corporation that engages in Competition if: (i) such shares are actively traded on an established national securities market in the United States; (ii) the number of shares of such corporation’s capital stock that are owned beneficially (directly or indirectly) by the Seller and the number of shares of such corporation’s capital stock that are owned beneficially (directly or indirectly) by the Seller’s Affiliates collectively represent less than one percent of the total number of shares of such corporation’s capital stock outstanding; and (iii) neither the Seller nor any Affiliate of the Seller is otherwise associated directly or indirectly with such corporation or with any Affiliate of such corporation.

(b)           For purposes of this Section 8.4: a Person shall be deemed to be engaged in “Competition” if such Person or any of such Person’s Affiliates is engaged directly or indirectly in: (A) providing, performing, offering, designing, developing, manufacturing, assembling, promoting, selling, supplying, distributing, reselling, installing, supporting, leasing or subleasing any AutoTrace Offering; or (B) any other business or activity that competes in any respect (other than an immaterial respect) with any aspect of the AutoTrace Offering.  Notwithstanding anything in this Section 8.4 to the contrary, activities in accordance with the terms of the Transition Services Agreement shall not be deemed to be Competition or to otherwise violate the terms of this Section 8.4.

8.5          Fees and Expenses.

(a)           The Seller shall bear and pay all fees, costs and expenses that have been incurred or that are in the future incurred by, on behalf of or for the benefit of, the Seller or any Affiliate of the Seller in connection with: (i) the negotiation, preparation and review of any term sheet or similar document relating to any of the Transactions; (ii) the negotiation, preparation and review of this Agreement (including the Disclosure Schedule), the other Transactional Agreements and all bills of sale, assignments, certificates, opinions and other instruments and documents delivered or to be delivered in connection with the Transactions; (iii) the preparation and submission of any filing or notice required to be made or given in connection with any of the Transactions, and the obtaining of any Consent required to be obtained in connection with any of the Transactions; and (iv) the consummation and performance of the Transactions.

(b)           Subject to the provisions of Section 6 (including the indemnification and other obligations of the Seller thereunder), the Purchaser shall bear and pay all fees, costs and expenses that have been incurred or that are in the future incurred by, or on behalf or for the benefit of, the Purchaser in connection with: (i) the negotiation, preparation and review of any term sheet or similar document relating to any of the Transactions; (ii) the negotiation, preparation and review of this Agreement, the other Transactional Agreements and all bills of sale, assignments, certificates, opinions and other instruments and documents delivered or to be delivered in connection with the Transactions; and (iii) the consummation and performance of the Transactions.

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

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8.6          Notices.  Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received: (a) when delivered by hand; (b) the first business day after sent by registered mail, by overnight courier or by express delivery service; (c) if sent by facsimile transmission before 5:00 p.m. in California, when transmitted and receipt is confirmed; (d) if sent by facsimile transmission after 5:00 p.m. in California and receipt is confirmed, on the following business day, in any case to the address or facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice given to the other parties hereto):

if to the Seller:

Caliper Life Sciences, Inc.

850 Marina Village Parkway

Alameda, CA 94501-1038

Attention: Stephen Creager

Facsimile: (510) 291-6136

if to the Purchaser:

Dionex Corporation

1228 Titan Way

Sunnyvale, CA 94085

Attention: Gina Christopher

Facsimile: (408) 481-4104

8.7          Headings.  The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

8.8          Counterparts and Exchanges by Electronic Transmission or Facsimile.  This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission or facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.

8.9          Governing Law; Venue.

(a)           This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State of California (without giving effect to principles of conflicts of laws).

(b)           Except as otherwise provided in this Agreement, or in Section 8.9(c), any Proceeding relating to this Agreement or the enforcement of any provision of this Agreement shall be

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

21

brought or otherwise commenced in any state or federal court located in the County of Santa Clara, California.  Each party to this Agreement:

(i)            expressly and irrevocably consents and submits to the jurisdiction of each state and federal court located in the County of Santa Clara, California (and each appellate court located in the State of California) in connection with any such Proceeding;

(ii)           agrees that each state and federal court located in the County of Santa Clara, California shall be deemed to be a convenient forum; and

(iii)         agrees not to assert (by way of motion, as a defense or otherwise), in any such Proceeding commenced in any state or federal court located in the County of Santa Clara, California, any claim that such party is not subject personally to the jurisdiction of such court, that such Proceeding has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter of this Agreement may not be enforced in or by such court.

(c)           Notwithstanding anything to the contrary contained in this Agreement, any claim for indemnification, compensation or reimbursement pursuant to Section 6 and any claim for a monetary remedy (such as in the case of a claim based on fraud) relating to this Agreement or the Transactions after the Closing shall be brought and resolved exclusively in accordance with Schedule 6.10(c); provided, however, that nothing in this Section 8.9(c) shall prevent the Seller or the Purchaser from seeking preliminary injunctive relief from a court of competent jurisdiction.

(d)           Nothing in this Section 8.9 shall be deemed to limit or otherwise affect the right of any Indemnitee to commence any Proceeding against the Seller in any forum or jurisdiction.

8.10        Successors and Assigns; Parties in Interest.

(a)           This Agreement shall be binding upon:  the Seller and its successors and assigns (if any); and the Purchaser and its successors and assigns (if any).  This Agreement shall inure to the benefit of: the Seller; the Purchaser; the other Indemnitees; and the respective successors and assigns (if any) of the foregoing.

(b)           The Purchaser may freely assign any or all of its rights under Section 6, in whole or in part, to any Affiliate of the Purchaser without obtaining the consent or approval of the Seller. The Seller shall not be permitted to assign any of its rights or delegate any of its obligations under this Agreement without the Purchaser’s prior written consent.

(c)           Except for the provisions of Section 6 hereof, none of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the parties to this Agreement and their respective successors and assigns (if any). Without limiting the generality of the foregoing: (i) no employee of the Seller shall have any rights under this Agreement or under any of the other Transactional Agreements or otherwise; and (ii) no creditor of the Seller shall have any rights under this Agreement or any of the other Transactional Agreements.

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

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8.11        Remedies Cumulative; Specific Performance.  The rights and remedies of the parties hereto shall be cumulative (and not alternative). Each party agrees that: (a) in the event of any breach or threatened breach by the other party of any covenant, obligation or other provision set forth in this Agreement, such party shall be entitled (in addition to any other remedy that may be available to it) to:  (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach; and (b) no Person shall be required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related Proceeding.

8.12        Waiver.  No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.  No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

8.13        Amendments.  This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the Purchaser and the Seller.

8.14        Severability.  In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

8.15        Entire Agreement.  The Transactional Agreements set forth the entire understanding of the parties relating to the subject matter thereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter thereof.

8.16        Disclosure Schedule.  The Disclosure Schedule shall be arranged in separate parts corresponding to the numbered and lettered sections contained herein permitting such disclosure, and the information disclosed in any numbered or lettered part shall be deemed made in any of the other sections of Disclosure Schedule to which the relevance of such disclosure is reasonably apparent from the text of such disclosure.  Nothing contained in the Disclosure Schedule is intended to broaden the scope of any representation or warranty contained in this Agreement.

8.17        Construction.

(a)           For purposes of this Agreement, whenever the context requires:  the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and

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

23

neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and feminine genders.

(b)           The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(c)           As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

(d)           Except as otherwise indicated, all references in this Agreement to “Sections” and “Exhibits” are intended to refer to Sections of this Agreement and Exhibits to this Agreement.

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

24

The parties to this Agreement have caused this Agreement to be executed and delivered as of the date first written above.

CALIPER LIFE SCIENCES, INC.,

a Delaware corporation

By:

Name:

Title:

DIONEX CORPORATION,

a Delaware corporation

By:

Name:

Title:

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

25

CONFIDENTIAL TREATMENT REQUESTED

LIST OF EXHIBITS

Exhibit A		-	Certain Definitions
Exhibit B		-	Form of Transition Services Agreement
LIST OF SCHEDULES
Schedule 1.1(a)(1)	-		AutoTrace Products
Schedule 1.1(a)(2)	-		Transferred IP
Schedule 1.1(b)	-		Transferred Inventory
Schedule 1.1(c)	-		Transferred Equipment
Schedule 1.1(d)	-		ZyOS and EasyLab Software
Schedule 1.1(e)	-		Seller Contracts
Schedule 1.1A	-		Excluded Assets
Schedule 1.2(b)	-		Material and Information for Transferred Assets
Schedule 1.4(b)	-		Assumed Liabilities
Schedule 2.4(a)	-		Statement of Revenue and Costs
Schedule 2.4(b)	-		Top 25 Customer Revenues
Schedule 2.5	-		Encumbrances
Schedule 2.6(a)(i)	-		Registered IP
Schedule 2.6(a)(ii)	-		Intellectual Property Rights and Intellectual Property
Schedule 2.6(a)(iii)	-		Licenses
Schedule 2.6(c)	-		Seller IP
Schedule 2.6(g)	-		Infringement
Schedule 2.7(a)	-		Seller Contracts
Schedule 2.8	-		Compliance

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

i

Schedule 2.9	-	Governmental Authorization
Schedule 2.14	-	Consents
Schedule 2.15	-	Sufficiency of Transferred Assets
Schedule 4.1	-	Consents
Schedule 4.2		Closing Diligence Items
Schedule 4.3	-	Contracts to be Terminated
Schedule 8.10(c)	-	Dispute Resolution Procedures

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

ii

EXHIBIT A

CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):

Affiliate.  “Affiliate” shall mean, with respect to any Person, any other Person that as of the date of the Agreement or as of any subsequent date, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person.

Agreement.  “Agreement” shall mean the Asset Purchase Agreement to which this Exhibit A is attached (including the Disclosure Schedule), as it may be amended from time to time.

AutoTrace Employee.  “AutoTrace Employee” shall mean any employee of the Seller or any Affiliate of the Seller whom Seller has identified as exclusively performing services, or exclusively having responsibilities, with respect to the AutoTrace Product.

AutoTrace Offering.  “AutoTrace Offering” shall mean each service or product developed, marketed, sold, offered or supported by or on behalf of the Seller or any Affiliate of the Seller relating to the AutoTrace Product at any time and any service or product relating to the AutoTrace Product currently under development by the Seller or any Affiliate of the Seller.

AutoTrace Product.  “AutoTrace Product” shall mean Seller’s instrument for water sample clean-up by solid phase extraction prior to the analysis of such sample for contaminants, which presently sells under the trademark “AutoTrace,” as further described on Schedule 1.1(a)(1).

Claim.  “Claim” shall mean and include all past, present and future disputes, claims, controversies, demands, rights, obligations, liabilities, actions and causes of action of every kind and nature, including:  (a) any unknown, unsuspected or undisclosed claim; and (b) any claim, right or cause of action based upon any breach of any express, implied, oral or written contract or agreement.

Consent.  “Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).

Contract.  “Contract” shall mean any written, oral, implied or other agreement, contract, understanding, arrangement, instrument, note, guaranty, indemnity, representation, warranty, deed, assignment, power of attorney, certificate, purchase order, work order, insurance policy, benefit plan, commitment, covenant, assurance or undertaking of any nature.

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

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Customer Facility.  “Customer Facility” shall mean any facility owned by a customer of the Seller or any Affiliate of the Seller, in which an AutoTrace Employee provides services on a regular basis to such customer, including the following facilities: Massachusetts.

Damages.  “Damages” shall include any loss, damage, injury, decline in value, Liability, Claim, settlement, judgment, award, fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or advisory fee), charge, cost (including any cost of investigation) or expense of any nature.

Disclosure Schedule.  “Disclosure Schedule” shall mean the schedule (dated as of the date of the Agreement) delivered to the Purchaser on behalf of the Seller.

Encumbrance.  “Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust, equitable interest, claim, preference, right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, Order, proxy, option, right of first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment, imperfection of title, condition or restriction of any nature (including any restriction on the transfer of any asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

Entity.  “Entity” shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

Governmental Authorization.  “Governmental Authorization” shall mean any: (a) permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body.

Governmental Body.  “Governmental Body” shall mean any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); (d) multi-national organization or body; or (e) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.

Indemnitees.  “Indemnitees” shall mean the following Persons: (a) the Purchaser; (b) the Purchaser’s current and future Affiliates; (c) the respective Representatives of the Persons referred to in clauses “(a)” and “(b)” above; and (d) the respective successors and assigns of the Persons referred to in clauses “(a)”, “(b)” and “(c)” above.

Intellectual Property.  “Intellectual Property” shall mean algorithms, apparatus, databases, data collections, diagrams, formulae, inventions (whether or not patentable), know-how, logos, marks

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

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(including brand names, product names, logos, and slogans), methods and processes (including manufacturing methods, training methods and materials and similar methods and processes), proprietary information, protocols, recipes, schematics, specifications, software, techniques, URLs, web sites, works of authorship and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

Intellectual Property Rights.  “Intellectual Property Rights” shall mean all rights of the following types, which may exist or be created under the laws of any jurisdiction in the world: (a) rights associated with works of authorship, including exclusive exploitation rights, copyrights, moral rights and mask works; (b) trademark and trade name rights and similar rights; (c) trade secret rights; (d) other proprietary rights in Intellectual Property; and (e) rights in or relating to registrations, renewals, extensions, combinations, divisions, and reissues of, and applications for, any of the rights referred to in clauses “(a)” through “(d)” above.

Knowledge.  Information shall be deemed to be known to or to the “Knowledge” of the Seller if that information is actually known, reasonably should be known or reasonably could be expected to be discovered in the course of conducting a reasonable investigation concerning the existence of such fact or other matter by any officer of the Seller or any Affiliate of the Seller

Legal Requirement.  “Legal Requirement” shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Body.

Liability.  “Liability” shall mean any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable.

Order.  “Order” shall mean any: (a) order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, subpoena, writ or award issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Body or any arbitrator or arbitration panel; or (b) Contract with any Governmental Body entered into in connection with any Proceeding.

Person.  “Person” shall mean any individual, Entity or Governmental Body.

Proceeding.  “Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or any arbitrator or arbitration panel.

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

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Prohibited Transaction.  “Prohibited Transaction” shall mean any transaction involving, directly or indirectly, the sale, lease, license, transfer or disposition of all or any portion of the AutoTrace Offering, other than the license or sale of AutoTrace Offerings to third parties in the ordinary course of business consistent with past practices.

Registered IP.  “Registered IP” shall mean all Seller IP that is registered, filed, or issued under the authority of, with or by any Governmental Body, including registered copyrights, registered mask works and registered trademarks and all applications for any of the foregoing.

Representatives.  “Representatives” shall mean officers, directors, employees, agents, attorneys, accountants and advisors.

Seller Contract.  “Seller Contract” shall mean any Contract relating to the AutoTrace Offerings: (a) to which the Seller or any Affiliate of the Seller is a party; (b) by which the Seller or any Affiliate of the Seller or any of its assets is or may become bound or under which the Seller or any Affiliate of the Seller has, or may become subject to, any obligation; or (c) under which the Seller or any Affiliate of the Seller has or may acquire any right or interest.

Seller Employee.  “Seller Employee” shall mean any current or former employee, independent contractor or director of the Seller or any Subsidiary or other Affiliate of the Seller.

Seller IP.  “Seller IP” shall mean: (a) all Intellectual Property Rights and Intellectual Property embodied in or relating to the AutoTrace Offerings; and (b) all other Intellectual Property or Intellectual Property Rights relating to the AutoTrace Offering in which the Seller or any Affiliate of the Seller has (or purports to have) an ownership interest or an exclusive license or similar exclusive right.

Subsidiary.  An Entity shall be deemed to be a “Subsidiary” of another Person if such Person directly or indirectly owns or purports to own, beneficially or of record:  (a) an amount of voting securities of other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity’s board of directors or other governing body; or (b) at least 50% of the outstanding equity or financial interests or such Entity.

Tax.  “Tax” shall mean any tax (including any income tax, franchise tax, capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax, occupancy tax, withholding tax or payroll tax), levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), that is, has been or may in the future be (a) imposed, assessed or collected by or under the authority of any Governmental Body, or (b) payable pursuant to any tax-sharing agreement or similar Contract.

Tax Return.  “Tax Return” shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

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

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Transactional Agreements.  “Transactional Agreements” shall mean: (a) the Agreement; (b) the Transition Services Agreement; and (c) all other documents and agreements delivered or to be delivered in connection with the Transactions.

Transactions.  “Transactions” shall mean: (a) the execution and delivery of the respective Transactional Agreements; and (b) all of the transactions contemplated by the respective Transactional Agreements, including: (i) the sale of the Transferred Assets by the Seller to the Purchaser in accordance with the Agreement; (ii) the assumption of the Assumed Liabilities by the Purchaser in accordance with the Agreement; and (iii) the performance by the Seller and the Purchaser of their respective obligations under the Transactional Agreements, and the exercise by the Seller and the Purchaser of their respective rights under the Transactional Agreements.

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

vii

EXHIBIT B

FORM OF TRANSITION SERVICES AGREEMENT

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

viii

SCHEDULE 8.10(c)

DISPUTE RESOLUTION PROCEDURES

Subject to the provisions of Section 8.10(c) of the Agreement any claim for indemnification, compensation or reimbursement pursuant to Section 6 of the Agreement and any other claim for a monetary remedy (such as in the case of a claim based on fraud) relating to the Agreement after the Closing shall be brought and resolved exclusively as follows:

(a)           If any Indemnitee has or claims in good faith to have incurred or suffered Damages for which it is or may be entitled to indemnification, compensation or reimbursement under Section 6 of the Agreement or for which it is or may otherwise be entitled to a monetary remedy in the case of a claim based on intentional misrepresentation or fraud relating to the Agreement, the Purchaser may deliver a claim notice (a “Claim Notice”) to the Seller. Each Claim Notice shall: (i) state that the Indemnitee believes in good faith that the Indemnitee is entitled to indemnification, compensation or reimbursement under Section 6 of the Agreement or is or may otherwise be entitled to a monetary remedy (such as in the case of a claim based on intentional misrepresentation or fraud) relating to the Agreement; (ii) contain a brief description in reasonable detail of the facts and circumstances supporting the Indemnitee’s claim; and (iii) contain a non-binding, preliminary, good faith estimate of the amount to which the Indemnitee claims to be entitled (the “Claimed Amount”).

(b)           Within 20 business days after receipt of a Claim Notice, the Seller may deliver to the Purchaser a written response (the “Response Notice”) in which the Seller:  (i) agrees that the full Claimed Amount is owed to the Indemnitee; (ii) agrees that part, but not all, of the Claimed Amount is owed to the Indemnitee; or (iii) indicates that no part of the Claimed Amount is owed to the Indemnitee. If the Response Notice is delivered in accordance with clause “(ii)” or “(iii)” of the preceding sentence, the Response Notice shall also contain a brief description in reasonable detail of the facts and circumstances supporting the Seller’s claim that only a portion or no part of the Claimed Amount is owed to the Indemnitee, as the case may be.  Any part of the Claimed Amount that is not agreed to be owing to the Indemnitee pursuant to the Purchaser’s Claim Notice shall be the “Contested Amount.” If a Response Notice is not delivered by the Seller to the Purchaser within such 20-business day period, then the Seller shall be deemed to have agreed that an amount equal to the full Claimed Amount is owed to the Indemnitee.

(c)           If the Seller in its Response Notice agrees that the full Claimed Amount is owed to the Indemnitee, or if no Response Notice is delivered in accordance with clause “(b)” of this Schedule 8.10(c), the Seller shall, within 10 business days following the receipt of such Response Notice (or, if the Purchaser has not received a Response Notice, within 10 business days following the expiration of the 20-business day period referred to in clause “(b)”) pay the Claimed Amount to such Indemnitee.

(d)           If the Seller in the Response Notice agrees that part, but not all, of the Claimed Amount is owed to the Indemnitee (the “Agreed Amount”), the Seller shall, within 10 business days following the receipt of such Response Notice pay the Agreed Amount to such Indemnitee.

(e)           If any Response Notice expressly indicates that there is a Contested Amount, the Seller and the Purchaser shall (for at least 10 business days) attempt in good faith to resolve the dispute

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

ix

related to the Contested Amount. If the Seller and the Purchaser shall resolve such dispute, the Seller and the Purchaser shall sign a settlement agreement.  The Seller shall, within 10 business days following the execution of such settlement agreement, or such shorter period of time as may be set forth in the settlement agreement, pay the amount specified in such settlement agreement to such Indemnitee.

(f)            In the event that there is a dispute relating to any Claim Notice or Contested Amount and such dispute is not resolved within the 10 business-day period referred to in clause “(e)” above (whether it is a matter between the Purchaser, on the one hand, and the Seller, on the other hand, or it is a matter that is subject to a claim or Proceeding asserted or commenced by a third party brought against the Purchaser in a litigation or arbitration), such matters will be settled by binding arbitration (“Arbitrable Claims”). Notwithstanding the preceding sentence, nothing in this Schedule 10.10(c) shall prevent the Purchaser from seeking preliminary injunctive relief from a court of competent jurisdiction pending settlement of any Arbitrable Claim.

(i)            Except as herein specifically stated, any Arbitrable Claim shall be resolved by arbitration in Santa Clara, California in accordance with JAMS’ Comprehensive Arbitration Rules and Procedures (the “JAMS Rules”) then in effect. However, in all events, the provisions contained herein shall govern over any conflicting rules which may now or hereafter be contained in the JAMS Rules. Any judgment upon the award rendered by the arbitrator shall be entered in any court having jurisdiction ever the subject matter thereof. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available if any judicial proceeding was instituted to resolve an Arbitrable Claim. The final decision of the arbitrator, as entered by a court of competent jurisdiction, will be furnished by the arbitrator to the Seller and the Purchaser in writing and will constitute a final, conclusive and non-appealable determination of the issue in question, binding upon the Seller and the Purchaser, and an order with respect thereto maybe entered in any court of competent jurisdiction.

(ii)           Any such arbitration will be conducted before a single arbitrator who will be compensated for his or her services at a rate to be determined by the Purchaser and the Seller or by JAMS, but based upon reasonable hourly or daily consulting rates for the arbitrator in the event the parties are not able to agree upon his or her rate of compensation.

(iii)         The arbitrator shall be mutually agreed upon by the Purchaser and the Seller. In the event the Purchaser and the Seller are unable to agree within 20 days following submission of the dispute to JAMS by one of the parties, JAMS will have the authority to select an arbitrator from a list of arbitrators who satisfy the criteria set forth in clause “(iv)” hereof.

(iv)          No arbitrator shall have any past or present family, business or other relationship with the Purchaser, the Seller or any Affiliate, director or officer thereof, or any “associate” (as such term is defined in Rule 12b-2 under the Securities Act of 1933, as amended) of the Purchaser, the Seller or any Affiliate, director or officer thereof, unless, following full disclosure of all such relationships, the Purchaser and the Seller agree in writing to waive such requirement with respect to an individual in connection with any dispute.

(v)            The arbitrator shall be instructed to hold an up to eight hour, one day hearing regarding the disputed matter within 60 days of his designation and to render an award (without written opinion) no later than 10 days after the conclusion of such hearing, in each case unless otherwise mutually agreed in writing by the Purchaser and the Seller.

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

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(vi)          No discovery other than an exchange of relevant documents may occur in any arbitration commenced under the provisions of this Schedule 8.10(c). The Purchaser and the Seller agree to act in good faith to promptly exchange relevant documents.

(vii)         The Purchaser and the Seller will each pay 50% of the initial compensation to be paid to the arbitrator in any such arbitration and 50% of the costs of transcripts and other normal and regular expenses of the arbitration proceedings; provided, however, that:  (A) the prevailing party in any arbitration will be entitled to an award of attorneys’ fees and costs; and (B) all costs of arbitration, other than those provided for above, will be paid by the losing party, and the arbitrator will be authorized to determine the identity of the prevailing party and the losing party.

(viii)        The arbitrator chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or any other provisions contained in this Schedule 8.10(c) or the Agreement.

(ix)          Except as specifically otherwise provided in this Schedule 8.10(c) or the Agreement, arbitration will be the sole and exclusive remedy of the parties for any Arbitrable Claim or any other dispute arising out of or relating to this Schedule 8.10(c) or the Agreement.

(g)           Upon resolution of the arbitration described in clause “(f)” of this Schedule 8.10(c), the Seller shall, within 10 business days following the entry of the arbitrator’s decision by a court of competent jurisdiction, or such shorter period of time as may be set forth in the arbitrator’s decision, pay the amount of the award specified in the arbitrator’s decision, if any, to the Indemnitee.

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

xi

EX-10.14

EXHIBIT 10.14

LEASE

BETWEEN

CALIPER LIFE SCIENCES, INC., AS TENANT

AND

BCIA NEW ENGLAND HOLDINGS LLC, AS LANDLORD

68 and 78 Elm Street, Hopkinton, Massachusetts

TABLE OF CONTENTS

		PAGE
ARTICLE 1 BASIC DATA; DEFINITIONS		1
1.1	Basic Data	1
1.2	Enumeration of Exhibits	5
ARTICLE 2 PREMISES, APPURTENANT RIGHTS AND RESERVATIONS		5
2.1	Lease of Premises	5
2.2	Appurtenant Rights and Landlord Reservations	6
2.3	Security	7
2.4	Elm Parcel Right of First Offer	7
2.5	Tenant Access	8
ARTICLE 3 BASIC RENT		8
3.1	Payment	8
ARTICLE 4 TERM COMMENCEMENT DATE/EXTENSION TERMS		8
4.1	Term Commencement Date	8
4.2	Extension Option	9
ARTICLE 5 CONDITION OF PREMISES		10
5.1	Preparation of the Premises	10
5.2	Landlord’s Work	10
5.3	Landlord’s Contribution	11
5.4	Condition of Premises	12
5.5	Swing Space	12
ARTICLE 6 USE OF PREMISES		12
6.1	Permitted Use	12
6.2	Signage	12
6.3	Other Requirements	13
6.4	Extra Hazardous Use	13
6.5	Hazardous Materials	13
ARTICLE 7 INSTALLATIONS AND ALTERATIONS BY TENANT		15
7.1	General	15
7.2	Requirements for Alterations	15
7.3	Tenant’s Removable Property	15
7.4	Liability; Mechanics’ Liens	15
7.5	Intentionally Omitted	16
7.6	Telecommunications	16
7.7	Building Expansions	16
ARTICLE 8 ASSIGNMENT AND SUBLETTING		18
8.1	Prohibition	18

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8.2	Additional Events Deemed to be Assignment/Sublet	19
8.3	Provisions Incorporated Into Sublease	19
8.4	Collection of Rent	20
8.5	Excess Payments	20
8.6	Payment of Landlord’s Costs	20
8.7	Conditions to Effectiveness of Assignment/Sublet	21
ARTICLE 9 MAINTENANCE, REPAIRS AND REPLACEMENTS		21
9.1	Landlord’s Obligations	21
9.2	Tenant’s Obligations	22
ARTICLE 10 UTILITIES AND OTHER SERVICES		23
10.1	Heating, Ventilation and Air-Conditioning	23
10.2	Utilities	23
ARTICLE 11 REAL ESTATE TAXES		25
11.1	Payments on Account of Real Estate Taxes	25
11.2	Abatement	26
ARTICLE 12 OPERATING EXPENSES		26
12.1	Definitions	26
12.2	Tenant’s Payment of Operating Expenses	27
12.3	Triple Net Lease	28
ARTICLE 13 INDEMNITY AND INSURANCE		28
13.1	Tenant’s Indemnity	28
13.2	Tenant’s Insurance	29
13.3	Waiver of Subrogation	30
13.4	Landlord Insurance	30
ARTICLE 14 FIRE, EMINENT DOMAIN, ETC.		31
14.1	Landlord’s Right of Termination	31
14.2	Restoration; Tenant’s Right of Termination	32
14.3	Abatement of Rent	32
14.4	Condemnation Award	32
ARTICLE 15 ADDITIONAL COVENANTS		33
15.1	Tenant	33
15.2	Landlord	33
15.3	As to Both Parties	34
ARTICLE 16 HOLDING OVER; SURRENDER		34
16.1	Holding Over	34
16.2	Surrender of Premises	34
ARTICLE 17 RIGHTS OF MORTGAGEES		35
17.1	Rights of Mortgagees	35
17.2	Assignment of Rents	35

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17.3	Notice to Holder	36
ARTICLE 18 LETTER OF CREDIT/SECURITY DEPOSIT		36
18.1	Letter of Credit	36
18.2	Security Deposit	37
18.3	Application of Security Deposit	37
18.4	Intentionally Omitted	38
ARTICLE 19 DEFAULT; REMEDIES		38
19.1	Tenant’s Default	38
19.2	Landlord’s Remedies	40
19.3	Additional Rent	42
19.4	Remedies Cumulative	42
19.5	Attorneys’ Fees	42
19.6	Waiver	42
19.7	Landlord’s Default	43
19.8	Tenant’s Remedies	43
19.9	Landlord’s Liability	43
ARTICLE 20 MISCELLANEOUS PROVISIONS		44
20.1	Brokerage	44
20.2	Invalidity of Particular Provisions	44
20.3	Provisions Binding, Etc.	44
20.4	Notice	44
20.5	When Lease Becomes Binding; Entire Agreement; Modification	45
20.6	Headings and Interpretation of Sections	45
20.7	Waiver of Jury Trial	45
20.8	Time Is of the Essence	45
20.9	Multiple Counterparts	46
20.10	Governing Law	46
20.11	Condominium	46

iii

LEASE

THIS LEASE is dated as of April 25, 2005 between the Landlord and the Tenant named below, and is of space in the Buildings described below.

ARTICLE 1
BASIC DATA; DEFINITIONS

1.1          Basic Data. Each reference in this Lease to any of the following terms shall be construed to incorporate the data for that term set forth in this Section:

Landlord: BCIA New England Holdings LLC, a Delaware limited liability company.

Landlord’s Address: c/o CrossHarbor Capital Partners LLC, One Boston Place, Boston, Massachusetts 02108.

Landlord’s Managing Agent: BCIA Property Management LLC, or such other person or entity from time to time designated by Landlord.

Tenant: Caliper Life Sciences, Inc., a Delaware corporation.

Tenant’s Address: 68 Elm Street, Hopkinton, Massachusetts 01748.

Building No. 68: The building commonly known and numbered as 68 Elm Street, Hopkinton, Massachusetts, as shown on the site plan attached hereto as Exhibit A, as the same may be expanded by Expansions.

Building No. 68 Rentable Area: Agreed to be 40,800 rentable square feet on the date hereof.

Building No. 78: The building commonly known and numbered as 78 Elm Street, Hopkinton, Massachusetts, as shown on the site plan attached hereto as Exhibit A, as the same may be expanded by Expansions.

Building No. 78 Rentable Area: Agreed to be 76,114 rentable square feet on the date hereof.

Buildings: Collectively, Building No. 68 and Building No. 78, agreed to contain 116,914 rentable square feet on the date hereof (each, a “Building”).

Land: The parcels of land upon which Building No. 68 and Building No. 78 and their respective parking areas are situated, respectively shown cross-hatched and labeled on Exhibit A as 68 Elm Parcel and 78 Elm Parcel.

Property: The Land together with the Buildings and other improvements thereon.

Initial Premises: Building No. 68 and Building No. 78.

Premises: The Initial Premises, together with any Expansions which may be added thereto from time to time upon exercise of Tenant’s rights under Section 7.7, and together with the Swing Space during any period of use of the same by Tenant.

Expansion and Expansions: As defined in Section 7.7.

Premises Rentable Area: Agreed to be 116,914 rentable square feet, as the same may be increased from time to time to reflect any Expansions.

Park: Parcel A as shown on the site plan attached hereto as Exhibit A, together with all improvements thereon and all driveways, roads, drainage, utilities or other facilities appurtenant to or serving the same.

Basic Rent: The Basic Rent prorated at the beginning and end of the Term if appropriate pursuant to Section 3.1 for the Initial Term is as follows:

RENTAL PERIOD	ANNUAL BASIC RENT	MONTHLY PAYMENT
From the Term Commencement Date through December 31, 2005.	The Annual Basic Rent under the Prior Leases, the provisions of which are incorporated herein by this reference for such purpose	The monthly payment of Basic Rent under the Prior Leases
From January 1, 2006 through June 30, 2008.	$1,227,597.00	$102,299.75
July 1, 2008 through December 31, 2011.	$1,490,653.50	$124,221.13
January 1, 2012 through the Initial Expiration Date.	$1,607,567.50	$133,963.96

If Tenant exercises the First Extension Option as provided in Section 4.2 hereof, then the Basic Rent for the First Extension Term shall be the greater of (i) $13.75 multiplied by the rentable square feet of the Premises Rentable Area as of the end of the Initial Term (but in no event less than 116,914 rentable square feet) and (ii) the “First Extension Term Fair Market Rent,” meaning the Basic Rent as determined: (A) by agreement between Landlord and Tenant no later than thirty (30) days after Tenant’s timely exercise of the First Extension Option, provided that if Landlord and Tenant shall not have agreed upon the First Extension Term Fair Market Rent by said date as aforesaid (an “Impasse”), then First Extension Term Fair Market Rent for the First Extension Term shall be fixed by means of an Appraisers’ Determination as more particularly described in Exhibit F hereto.

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If Tenant exercises the Second Extension Option as provided in Section 4.2 hereof, then the Basic Rent for the Second Extension Term shall be the greater of (i) the Annual Basic Rent in effect immediately prior to the expiration of the First Extension Term on a per rentable square foot basis multiplied by the number of rentable square feet of Premises Rentable Area as of the end of the First Extension Term (but in no event less than 116,914 rentable square feet), and (ii) the “Second Extension Term Fair Market Rent,” meaning the Basic Rent as determined: (A) by agreement between Landlord and Tenant no later than thirty (30) days after Tenant’s timely exercise of the Second Extension Option, provided that if Landlord and Tenant have reached an Impasse with respect to the determination of the Second Extension Term Fair Market Rent, then Second Extension Term Fair Market Rent for the Second Extension Term shall be fixed by means of an Appraisers’ Determination as more particularly described in Exhibit F hereto.

Additional Rent: All charges and sums which Tenant is obligated to pay to Landlord pursuant to the provisions of this Lease, other than and in addition to Basic Rent.

Rent: Basic Rent and Additional Rent.

Tenant’s Proportionate Share: One hundred percent (100%) (which is based on the ratio of the agreed upon (a) Premises Rentable Area to (b) Building Rentable Area).

Security Deposit: Any sum, including without limitation, the unapplied proceeds of any Letter of Credit delivered to Landlord, from time to time, to secure the payment and performance of Tenant’s obligations under this Lease.

Letter of Credit: A letter of credit conforming to the requirements set forth in Section 18.1(a) in the initial sum of One Million Four Hundred Seventy-Three Thousand One Hundred Sixteen Dollars and 40/100 ($1,473,116.40) to be held and disposed of as provided in ARTICLE 18.

Term Commencement Date: The date hereof.

Rent Commencement Date: The date hereof.

Expiration Date: December 31, 2015 as the same may be extended pursuant to Section 7.7 (the “Initial Expiration Date”), subject to Tenant’s Termination Right set forth in Section 7.7, and provided that such Expiration Date shall be extended if Tenant exercises its First Extension Option or Second Extension Option, as the case may be.

Term: Commencing on the Term Commencement Date and expiring at 11:59 p.m. on the Expiration Date (the “Initial Term”). The Term shall include any extension thereof that is expressly provided for by this Lease and that is exercised strictly in accordance with this Lease.

Right of First Offer: Tenant’s right to purchase or lease the vacant land referred to as the Elm Parcel (as hereinafter defined) as shown cross-hatched and labeled as Elm Parcel on Exhibit A hereto as provided in Section 2.4.

First Extension Option: Tenant’s right to extend the Term hereof in accordance with Section 4.2.

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First Extension Term: The extended portion of the Term resulting from Tenant’s exercise of its First Extension Option in accordance with Section 4.2.

Second Extension Option: Tenant’s right to extend the First Extension Term hereof in accordance with Section 4.2.

Second Extension Term: The extended portion of the Term resulting from Tenant’s exercise of its Second Extension Option in accordance with Section 4.2.

General Liability Insurance: $5,000,000.00 per occurrence/$10,000,000.00 aggregate (combined single limit) for property damage, bodily injury and death.

Permitted Use: Office, laboratory, research and development, manufacturing and production use.

Landlord’s Contribution: An amount not to exceed Three Million Two Hundred Seventy-Two Thousand Eight Hundred Fifty and No/100 Dollars ($3,272,850.00), as affected by ARTICLE 5 hereof.

Broker: Richards Barry Joyce & Partners, LLC.

Co-Broker: Lincoln Property Company.

Agents: Officers, directors, members, managers, partners, employees, servants, agents and representatives.

Force Majeure: Collectively and individually, strikes, lockouts or other labor actions, fire or other casualty, acts of God, governmental preemption of priorities or other controls in connection with a national or other public emergency, unavailability of fuel, supplies or labor, or any other cause, whether similar or dissimilar, beyond the reasonable control of the party required to perform an obligation, excluding financial constraints of such party.

Business Days: All days except Saturdays, Sundays, and other days when federal or state banks in the state in which the Property is located are not open for business.

Normal Business Hours: 8 a.m. to 6 p.m. on all Business Days.

Applicable Law: All laws, rules, regulations, statutes, orders, ordinances, by-laws, permitting and licensing requirements, as amended from time to time, including without limitation, the Americans With Disabilities Act of 1990 and any applicable state and local regulations regarding architectural access or comparable regulations imposed by any Governmental Authority.

Governmental Authority: All governmental or quasi governmental bodies, agencies, departments, boards, offices, commissions or authorities possessing or claiming jurisdiction with regard to the Tenant, the Property, or the Park.

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Prior Leases: The following Leases with respect to the Premises collectively constitute the Prior Leases: (i) that certain lease dated October 9, 1982, as amended, between Landlord’s predecessor in title Elmwood Realty Associates (“Elmwood”) and Zymark Corporation (“Zymark”) as to which Tenant was a successor by merger and successor tenant, with respect to Building No. 68; (ii) that certain lease dated September 9, 1986, as amended, between Elmwood and Zymark with respect to 52,114 rentable square feet in Building No. 78; and (iii) that certain lease dated December 30, 1993, as amended, between Elmwood and Zymark with respect to an additional 24,000 expansion space in Building No. 78, which Prior Leases are superseded hereby as of the Term Commencement Date (1) except to the extent provisions thereof are incorporated herein and (2) except that all provisions thereof which are stated to survive the expiration of the term thereof or the earlier termination thereof shall so survive. The security deposit of $5,000 held by Landlord with respect to the Prior Leases shall be returned to Tenant upon the execution of this Lease and the delivery of the Letter of Credit.

1.2          Enumeration of Exhibits. The following Exhibits are attached hereto, and are incorporated herein by reference.

Exhibit A	Site Plan of Buildings and Park
Exhibit A-1	Expansions Application Plans
Exhibit A-2	Swing Space Plan
Exhibit B	Operating Expenses
Exhibit C	Rules and Regulations of Building
Exhibit D	Form of Notice of Lease
Exhibit E	Form of Letter of Credit
Exhibit F	Appraiser’s Determination of Fair Market Rent
Exhibit G	Qualified Base Building Improvements
Exhibit H	SNDA

ARTICLE 2
PREMISES, APPURTENANT RIGHTS AND RESERVATIONS

2.1         Lease of Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises, to have and to hold, for the Term and upon the terms and conditions set forth herein.

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2.2         Appurtenant Rights and Landlord Reservations.

(a)           Appurtenant Rights.

Tenant shall have, as appurtenant to the Premises, the non-exclusive right to use, and permit its invitees to use in common with others entitled thereto, (A) the common areas, driveways roads, drainage, and utilities of the Park to the extent that the same actually service the Premises, and (B) easements, rights of way or other rights, if any, which are appurtenant to the Property pursuant to any recorded documents evidencing such easements or rights and the parking from time to time provided for the Buildings; but such rights shall always be subject to (i) reservations, restrictions, easements and encumbrances of record, from time to time, as the same may be amended (ii) such conditions, rules and regulations from time to time established by Landlord with respect to the Property or the Park pursuant to Section 6.3(c) (the “Rules and Regulations”), and (iii) Landlord’s reservations set forth in subsection (b) below. Tenant shall have the exclusive right to use the parking area shown on the cross-hatched area labeled “68 Elm Parcel” on Exhibit A for Building No. 68, and Tenant shall have the exclusive right to use the parking area shown on the cross-hatched area labeled “78 Elm Parcel” on Exhibit A for Building No. 78.

(b)           Landlord Reservations.

Landlord reserves the right to post “For Lease” signs on the Property during the last twelve (12) months of the Term, but such signage shall include no more than two signs and such signs shall not exceed 4 feet by 6 feet and shall not include banners on the Buildings. In addition, Landlord and Tenant acknowledge the request by the Town of Hopkinton to change the name, street address, and number of Building No. 78 and agree that the change can proceed based upon Landlord’s reasonable judgment as to the appropriate change in consultation with the Town of Hopkinton. Upon any such change, Landlord shall be responsible for costs associated with any changes to signage identifying the Building address which may be (1) affixed to the Building or (2) on a monument outside the Building but shall not be responsible for any of Tenant’s costs related to letterhead changes, notices to third parties, or otherwise.

Landlord further reserves the right to enter the Premises at all reasonable hours for the purpose of inspecting the Premises, doing maintenance, making repairs and replacements, reading meters or otherwise exercising its rights or fulfilling its obligations under this Lease, including without limitation, its rights as set forth in Section 9.2 hereof, and Landlord and Landlord’s Managing Agent also shall have the right to make access available at all reasonable hours to prospective or existing mortgagees, purchasers or tenants of any part of the Property. Such right of access shall be during business hours and after reasonable telephonic notice to Tenant except in the event of an emergency. If Tenant shall not be personally present to open and permit such entry into the Premises, Landlord or Landlord’s Agents shall nevertheless be able to gain such entry by contacting a representative of Tenant, whose name, address and telephone number shall be furnished by Tenant to Landlord within ten (10) days after the Term Commencement Date, and updated from time to time as necessary. If an excavation shall be made by Landlord or Landlord’s Agents upon the portion of the Land adjacent to any Building, or shall be authorized by Landlord or Landlord’s Agents to be made, Tenant shall afford to those parties causing or authorized to cause such excavation, license to enter upon the Premises for the purpose of doing such work as said parties shall deem necessary to preserve such Building from injury or damage and to support the same by proper foundations without any claim for damage or indemnity against Landlord, or diminution or abatement of Rent.

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Landlord further reserves the right to further develop the Park and to modify common areas as it determines in its sole discretion so long as the same does not prevent access to the Property, such development rights being limited by Section 2.4 and Section 7.7 hereof.

2.3          Security. Tenant shall be solely responsible for providing security for the Property. Landlord expressly disclaims any and all responsibility and/or liability for the physical safety of Tenant’s property, and for that of Tenant’s Agents, invitees and independent contractors. Tenant agrees that, as between Landlord and Tenant, it is Tenant’s responsibility to advise Tenant’s Agents, invitees and independent contractors as to necessary and appropriate safety precautions.

2.4          Elm Parcel Right of First Offer. Tenant shall have a one-time right of first offer (the “Right of First Offer”) to purchase or lease the existing vacant, undeveloped, un-permitted parcel of land shown cross-hatched and labeled “Elm Parcel” on Exhibit A hereto (the “Elm Parcel”) subject to the terms and provisions hereof. Except as set forth below, if Landlord decides to develop or market for sale or lease the Elm Parcel, Landlord agrees to notify Tenant in writing that Landlord intends to (a) develop or market or (b) lease the Elm Parcel (the “Elm Parcel Intention Notice”) in which event Tenant shall have seven (7) Business Days from the date of the Elm Parcel Intention Notice to present a written offer to Landlord either to purchase (if the Elm Parcel Intention Notice related to a sale) or to lease (if the Elm Parcel Intention Notice related to a lease) the Elm Parcel (the “Offer”). If within ten (10) Business Days following Landlord’s receipt of an Offer, Landlord and Tenant are unable to agree on the terms and conditions relating to the purchase and sale or lease of the Elm Parcel, then (i) Landlord shall be free to develop the Elm Parcel, (ii) Landlord shall be free to sell, if the Elm Parcel Intention Notice related to a sale, or lease if the Elm Parcel Intention Notice related to a lease, the Elm Parcel to any third party on such terms and conditions as may be agreed to with such third party, (iii) this Right of First Offer shall lapse, (iv) this Section 2.4 shall be void and of no further force and effect and (v) all other provisions of this Lease shall remain in full force and effect as if this Section 2.4 was not included therein.

If, following Landlord’s delivery of the Elm Parcel Intention Notice, Tenant shall fail to timely submit an Offer as set forth above, then (i) Landlord shall be free to develop the Elm Parcel, (ii) Landlord shall be free to sell the Elm Parcel to any third party on such terms and conditions as may be agreed to with such third party, (iii) this Right of First Offer shall lapse, (iv) this Section 2.4 shall be void and of no further force and effect, and (v) all other provisions of this Lease shall remain in full force and effect as if this Section 2.4 was not included therein.

Tenant’s right to be provided with the Elm Parcel Intention Notice and its right to submit an Offer to Landlord as set forth herein are conditioned upon (i) no uncured Default of Tenant existing on either the date the Offer is submitted to Landlord or the date the Elm Parcel is to be sold to Tenant as agreed upon by the parties, (ii) this Lease being in full force and effect, and (iii) Caliper Life Sciences, Inc. not having assigned this Lease nor sublet more than fifty percent (50%) of the rentable square footage of the Premises.

Notwithstanding any of the foregoing provisions to the contrary, Landlord shall have no obligation whatsoever to provide the Elm Parcel Intention Notice to Tenant or otherwise provide Tenant with an opportunity to purchase the Elm Parcel if Landlord at any time intends to market

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or sell the Elm Parcel together with any other material portion or portions of the Park, and upon any such sale, this Section 2.4 shall be void and of no further force and effect and all other provisions of this Lease shall remain in full force and effect as if this Section 2.4 was not included herein.

2.5          Tenant Access. Tenant shall have access to the Premises and the right to use and enjoy the Premises and the appurtenant rights as set forth in Section 2.2(a) (subject to Landlord’s reservations set forth in Section 2.2(b) and elsewhere in this Lease) twenty-four (24) hours per day, seven (7) days per week.

ARTICLE 3
BASIC RENT

3.1         Payment.

(a)           Tenant agrees to pay the Basic Rent and Additional Rent to Landlord, or as directed by Landlord, commencing on the Rent Commencement Date, without offset, abatement (except as provided in Section 14.3), deduction or demand. Basic Rent shall be payable in advance in lawful money of the United States in equal monthly installments, on the first day of each and every calendar month during the Term. All payments of Rent shall be sent to Landlord at Fleet Lock Box, Mail Code CTEHF03E, Boston Capital, Box 31130, 99 Founder’s Plaza, Hartford, Connecticut 06108, or at such other place as Landlord may from time to time designate by written notice or may be paid by wire transfer based upon the following instructions as the same may be amended from time to time: Bank of America, BCIA New England Holdings LLC, Account # 9419047140, ABA # 011 000 138, Reference: Elm Street/Caliper. In the event that any installment of Basic Rent or any payment of Additional Rent is not paid within five (5) days following when due, Tenant shall pay to Landlord, in addition to any charges due under Section 19.2(f), an administrative fee equal to 5% of the overdue amount. Landlord and Tenant agree that all amounts due from Tenant under or with respect to this Lease, whether labeled Basic Rent, Additional Rent or otherwise, shall be considered as rental reserved under this Lease for all purposes, including without limitation, regulations promulgated pursuant to the Bankruptcy Code, including without limitation, Section 502(b) thereof.

(b)           Basic Rent for any partial month falling within the Term shall be pro-rated on a daily basis, and if the first day on which Tenant must pay Basic Rent shall be other than the first day of a calendar month, the first payment which Tenant shall make to Landlord shall be equal to a proportionate part of the monthly installment of Basic Rent for the partial month from the first day on which Tenant must pay Basic Rent to the last day of the month in which such day occurs.

ARTICLE 4
TERM COMMENCEMENT DATE/EXTENSION TERMS

4.1          Term Commencement Date. The “Term Commencement Date” shall be January 1, 2006.

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4.2          Extension Option. Tenant shall have the option (the “First Extension Option”) to extend the Term of this Lease for an additional period of five (5) years, commencing on the day following the originally scheduled Expiration Date and expiring on the day immediately preceding the five (5) year anniversary of the originally scheduled Expiration Date (the “First Extension Term Expiration Date”), with such First Extension Option to be exercised by Tenant delivering to Landlord written notice thereof not less than twelve (12) months and not more than fifteen (15) months prior to the originally scheduled Expiration Date. Tenant’s right to exercise its First Extension Option is conditioned upon (a) no uncured Default of Tenant existing on the date of exercise or the date the First Extension Term (as hereinafter defined) is to commence, and (b) this Lease being in full force and effect. If Tenant exercises its First Extension Option, then the portion of the Term preceding the originally scheduled Expiration Date shall be referred to as the “Initial Term,” and the portion of the Term from and after the originally scheduled Expiration Date shall be referred to as the “First Extension Term.” The First Extension Term shall be upon all the same terms, covenants and conditions as the Initial Term, except (i) as to Basic Rent, which shall be determined as set forth in Section 1.1, (ii) that, except as set forth below with respect to Tenant’s Second Extension Option (as hereinafter defined), Tenant shall have no further extension rights unless otherwise expressly provided herein or hereafter agreed to in writing by Landlord, (iii) Tenant shall not be entitled to any period of “free rent” for the First Extension Term, (iv) there shall be no Landlord Contribution or similar contribution from Landlord for tenant improvements in connection with such First Extension Term, and (v) Landlord shall be under no obligation to perform any improvements or related work to the Premises.

Tenant shall have the option (the “Second Extension Option”) to extend the Term of this Lease for an additional period of five (5) years following the First Extension Term, commencing on the day following the originally scheduled First Extension Term Expiration Date and expiring on the day immediately preceding the five (5) year anniversary of the originally scheduled First Extension Term Expiration Date, with such Second Extension Option to be exercised by Tenant delivering to Landlord written notice thereof not less than twelve (12) months and not more than fifteen (15) months prior to the originally scheduled First Extension Term Expiration Date. Tenant’s right to exercise its Second Extension Option is conditioned upon (a) no uncured Default of Tenant existing on the date of exercise or the date the Second Extension Term (as hereinafter defined) is to commence, and (b) this Lease being in full force and effect. If Tenant exercises its Second Extension Option, then the portion of the Term from and after the originally scheduled First Extension Term Expiration Date shall be referred to as the “Second Extension Term.” The Second Extension Term shall be upon all the same terms, covenants and conditions as the Initial Term, except (i) as to Basic Rent, which shall be determined as set forth in Section 1.1, (ii) that Tenant shall have no further extension rights unless otherwise expressly provided herein or hereafter agreed to in writing by Landlord, (iii) Tenant shall not be entitled to any period of “free rent” for the Second Extension Term, (iv) there shall be no Landlord Contribution or similar contribution from Landlord in connection with such Second Extension Term, and (v) Landlord shall be under no obligation to perform any improvements or related work to the Premises.

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ARTICLE 5
CONDITION OF PREMISES

5.1         Preparation of the Premises.

(a)           Tenant shall prepare, at its sole cost and expense (against which the Landlord’s Contribution may be applied), plans (the “Plans”) for (i) the interior finish and layout of the initial improvements which Tenant desires to perform in the Premises, and (ii) the qualified base building improvements set forth on Exhibit G attached hereto (together, the “Initial Work”). The Plans shall be submitted to Landlord, together with a construction budget setting forth the anticipated costs for the Initial Work (the “Estimated Initial Work Budget”), and Landlord shall approve or disapprove of the Plans, in its reasonable discretion, in writing (and any disapproval by Landlord shall specify the matters objected to by Landlord), within thirty (30) days of receiving them. Landlord will not object to matters shown on initial plans that Landlord has reviewed and approved in writing prior to the date of this Lease to the extent not materially altered in the Plans. No work shall be conducted by or on behalf of Tenant until the Plans have been fully approved in writing by Landlord. At Tenant’s sole cost and expense (against which the Landlord’s Contribution may be applied), Tenant shall cause the Plans to be revised in a manner sufficient to remedy the Landlord’s objections and/or respond to the Landlord’s concerns and for such revised Plans to be redelivered to Landlord, and Landlord shall approve or disapprove Tenant’s revised Plans within ten (10) Business Days following the date of resubmission. Landlord’s failure to timely respond to Tenant’s submitted Plans or revised Plans shall be deemed to be an approval thereof.

The Plans shall be stamped by a Massachusetts registered architect and engineer, such architect and engineer and Tenant’s construction manager, general contractor and subcontractors, being subject to Landlord’s prior reasonable approval, and shall comply with Applicable Law and the requirements of the Rules and Regulations and shall be in a form satisfactory to appropriate governmental authorities responsible for issuing permits, approvals and licenses required for such Initial Work. Such architect and engineer and Tenant’s construction manager shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld, conditioned, or delayed.

(b)             All of the Initial Work shall be completed by Tenant in accordance with the requirements set forth in the Rules and Regulations.

5.2          Landlord’s Work. While the Initial Work is conducted by Tenant, Landlord agrees to replace the roof membrane in accordance with plans and specifications prepared by Landlord on Building No. 68 (“Landlord’s Work”), and Landlord shall bear the full cost of the Landlord’s Work without any offset against Landlord’s Contribution or inclusion in Operating Expenses, it being acknowledged that Landlord shall have no obligation to maintain, repair or replace any other portion of the Buildings except as set forth in ARTICLE 9, and that any such maintenance, repair or replacement work, other than Landlord’s Work, may be included in Operating Expenses as further described in ARTICLE 12 and Exhibit B. So long as the Tenant’s Termination Right, as defined in Section 7.7, has expired without exercise, Landlord shall also provide an allowance to Tenant of $116,349.00 for the estimated cost to replace: (i) all rooftop HVAC units at Building No. 68, and (ii) the nine (9) 1986 rooftop HVAC units at

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Building No. 78 (the “HVAC Allowance”). Tenant shall replace such HVAC units as part of the Initial Work and Landlord shall pay the HVAC Allowance to Tenant consistent with the procedures for payment of Landlord’s Contribution (without any requirement for Tenant to share in the expense of such replacement up to the amount of the HVAC Allowance).

5.3          Landlord’s Contribution. So long as the Tenant’s Termination Right, as defined in Section 7.7, has expired without exercise, Landlord shall reimburse Tenant for the costs incurred by Tenant with respect to the design and performance of the Initial Work and the Expansions (as defined in Section 7.7), if any, up to the amount of Landlord’s Contribution, subject to the provisions hereof; provided, however, that no more than Five Hundred Thousand Dollars ($500,000.00) of Landlord’s Contribution may be used by Tenant for so-called soft costs, including without limitation, costs related to design, architectural, engineering and construction planning services. To the extent that the Initial Work and any Expansions exceeds the Landlord’s Contribution, Tenant shall be entirely responsible for such excess, but in any case, Tenant shall spend no less than One Million Six Hundred Thousand Dollars ($1,600,000.00) with respect to the Initial Work and any Expansions, as more particularly set forth herein. Landlord’s Contribution shall be payable by Landlord to Tenant in installments, according to Landlord’s construction disbursement procedures as the Initial Work progresses, in the amount of two-thirds (2/3) of any installment of such costs and Tenant shall be obligated to pay one-third (1/3) of such costs until such time as Tenant has paid One Million Three Hundred Thousand Dollars ($1,300,000.00) of such costs; provided, however, that once Landlord has paid the entire Landlord’s Contribution and Tenant has paid One Million Three Hundred Thousand Dollar ($1,300,000.00), Tenant shall thereafter (i) pay no less than Three Hundred Thousand Dollars ($300,000.00) towards the Initial Work and any Expansions, and (ii) provide Landlord with satisfactory evidence that such payment has been made towards the Initial Work and any Expansions, on or before December 31, 2006, as may be extended pursuant to Section 7.7. Prior to the payment of any such installment of Landlord’s Contribution by Landlord, Tenant shall deliver to Landlord a written request, to be submitted no more frequently than once every thirty (30) days, for such disbursement, which request shall be accompanied by: (i) invoices for the Initial Work covered by any previous requisition; (ii) partial lien waivers or final lien waivers (in the case of a final installment) from all contractors and subcontractors; (iii) a certificate signed by the Architect and an officer of the Tenant certifying that the Initial Work represented by the aforementioned invoices has been completed substantially in accordance with the Plans; and (iv) evidence reasonably satisfactory to Landlord that Tenant has paid its respective share of Initial Work and Expansion costs to date as set forth above. Thereafter, Landlord’s Contribution shall be available for requisition as aforesaid and Landlord shall disburse such amounts within thirty (30) days following the date Tenant delivers to Landlord items (i) through (iv) above, until the same is exhausted. After Landlord’s Contribution is exhausted, Tenant shall then pay from its own funds all further sums necessary to complete the Initial Work and any Expansions; provided, however, that Tenant shall pay no less than Three Hundred Thousand Dollars ($300,000.00) towards the completion of the Initial Work and any Expansions on or before December 31, 2006, as set forth above, as may be extended pursuant to Section 7.7.

Any portion of Landlord’s Contribution which has not been applied on or before December 31, 2006 shall be deemed forfeited by Tenant and Landlord shall have no further obligation with respect thereto.

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5.4          Condition of Premises. Except for Landlord’s Contribution for the Initial Work and Landlord’s performance of Landlord’s Work under Section 5.2, the Premises are being leased by Tenant in their condition as of the delivery date, “As Is,” without representation or warranty by Landlord. Tenant acknowledges that it has inspected the Premises and, except for the Initial Work and Landlord’s Work under Section 5.2, has found the same satisfactory.

5.5          Swing Space. During the period commencing on the later of (a) the date on which Tenant notifies Landlord of its intent to occupy and use the Swing Space, (b) the date this Lease is fully executed and (c) the date on which Tenant’s Termination Right, as defined in Section 7.7, has expired without exercise, and ending on the earlier of (a) five (5) business days following Tenant’s substantial completion of the Initial Work, and (b) December 31, 2005, as may be extended pursuant to Section 7.7 (the “SS End Date”), Tenant may use the portion of the building at 35 Parkwood Drive, Hopkinton, MA shown on Exhibit A-2 hereto for office and warehouse use (the “Swing Space”). Tenant shall accept the Swing Space in its “as is” condition and Landlord shall have no obligation to prepare the Swing Space for Tenant’s occupancy except that if the Town of Hopkinton does not permit Tenant to occupy the Swing Space due to a building code issue, then Landlord shall be responsible for all costs associated with rectifying such issue. Tenant’s occupancy of the Swing Space shall be on all of the terms and conditions of this Lease except that (a) no Basic Rent shall be payable for the Swing Space, and (b) the following provisions of this Lease shall not be applicable to the Swing Space: Section 2.4, 3.1, Article 3, Article 4, Article 5, Section 6.2, 7.6, 7.7, Article 11, Article 12, Article 14, Article 18. Tenant will reimburse Landlord, upon billing therefor, for the excess of utilities cost during Tenant’s occupancy of the Swing Space over the monthly utility cost for the Swing Space during 2004. Tenant shall surrender the Swing Space on the SS End Date in accordance with Section 16.2 as though the Swing Space were the Premises and the Term hereof had expired or had earlier terminated.

ARTICLE 6
USE OF PREMISES

6.1          Permitted Use. Tenant agrees that the Premises shall be used and occupied by Tenant only for Permitted Uses and for no other use without Landlord’s prior express written consent. Tenant agrees and acknowledges that it has performed all investigations it has deemed necessary to satisfy itself that the use of the Premises for the Permitted Use is authorized under Applicable Law, including without limitation, all zoning laws in effect in the town/city in which the Property is located, and that Landlord has made no representations or warranties to Tenant with respect thereto.

6.2          Signage. Tenant shall have the right to install exterior signage on the Buildings bearing Tenant’s name and logo and a monument sign (which may be shared with other Park tenants) at the Park entrance provided that such signs or lettering comply with law and conform to any sign standards of Landlord and/or the Park, and provided that Tenant has submitted to Landlord a plan or sketch in reasonable detail (showing, without limitation, size, color, location, materials and method of affixation) of the sign to be placed on such entry doors. Landlord will not unreasonably withhold consent for any such sign which complies with the foregoing. Tenant shall not otherwise place on the exterior of the Buildings (including both interior and exterior

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surfaces of doors and interior surfaces of windows) or on any part of the Property, to the extent visible to the public, any sign, symbol, advertisement or the like.

6.3         Other Requirements. Tenant agrees to conform to the following provisions during the Term of this Lease:

(a)           Tenant shall not perform any act or carry on any practice which materially may injure the Premises, or any other part of the Buildings or the Property, other than that arising from normal wear and tear, nor shall approved Alterations constitute material injury so long as constructed in conformity with this Lease;

(b)           Tenant shall, in its use of the Premises, comply with Applicable Law;

(c)           Tenant shall abide by the Rules and Regulations for the Property and the Park which may be established from time to time by Landlord or the Park. In the event that there shall be a conflict between such Rules and Regulations and the provisions of this Lease, the provisions of this Lease shall control. The Rules and Regulations currently in effect are set forth in Exhibit C; and

(d)           Tenant shall not abandon the Premises.

6.4          Extra Hazardous Use. Tenant covenants and agrees that Tenant will not do or permit anything to be done in or upon the Premises, or bring in anything or keep anything therein, which shall increase the rate of property or liability insurance carried by Landlord on the Premises or the Property above the standard rate applicable to Premises being occupied for the Permitted Use, unless Tenant agrees to pay such increase in insurance premiums. If the premium or rates payable with respect to any policy or policies of insurance purchased by Landlord or Landlord’s Managing Agent with respect to the Property increases as a result of any act or activity on or use of the Premises during the Term or payment by the insurer of any claim arising from any act or neglect of Tenant, or Tenant’s Agents, independent contractors or invitees, Tenant shall pay such increase, from time to time, within fifteen (15) days after demand therefor by Landlord, as Additional Rent.

6.5          Hazardous Materials.

(a)           As used herein each of the following terms shall have the meaning ascribed thereto:

(i)            “Hazardous Materials” shall mean each and every element, compound, chemical, mixture, contaminant, pollutant, material, waste or other substance which is defined, determined or identified as hazardous or toxic under any Environmental Law, including, without limitation, an “oil,” “hazardous waste,” “hazardous substance,” or “chemical substance or mixture,” as the foregoing terms (in quotations) are defined in Environmental Laws, as defined below.

(ii)           “Environmental Law” shall mean any federal, Commonwealth of Massachusetts and/or local Town of Hopkinton statute, ordinance, bylaw, code, rule and/or regulation now or hereafter enacted, pertaining to any aspect of the environment or

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human health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §6901 et seq., the Toxic Substances Control Act, 15 U.S.C. §2061 et seq., the Federal Clean Water Act, 33 U.S.C. §1251, and the Federal Clean Air Act, 42 U.S.C. §7401 et seq., and all environmental laws of the state in which the Property is located, including without limitation, Chapter 21C, Chapter 21D, and Chapter 21E of the General Laws of Massachusetts and the regulations promulgated by the Massachusetts Department of Environmental Protection.

(iii)          “Environmental Condition” shall mean any disposal, release or threat of release of Hazardous Materials on, from or about the Premises, the Buildings or the Property or storage of Hazardous Materials on, from or about the Premises, the Buildings or the Property.

(b)         Tenant may use, handle, treat, transport, store and dispose of Hazardous Materials related to its use of the Premises for the Permitted Use, provided that Tenant shall comply with all applicable Environmental Laws. Tenant shall give written notice to Landlord as soon as reasonably practicable of (i) any communication received by Tenant from any governmental authority concerning Hazardous Materials which relates to the Premises, the Buildings or the Property, and (ii) any Environmental Condition of which Tenant is aware.

(c)          Tenant shall indemnify, defend upon demand with counsel reasonably acceptable to Landlord, and hold Landlord harmless from and against, any liabilities, losses, claims, damages, interest, penalties, fines, Attorneys’ Fees (as defined below), experts’ fees, court costs, remediation costs, and other expenses which result from the use, storage, handling, treatment, transportation, release, threat of release or disposal of Hazardous Materials in or about the Premises or the Property by Tenant or Tenant’s Agents, independent contractors or invitees or by Zymark or Zymark’s Agents, independent contractors or invitees either prior to, during or after the Term of this Lease. As used in this Lease, the term “Attorneys’ Fees” means attorneys’, paralegals;, consulting and witness’ fees and disbursements, whether for in house counsel or outside counsel (including, without limitation, for attendance at hearings, depositions, and trials) and related expenses, including, without limitation, for lodging, meals, and transportation, together with all such costs and expenses incurred in connection with appellate proceedings.

(d)         Landlord shall indemnify, defend upon demand with counsel reasonably acceptable to Tenant, and hold Tenant harmless from and against, any liabilities, losses, claims, damages, interest, penalties, fines, Attorneys’ Fees (as defined above), experts’ fees, court costs, remediation costs, and other expenses which result from the use, storage, handling, treatment, transportation, release, threat of release or disposal of Hazardous Materials in or about the Premises or the Property by Landlord, or Landlord’s Agents or independent contractors, either prior to, during or after the Term of this Lease.

(e)          Landlord, on or prior to the date of this Lease, has provided Tenant with a copy of the most recent Phase I environmental report for the Property.

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The provisions of this Section 6.5 shall survive the expiration or earlier termination of the Term of this Lease, regardless of the cause of such expiration or termination.

ARTICLE 7
INSTALLATIONS AND ALTERATIONS BY TENANT

7.1          General. Tenant shall make no alterations, additions (including, for the purposes hereof, wall-to-wall carpeting), or improvements (collectively with the Initial Work and the Expansions, “Alterations”) in or to the Premises (including without limitation any Alterations, other than the Initial Work which is governed by ARTICLE 5, necessary for Tenant’s initial occupancy of the Premises) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed with respect to Alterations that do not materially affect the Structure (as defined below) of the Buildings, the Buildings’ heating, ventilating, and air-conditioning (“HVAC”), life safety, electrical, plumbing, mechanical or utility systems or any other Building systems (collectively, the “Building Systems”). Notwithstanding the foregoing, Landlord’s consent shall not be required for Alterations costing an aggregate of less than $100,000 in any twelve (12) month period if such Alterations do not materially affect the Structure (as defined below) of the Buildings, the Buildings’ HVAC or any other Building Systems. Any Alterations shall be performed and maintained in accordance with the Rules and Regulations and with plans and specifications meeting the requirements set forth in the Rules and Regulations and approved in advance by Landlord.

7.2          Requirements for Alterations. All Alterations shall (i) be performed in a good and workmanlike manner and in compliance with all Applicable Law, including the requirement that Tenant obtain any and all permits and approvals required of the applicable government authorities, (ii) be made at Tenant’s sole cost and expense, (iii) become part of the Premises and the property of Landlord, (unless at the time of Landlord’s approval of such Alterations, Landlord elects in writing to require or permit Tenant to remove the same upon Tenant’s surrender of the Premises) except for Tenant’s Removable Property, as defined in Section 7.3 below, and (iv) be coordinated with any work being performed by Landlord in such a manner as not to damage the Buildings or interfere with the construction or operation of the Buildings. If any Alterations shall involve the removal of fixtures, equipment or other property in the Premises which are not Tenant’s Removable Property, such fixtures, equipment or other property shall be promptly replaced by Tenant at its expense with new fixtures, equipment or other property of like utility and of at least equal quality.

7.3          Tenant’s Removable Property. All articles of personal property and all business fixtures, machinery and equipment and furniture owned or installed by Tenant solely at its expense in the Premises (“Tenant’s Removable Property”) shall remain the property of Tenant and may be removed by Tenant at any time prior to the expiration or earlier termination of the Term, provided that Tenant, at its expense, shall repair any damage to the Property caused by such removal.

7.4          Liability; Mechanics’ Liens. Notice is hereby given, and Landlord and Tenant hereby agree, that Landlord shall not be liable for any labor or materials (or the cost therefor) furnished or to be furnished to Tenant upon credit, and that no mechanic’s or other lien for any such labor or materials shall attach to or affect the reversion or other estate or interest of

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Landlord in and to the Property or any portion thereof. To the maximum extent permitted by law, before such time as any contractor commences to perform the Initial Work or other Alterations, Tenant shall obtain from such contractor (and any subcontractors), and shall furnish to Landlord, a written statement acknowledging the provisions set forth in the immediately preceding sentence and, at Landlord’s request, Tenant shall, before commencing its Alterations, secure additional assurances satisfactory to Landlord in its reasonable discretion protecting Landlord against claims arising out of the furnishing of labor and materials for such Alterations. Tenant agrees to pay promptly when due the entire cost of any Alterations, and not to cause or permit any liens for labor or materials performed or furnished in connection therewith to attach to all or any part of the Property and to immediately discharge any such liens which may so attach. If, notwithstanding the foregoing, any lien is filed against all or any part of the Property for Alterations claimed to have been done for, or materials claimed to have been furnished to, Tenant or Tenant’s Agents or independent contractors, Tenant, at its sole cost and expense, shall cause such lien to be dissolved within twenty-five (25) days after receipt of notice that such lien has been filed, by the payment thereof or by the filing of a bond sufficient to accomplish the foregoing and shall deliver to Landlord evidence thereof within three (3) business days of such dissolution. Any notice by Landlord to Tenant shall refer to the obligation to comply within such twenty-five (25) day period. If Tenant fails to discharge any such lien within such time period, Landlord may, at its option, discharge such lien and treat the cost thereof (including Attorneys’ Fees incurred in connection therewith) as Additional Rent payable by Tenant upon demand, it being expressly agreed that such discharge by Landlord shall not be deemed to waive or release a Default of Tenant in not discharging such lien. Tenant shall indemnify and hold Landlord harmless from and against any and all expenses, liens, claims, liabilities and damages based on or arising, directly or indirectly, by reason of the making of any Alterations, which obligation shall survive the expiration or earlier termination of this Lease.

7.5          Intentionally Omitted.

7.6          Telecommunications. Tenant shall have the exclusive right to install, in accordance with Landlord’s roof installation requirements, telecommunications, HVAC, generators, and other mechanical devices on the roof of the Buildings in order to (a) serve Tenant’s needs, but such facilities shall not interfere in any way with the operations of any other tenants or occupants of the Park and shall not adversely affect any roof warranty and (b) shall comply with all provisions of this Article VII with respect to Alterations. Tenant shall further have the right to connect such facilities to available utilities and use shaft space to make the required connections. All of the foregoing shall be at Tenant’s sole cost and expense.

7.7          Building Expansions. Subject to the following provisions, Tenant shall have the right to expand at Tenant’s sole discretion, cost and expense, having the right to apply any portion of Landlord’s Contribution to such expansions if and when Tenant’s Termination Right has expired without exercise, (a) Building No. 68 by up to 5,400 rentable square feet in a single story (“Expansion 1”) and (b) Building No. 78 by (i) up to 10,600 rentable square feet in a single story (“Expansion 2”) and (ii) up to an additional 10,600 rentable square feet in a second story of the addition referenced in subsection (b)(i) (“Expansion 3”) singularly, an “Expansion” and (collectively, the “Expansions”). The Tenant’s rights to construct the Expansions shall be subject to (a) the availability of rights under all Applicable Law and all recorded documents affecting or governing the Park or any portion thereof or affecting title to the Property; (b)

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Tenant’s receipt of the following permits and approvals from the Town of Hopkinton to the extent required for Expansion 1 and Expansion 2 (collectively, the “Permits”): (1) zoning board of appeal and/or planning board approval of modification of pre-existing, non-conforming Building No. 68 and (2) sewer connection permit (or approval of current or expanded septic system(s)) sufficient to service Expansion 1 and Expansion 2; and (c) Tenant’s payment of all costs related to design, permitting, approval, implementation and construction of any Expansions and all required parking areas and other improvements which are required therefor. Tenant shall make good faith efforts to obtain the Permits and shall diligently pursue such Permits and shall provide Landlord with copies of all applications and other submittals related thereto prior to or simultaneously with delivery to the appropriate official. In the event Tenant is denied one or more of the Permits (a “Denial”), Tenant shall provide notice of such Denial to Landlord within five (5) days following such Denial. Landlord shall have the right but not the obligation to appeal such Denial to the applicable administrative or judicial entity and the right but not the obligation to prosecute such appeal through to completion at Landlord’s sole cost and expense except that Tenant agrees to cooperate in any such appeal with costs related to Tenant’s employees and consultants in connection therewith to be Tenant’s obligation (“Landlord’s Appeal Right”). In the event Tenant, despite using good faith efforts, cannot obtain the Permits, with applicable appeal periods expiring without appeal of an issued permit or approval (unless any such appeal is settled in favor of issuance of the permit or approval) by June 1, 2005 (the “Permit Target Date”), Tenant shall have the right within ten (10) days thereafter, time being of the essence thereof, to terminate this Lease by written notice to the Landlord (“Tenant’s Termination Right”); however, any such notice shall not terminate this Lease if (A) Landlord successfully obtains all necessary, remaining Permits through exercise of Landlord’s Appeal Right or otherwise on or before December 31, 2005, in which case, the Expiration Date shall remain unchanged and Tenant’s exercise of Tenant’s Termination Right shall be null and void, but the dates for completion of the Initial Work, expenditure of the Landlord’s Contribution, the SS End Date, and the Initial Expiration Date shall all be extended on a day for day basis equivalent to the number of days between the Permit Target Date and the date on which Landlord successfully obtains the last of the Permits. In the event all necessary Permits are not obtained on or before December 31, 2005, then if Tenant has timely exercised Tenant’s Termination Right, the term of the Lease shall thereafter terminate and expire on December 31, 2006 (the “Modified Expiration Date”) at which time this Lease shall terminate, Tenant shall surrender the Premises, as required in this Lease, all security deposits and letters of credit shall be returned as and when required by ARTICLE 18, and neither party shall have any further rights, responsibilities or obligations hereunder except provisions specifically stated to survive the expiration or earlier termination of this Lease. Landlord shall reasonably cooperate with Tenant in obtaining the Permits (and any permits for Expansion 3) by executing applications or documents authorizing Tenant to proceed before boards, attending hearings if necessary, and making land and/or additional parking spaces available on the Property, or on land then owned by Landlord which abuts, is adjacent to, or is in reasonable proximity with the Property, to comply with Applicable Law with respect to the Expansions, including, but not limited to floor area ratios, green space requirements, lot coverage requirements, and parking requirements; however, in no event shall Landlord be required to incur out-of-pocket costs or liability in connection with the Expansions or any of the foregoing matters related thereto or to limit its rights to further develop the Park as set forth below. Upon the construction of Expansions, Tenant shall have the right, at its sole cost and expense, to construct such parking spaces as

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aforesaid, as necessary to meet any municipal zoning parking requirements, in an area then owned by Landlord and reasonably designated by Landlord so long as such land abuts, is adjacent to, or in reasonable proximity with the Property, as local approvals may require them to be built. If any Expansion is constructed by Tenant, Base Rent during the Initial Term shall remain as set forth in Section 1.1. Upon the commencement of construction of any of the Expansions, such Expansions shall become part of the Premises for all purposes hereunder. Any further expansion of the Buildings (other than the Expansions) shall occur only upon a written amendment to this Lease as executed by Landlord and Tenant. The plans attached hereto as Exhibit A-1 depict the current proposal for the Expansions and parking area changes which are expected to be proposed to the Town of Hopkinton by Tenant.

Construction of the Expansions shall comply with all applicable provisions of this Lease, including without limitation, those relating to Alterations. The plans and specifications for the Expansions shall be subject to Landlord’s approval, which shall not be unreasonably withheld, conditioned or delayed, and the work shall be performed by a contractor or contractors approved by Landlord, which shall not be unreasonably withheld, conditioned or delayed.

Tenant acknowledges that Landlord may elect to obtain permits and/or construct additional buildings and/or building additions in the Park and that obtaining such permits and/or construction of the same may adversely affect Tenant’s ability to obtain permits and/or construct one or more of the Expansions because of the reduction of available land required to comply with zoning and other regulatory requirements. Notwithstanding the foregoing, Landlord agrees that Landlord will take no action to obtain, or to permit any other party to obtain, a building permit for any such additional building and/or building addition prior to January 1, 2006 if the same would have such an adverse effect.

ARTICLE 8
ASSIGNMENT AND SUBLETTING

8.1          Prohibition. Tenant covenants and agrees that, except as permitted herein, neither this Lease nor the estate hereby granted, nor any interest herein or therein, will be assigned (collaterally, conditionally or otherwise), mortgaged, pledged, encumbered or otherwise transferred, whether voluntarily, involuntarily, by operation of law or otherwise, and that neither the Premises nor the Property, nor any part thereof, will be encumbered in any manner by reason of any act or omission on the part of Tenant, or be sublet (which term, without limitation, shall include granting of concessions, licenses, use and occupancy agreements and the like) in whole or in part, without in each case, the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned, or delayed provided that any such assignee or subtenant agrees directly with Landlord, by written instrument in form satisfactory to Landlord in its reasonable discretion, to be bound by all obligations of Tenant under this Lease (with respect only to the subleased premises in the case of a sublease), including without limitation, the covenant limiting assignment and subletting and containing such other provisions as are consistent with this Lease. Tenant further agrees that notwithstanding any assignment or sublet of any or all of Tenant’s interest in this Lease (irrespective of whether or not Landlord’s consent is required therefor), Tenant shall remain fully and primarily liable for the payment and performance of its obligations hereunder, and in the case of assignment such liability shall be joint and several with such assignee or assignees from time to time. Any consent by Landlord to

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a particular assignment, sublease or occupancy or other act, from time to time, for which Landlord’s consent is required pursuant to this ARTICLE 8, and any provision of this Lease which permits an assignment, sublease or occupancy or other act without Landlord’s consent shall not in any way diminish the prohibition stated in this Section 8.1 as to any such further assignment, sublease or occupancy or other act or the continuing liability of the original named Tenant or of any assignee from time to time. Assignment of the Lease or a sublease of all or a portion of the Premises to a parent, affiliate, or subsidiary of Tenant shall be permitted hereunder without the consent of Landlord. Any assignee or subtenant shall be obligated to enter into a written instrument in form satisfactory to Landlord in its reasonable discretion agreeing to be bound by all obligations of Tenant under this Lease (with respect only to the subleased premises in the case of a sublease), including without limitation, the covenant against further assignment and subletting.

8.2          Additional Events Deemed to be Assignment/Sublet. Without limiting the foregoing, each of the following events shall, for all purposes hereof, be deemed to be an assignment/sublet of this Lease and shall be subject to the provisions of this ARTICLE 8: (i) Tenant entering into any agreement pursuant to which a third party undertakes or is granted by or on behalf of Tenant the right to assign or attempt to assign this Lease or to sublet or attempt to sublet all or any portion of the Premises; (ii) the transfer (by one or more transfers) of a controlling portion of or interest in (meaning more than fifty percent (50%)) of the voting rights or stock or partnership or membership interests or other evidences of equity interests of Tenant; provided, however, that a transfer (i) of equity interests in Tenant on a nationally recognized public stock exchange, (ii) of all or a portion of the equity interest of Tenant to a parent, affiliate, or subsidiary of Tenant, (iii) of all or substantially all the equity interests of Tenant arising from a merger of Tenant with another entity or acquisition of Tenant by another entity, or (iv) of all or substantially all of the assets of Tenant to another entity shall not be deemed an assignment for which Landlord’s consent is required within the meaning of this ARTICLE 8.

8.3          Provisions Incorporated Into Sublease. Any sublease of all or a portion of the Premises shall be deemed to include the following provisions (notwithstanding any provision of the sublease to the contrary) and such provisions shall be deemed included in any Landlord consent agreement: (i) the term of the sublease must end no later than one day before the last day of the Term of this Lease; (ii) no sublease shall be valid, and no sublessee shall take possession of all or any part of the Premises until a fully executed counterpart of such sublease has been delivered to Landlord; (iii) such sublease is subject and subordinate to this Lease and the provisions hereof; and (iv) in the event of termination of this Lease for any reason or reentry or repossession of the Premises by Landlord, Landlord may, in its sole discretion and option, take over and assume all of the right, title and interest of Tenant, as sublessor under such sublease, whereupon, from and after notice thereof given by Landlord to such sublessee, such sublessee shall attorn to Landlord and pay rent and perform all obligations of such sublessee under such sublease for the full term of such sublease directly to Landlord, such sublease, from and after such notice, constituting a direct lease between Landlord and such sublessee; provided, however, that Landlord shall not (A) be liable for any previous act or omission of Tenant under such sublease; (B) be subject to any credit, claim, defense or offset previously accrued in favor of such sublessee against Tenant; (C) be bound by any previous modification of such sublease made without Landlord’s prior written consent or by any previous prepayment of more than one (1) month’s rent; or (D) be required to account for, or be responsible for, any security deposit not

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actually delivered to Landlord, and then, only to the extent not previously applied to amounts due. If a Default of Tenant occurs and Landlord elects to take over all of the right, title and interest of Tenant as sublessor under such sublease and to cause such sublessee to attorn to Landlord, all as provided above, then for the purposes of the foregoing provisions of this ARTICLE 8 only, by execution of a sublease, each such subtenant shall be deemed to have agreed that such subtenant and Landlord shall be in privity of contract with each other.

8.4         Collection of Rent. If Tenant assigns its interest under this Lease, or sublets or allows occupancy of the Premises or any part thereof by any party other than Tenant, whether or not in violation of the terms and conditions of this ARTICLE 8, Landlord may, at any time and from time to time, collect rent and other charges from any assignee and only from and after a Default of Tenant from any sublessee or occupant, and apply the net amount collected to the Rent and other charges herein reserved, but no such assignment, sublease, occupancy, collection or modification of any provisions of this Lease shall be deemed a waiver of this covenant, or the acceptance of the assignee, sublessee or occupant as a tenant or a release of Tenant from the payment and further performance of obligations on the part of Tenant to be performed hereunder.

8.5          Excess Payments. If Tenant assigns its interest under this Lease or sublets or otherwise permits occupancy of the Premises or any portion thereof, Landlord shall be entitled to an amount equal to fifty percent (50%) of all Profits (as defined below). As used herein, the term “Profits” means the amount, if any, by which (a) all compensation received by Tenant as a result of such assignment or sublease, or other occupancy, net of (a) reasonable expenses actually incurred by Tenant in connection with such assignment or sublease or other occupancy with such reasonable expenses to be amortized without interest over the remaining Term (or, with respect to fit-up costs, the useful life thereof, if greater than the remaining Term) (the “Amortized Costs”) and (b) up to $1,600,000 in the aggregate of hard construction costs actually paid out of pocket by Tenant between the date hereof and December 31, 2005 only for Initial Work and work related to the Expansions (with evidence reasonably satisfactory to Landlord with respect to such actual out of pocket payments having been delivered to Landlord by December 31, 2006) as ratably amortized without interest over the remaining Term, specifically excluding Landlord’s Contribution and allowance under Section 5.2, and with such Amortized Costs and such excess payments to be recalculated upon any extension or renewal of the Term hereof, exceeds (b) in the case of an assignment, the Rent under this Lease, and in the case of a sublease or other occupancy, the portion of the Rent allocable to the portion of the Premises subject to such subletting or other occupancy. Together with Tenant’s notice and/or request for Landlord’s consent to such assignment or sublet, Tenant shall deliver to Landlord a schedule of anticipated Profits and a schedule of anticipated Amortized Costs. All payments due pursuant to this Section 8.5 shall be made on a monthly basis concurrently with Tenant’s payment of Basic Rent hereunder. Landlord shall have the right, upon five (5) days prior written notice to Tenant, to review Tenant’s books and records with respect to such excess payments at no out-of-pocket cost to Tenant. Notwithstanding the foregoing, the provisions of this Section 8.5 shall impose no obligation on Landlord to consent to any assignment/subletting/occupancy with respect to this Lease.

8.6          Payment of Landlord’s Costs. Tenant shall reimburse Landlord on demand, as Additional Rent, for any out-of-pocket costs (including reasonable Attorneys’ Fees and expenses) incurred by Landlord in connection with each actual or proposed assignment, sublease,

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occupancy agreement, or other act described in Section 8.1 or Section 8.2 or other request for approval or execution of any document whatsoever whether or not consummated, including without limitation, the costs of making investigations as to the acceptability of a proposed assignee, sublessee or occupant. Tenant shall have the right, upon five (5) days prior written notice to Landlord, to review Landlord’s books and records with respect to such out-of-pocket costs at no out-of-pocket cost to Landlord.

8.7          Conditions to Effectiveness of Assignment/Sublet. Any assignment, sublease or occupancy agreement shall not be valid or binding on Landlord and no assignee, sublessee or occupant shall take possession of all or any portion of the Premises unless and until (i) Tenant, Landlord and the assignee, sublessee, or occupant have each executed a consent agreement, in form and substance satisfactory to Landlord (which consent agreement shall provide, among other things, that said assignee, sublessee or occupant agrees to be independently bound by and upon all of the covenants, agreements, terms, provisions and conditions set forth in this Lease on the part of Tenant to be kept and performed, except in the event of a sublease of only a portion of the Premises, in which case such obligations shall only apply to the portion being sublet, and shall otherwise comply with this ARTICLE 8), (ii) Tenant has delivered to Landlord a fully executed counterpart of such assignment, sublease or occupancy agreement acceptable to Landlord, together with a final schedule of expected Profits and a final schedule of expected Amortized Costs, (iii) Tenant has paid to Landlord any sums required pursuant to Section 8.6 hereof, and (iv) Tenant has delivered to Landlord evidence (in the form of a certificate of insurance using Acord 27 or equivalent) of compliance by the assignee/sublessee with the insurance provisions of this Lease.

ARTICLE 9
MAINTENANCE, REPAIRS AND REPLACEMENTS

9.1          Landlord’s Obligations. Except as otherwise provided in this Lease, Landlord agrees to (i) keep the parking lots and driveways in good condition, properly lit, and reasonably free of snow and ice, (ii) keep and maintain all landscaped areas in the outdoor portions of the Property in a neat and orderly condition, (iii) maintain, repair and replace the Structure of the Buildings excluding the Alterations; provided, however, that Tenant (and not Landlord) shall be responsible with respect to any condition caused by or related to (A) any misconduct or neglect of Tenant, its Agents, invitees or independent contractors, or (B) the Alterations or Tenant’s Removable Property. As used herein, the term “Structure” means the exterior walls, load bearing portions of the walls, columns, beams, concrete slab, footings, structural beams of the roof, and all Landlord Utilities, as defined in Section 10.2 in each case as necessary to preserve the load bearing capacity thereof, Landlord also shall not be responsible for any maintenance, repair or replacement at the Premises other than as expressly set forth in this Section 9.1.

Provided Tenant complies with its repair and maintenance obligations under this Lease and its obligations under Section 5.2, Landlord shall, at its expense, make any necessary replacements of the roof and the rooftop HVAC units as required in Landlord’s reasonable determination, in the case of the roof, in order to maintain the roof in a watertight condition and, in the case of the rooftop HVAC units, to provide substantially the levels of heating, ventilating and air conditioning which the same provide as of the date hereof.

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All of the costs of Landlord pursuant to this ARTICLE 9 shall be included in Operating Expenses, including without limitation, capital replacements, as set forth in Exhibit B, Paragraph 6 unless specifically excluded from Operating Expenses pursuant to the provisions of Exhibit B.

Landlord shall never be liable for any failure to perform any of its maintenance, repair or replacement obligations under this Lease unless Tenant has given notice to Landlord of the need to perform the same, and Landlord fails to commence to perform the same within a reasonable time thereafter, or fails to proceed with reasonable diligence to complete such performance.

9.2         Tenant’s Obligations.

(a)           Except to the extent specifically required of Landlord under Section 9.1, Tenant will keep the Premises and every part thereof neat and clean including without limitation arranging for trash removal and disposal with respect thereto. Tenant further agrees to keep in good order, condition and repair (including replacement of) each and every part of the Premises, including without limitation, window glass, the roof (excluding the structural beams thereof and excluding the replacement of the roof to the extent that the same is Landlord’s obligation under Section 9.1 after the initial replacement thereof by Tenant under Section 5.2) and all Building Systems (excluding replacement of the rooftop HVAC units to the extent that the same is Landlord’s obligation under Section 9.1), and all Tenant Utilities, as defined in Section 10.2 and all other improvements at the Premises, and Tenant shall surrender the Premises to Landlord, at the end of the Term, in such condition, subject to normal wear and tear to carpeting and painted interior surfaces. Without limitation, Tenant shall comply with Applicable Law and the standards recommended by the local Board of Fire Underwriters applicable to Tenant’s use and occupancy of the Premises, and shall, at Tenant’s expense, timely obtain all permits, licenses and the like required thereby.

(b)           Tenant shall, at its sole cost and expense, obtain and at all times during the Term hereof maintain in full force and effect, a service contract in form and substance reasonably satisfactory to Landlord for the maintenance of the HVAC system serving the Premises, which service contract shall cover replacement of component parts, and Tenant shall deliver to Landlord a copy of such HVAC service contract promptly upon the execution hereof, but such requirement shall not be deemed to limit or otherwise affect Tenant’s obligation to maintain, repair and replace any supplemental HVAC equipment installed by Tenant, including without limitation, HVAC equipment for server rooms which shall be Tenant’s sole responsibility.

(c)             If either party is required to repair, replace or maintain any portion of the Buildings pursuant to the provisions of this Lease and fails to commence to perform such act within ten (10) Business Days’ after written notice from the other party, or fails to complete such act so commenced within thirty (30) days of said notice or such longer period as may be reasonably required so long as such work is being diligently conducted (except that no notice shall be required in the event of an emergency), the other party may perform such act (but shall not be required to do so), and in the case of Tenant failure, the provisions of Section 19.2(f) (“Remedying Defaults”) shall be applicable to the costs thereof, and in the case of Landlord failure, Landlord shall be responsible to reimburse Tenant for the costs of such work except to

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the extent that such costs would have been included in Operating Expenses. The party thereafter performing the work shall not be responsible to the party failing to perform the work for any loss or damage whatsoever that may accrue to such party’s stock or business or property by reason of properly performing such acts.

(d)           Tenant, shall, at its sole cost and expense, arrange and pay for cleaning and janitorial services for the Premises, substantially in accordance with the cleaning standards from time to time in effect for the Buildings.

ARTICLE 10
UTILITIES AND OTHER SERVICES

10.1        Heating, Ventilation and Air-Conditioning. Except as set forth in Section 9.1 above, Tenant and not Landlord shall furnish all heating and cooling for the Premises as required by Tenant for the comfortable occupancy thereof, but at a minimum Tenant shall furnish sufficient heating to the Premises to prevent any damage to the Property, including without limitation, the freezing of pipes.

10.2        Utilities.

(a)           General. Landlord shall be responsible for the following (collectively, the “Landlord Utilities”): all electricity, natural gas (if any), water, and septic service lines from the property line of the Park up to their entry point into the Buildings (the “Utility Switching Points”), and Tenant shall be responsible for such utilities from the Utility Switching Points into and throughout the Premises and for all oil supplies, telecommunications and other utility services, modifications made to the Landlord Utilities after the date hereof, and any new utilities, including without limitation, sewer service, installed after the date hereof (collectively, “Tenant Utilities”). All utility services shall be separately metered, and Tenant shall pay all charges therefor directly to the utility provider. Notwithstanding the foregoing, electrical service for the Premises shall also be governed by the provisions of subsections (b), (c), and (d) below.

(b)           Electricity; Arrangement/Metering. Tenant shall pay all charges for utilities directly to the utility provider. Upon prior notice and approval by Landlord, Tenant may supplement and/or modify Landlord’s existing wires, risers, conduits and other electrical equipment of Landlord serving the Premises. Any additional feeders or risers to supply Tenant’s, or any subtenant’s, electrical requirements in addition to those originally installed and all other equipment proper and necessary in connection with such feeders or risers, shall be installed by and at the sole cost and expense of Tenant, provided that such additional feeders and risers are permissible under Applicable Law and insurance regulations and the installation of such feeders or risers will not cause permanent damage or injury to the Buildings or cause or create a dangerous condition or unreasonably interfere with other tenants of the Buildings. Tenant agrees that it will not make any material alteration or material addition to the electrical equipment and/or appliances in the Premises without the prior written consent of Landlord, which consent will not be unreasonably withheld, conditioned or delayed.

(c)           Capacity. Tenant warrants and represents to Landlord that its electrical demand requirement shall not adversely affect the Buildings’ electrical system. Tenant’s use of

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electrical energy in the Premises shall not at any time exceed the maximum capacity permitted from time to time under Applicable Law or the capacity of any of the electrical conductors and equipment in or otherwise serving the Premises and Tenant shall repair any damage caused by Tenant’s failure to observe such requirements. Any additional feeders or risers necessary to supply electricity to the Premises in addition to those originally installed and all other equipment proper and necessary in connection with such feeders or risers, shall be installed by Tenant at its sole cost and expense, provided that such additional feeders and risers and other equipment are permissible under Applicable Law and insurance regulations and the installation of such feeders or risers will not cause permanent damage or injury to the Buildings or cause or create a dangerous condition. Tenant agrees that it will not make any material alteration or material addition to the electrical equipment and/or appliances in the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.

(d)           No Landlord Liability. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electrical energy furnished to the Premises by reason of any requirement, act or omission of the public or other utility serving the Buildings with electricity unless due to the act or omission of Landlord or Landlord’s Agents or independent contractors. Landlord shall not be liable or responsible to Tenant for any loss, damage or expense that Tenant may sustain or incur if the quantity, character or supply of electrical energy is changed or is no longer available or suitable for Tenant’s requirements.

(e)           Interruption of Service. Landlord reserves the right to curtail, suspend, interrupt and/or stop the supply and/or flow of water, sewage, electrical current, and other services, and to curtail, suspend, interrupt and/or stop use of entrances and/or lobbies serving as access to the Buildings, or other portions of the Property, provided that, except in the event of any emergency, Landlord shall provide Tenant with at least seven (7) days prior notice before taking any such action, without thereby incurring any liability to Tenant, when necessary or advisable, in Landlord’s judgment, by reason of accident or emergency, or for repairs, alterations, replacements or improvements necessary or advisable, in Landlord’s judgment, or when prevented from supplying such services or use due to any act or neglect of Tenant or Tenant’s Agents, invitees or independent contractors or any person claiming by, through or under Tenant or by Force Majeure. No diminution or abatement of Basic Rent or Additional Rent, nor any direct, indirect or consequential damages shall be claimed by Tenant as a result of, nor shall this Lease or any of the obligations of Tenant hereunder be affected or reduced by reason of, any such interruption, curtailment, suspension or stoppage in the furnishing of the foregoing services or use, irrespective of the cause thereof. Failure or omission on the part of Landlord to furnish any of the foregoing services or use as provided in this ARTICLE 10 shall not be construed as an eviction of Tenant, actual or constructive, nor entitle Tenant to an abatement of Basic Rent or Additional Rent, nor render the Landlord liable in damages, nor release Tenant from prompt fulfillment of any of its covenants under this Lease.

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ARTICLE 11

REAL ESTATE TAXES

11.1      Payments on Account of Real Estate Taxes.

(a)           “Tax Year” shall mean a twelve (12) month period commencing on July 1 and falling wholly or partially within the Term, and “Taxes” shall mean: (i) all taxes, assessments (special or otherwise), betterments, levies, fees and all other government levies, exactions and charges of every kind and nature, general and special, ordinary and extraordinary, foreseen and unforeseen, which are, at any time prior to or during the Term, imposed or levied upon or assessed against the Property, including without limitation, any Expansions, or any portion thereof or against the Park or any portion thereof, or against any Basic Rent, Additional Rent or other rent of any kind or nature payable to Landlord by anyone on account of the ownership, leasing or operation of the Property and any portion thereof, or which arise on account of or in respect of the ownership, development, leasing, operation or use of the Property or any portion thereof or the Park or any portion thereof; (ii) all gross receipts taxes or similar taxes imposed or levied upon, assessed against or measured by any Basic Rent, Additional Rent or other rent of any kind or nature or other sum payable to Landlord by anyone on account of the ownership, development, leasing, operation, or use of the Property or any portion thereof or the Park or any portion thereof; (iii) all value added, use and similar taxes at any time levied, assessed or payable on account of the ownership, development, leasing operation, or use of the Property or any portion thereof or the Park or any portion thereof; and (iv) reasonable expenses of any proceeding for abatement of any of the foregoing items included in Taxes; but the amount of special taxes or special assessments included in Taxes shall be limited to the amount of the installment (plus any interest, other than penalty interest, payable thereon) of such special tax or special assessment required to be paid during the year in respect of which such Taxes are being determined. There shall be excluded from Taxes: (A) all income, estate, succession, franchise, inheritance and transfer taxes of Landlord; provided, however, that if at any time during the Term the present system of ad valorem taxation of real property shall be changed so that a capital levy, franchise, income, profits, sales, rental, use and occupancy, excise or other tax or charge shall in whole or in part be substituted for, or added to, such ad valorem tax and levied against, or be payable by, Landlord with respect to the Property or any portion thereof or the Park or any portion thereof, such tax or charge shall be included in the term “Taxes” for the purposes of this Article; (B) any item to the extent otherwise included in Operating Expenses; (C) any environmental assessments, charges or liens arising in connection with the remediation of Hazardous Materials from the Premises or Buildings, the causation of which arose (1) prior to the Commencement Date of the Prior Leases, or (2) after the Commencement Date of the Prior Leases, to the extent not caused by Tenant or Tenant’s Agents, independent contractors or invitees or Zymark or Zymark’s Agents, independent contractors or invitees or Tenant’s or Zymark’s sublessees or assignees; (D) costs or fees payable to public authorities separate from the ordinary tax bill in connection with any future construction, renovation and/or improvements by Landlord within the Park other than the Expansions or the Initial Work, including exactions for transit, housing, schools, open space, child care, arts programs, environmental impact reports, traffic studies, and transportation system management plans; and (E) reserves for future Taxes, except as set forth in subsection (c) below. Additionally, interest and penalties incurred as a result of Landlord’s late payment of Taxes shall not be included in the definition of Taxes unless Tenant was late in its payment of Taxes to Landlord. Because the Property is commonly assessed with other real property, Taxes shall include only Taxes on the Property and the Property’s proportionate share of any Park tax assessment not attributable to a particular building based upon the ratio of the rentable square footage of the Premises Rentable Area from time to

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time to the rentable square footage of all of the Buildings on all of the real property in the Park from time to time (the “Park Share”).

(b)           For the portion of the Term through and including June 30, 2005, Tenant shall pay taxes in accordance with the Prior Leases, the provisions of which are incorporated herein by this reference for such purpose and from and after the commencement of Fiscal Year 2006, that is, July 1, 2005, Tenant shall pay to Landlord, as Additional Rent, Tenant’s Proportionate Share of Taxes, such amount to be apportioned for any portion of a Tax Year in which the Term Commencement Date falls or the Term expires.

(c)           Estimated payments by Tenant for Taxes shall be made on the first day of each and every calendar month during the Term of this Lease, in the fashion herein provided for the payment of Basic Rent. Tenant’s monthly estimated payment for Taxes shall be sufficient to provide Landlord with a sum equal to 1/12 of Tenant’s required payment for Taxes for the then current Tax Year, as reasonably estimated by Landlord from time to time. Once annually, Landlord shall advise Tenant of the amount of the tax bills for the prior Tax Year and the computation of Tenant’s required payment for Taxes. If estimated payments for Taxes theretofore made by Tenant for the Tax Year covered by such bills exceed the required payment for Taxes for such Tax Year, Landlord shall credit the amount of overpayment against subsequent obligations of Tenant for Taxes (or promptly refund such overpayment if requested by Tenant, or if the Term of this Lease has ended and Tenant has no further obligation to Landlord); but if the required payments for Taxes for such Tax Year are greater than estimated payments for Taxes theretofore made for such Tax Year, Tenant shall pay the difference to Landlord as Additional Rent within thirty (30) days after being so advised by Landlord in writing, and the obligation to make such payment for any period within the Term shall survive expiration or earlier termination of the Term.

11.2        Abatement. If Landlord shall receive any tax refund or reimbursement of Taxes or sum in lieu thereof (a “Tax Refund”) with respect to any Tax Year all or any portion of which falls within the Term, then out of any balance remaining of the Tax Refund, after deducting Landlord’s expenses in obtaining same unless such expenses have been paid by Tenant, Landlord shall pay to Tenant, provided there does not then exist a Default of Tenant, an amount equal to such Tax Refund apportioned if such refund is for a Tax Year a portion of which falls outside the Term) multiplied by Tenant’s Proportionate Share; provided, that in no event shall Tenant be entitled to receive more than the payments for Taxes made by Tenant for such Tax Year pursuant to subsection (b) of Section 11.1.

ARTICLE 12
OPERATING EXPENSES

12.1      Definitions.

(a)           “Operating Year” shall mean each calendar year all or any part of which falls within the Term; and

(b)           “Operating Expenses” shall mean the aggregate costs and expenses incurred by Landlord with respect to the operation, administration, cleaning, repair, replacement,

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maintenance and management of the Property and Tenant’s Park Share as defined in Section 11.1, of Park costs and expenses, including without limitation, as set forth in Exhibit B attached hereto, provided that if during any portion of the Operating Year for which Operating Expenses are being computed, less than all of the Buildings was occupied by tenants or Landlord was not supplying all tenants with the services being supplied under this Lease, actual Operating Expenses incurred shall be extrapolated reasonably by Landlord on an item by item basis to the estimated Operating Expenses that would have been incurred if the Buildings were fully occupied for such Operating Year and such services were being supplied to all tenants, and such extrapolated amount shall, for the purposes hereof, be deemed to be the Operating Expenses for such Operating Year.

12.2      Tenant’s Payment of Operating Expenses.

(a)           For the portion of the Term through and including December 31, 2005, Tenant shall pay Operating Expenses and other Additional Rent in accordance with the Prior Leases, the provisions of which are incorporated herein by this reference for such purpose, and from and after January 1, 2006, Tenant shall pay to Landlord, as Additional Rent, an amount equal to Operating Expenses multiplied by Tenant’s Proportionate Share, such amount to be apportioned for any portion of an Operating Year in which the Term Commencement Date falls or the Term expires.

(b)           Estimated payments by Tenant for Operating Expenses shall be made on the first day of each and every calendar month during the Term of this Lease, in the fashion herein provided for the payment of Basic Rent. The monthly amount so to be paid to Landlord shall be sufficient to provide Landlord by the end of each Operating Year a sum equal to Tenant’s required payment for Operating Expenses for such Operating Year, as reasonably estimated by Landlord from time to time during each Operating Year. Within one hundred fifty (150) days after the end of each Operating Year, Landlord or Landlord’s Agent shall submit to Tenant a reasonably detailed statement of Operating Expenses for the prior Operating Year, and Landlord or Landlord’s Agent shall certify to the accuracy thereof. If estimated payments for Operating Expenses theretofore made by Tenant for such Operating Year exceed Tenant’s required payment for Operating Expenses for such Operating Year according to such statement, Landlord shall credit the amount of overpayment against subsequent obligations of Tenant with respect to Operating Expenses (or promptly refund such overpayment if requested by Tenant or if the Term of this Lease has ended and Tenant has no further obligation to Landlord); but if the required payments for Operating Expenses for such Operating Year are greater than the estimated payments (if any ) theretofore made by Tenant for Operating Expenses for such Operating Year, Tenant shall pay to Landlord, as Additional Rent, within thirty (30) days after being so advised by Landlord in writing, the difference between the estimated and required Operating Expense Payments, and the obligation to make such payment for any period within the Term shall survive the expiration or earlier termination of the Term.

(c)           Tenant shall have the right to examine, copy and audit Landlord’s books and records establishing Operating Expenses for any Operating Year for a period of one (1) year following the date that Tenant receives the statement of Operating Expenses for such Operating Year from Landlord. Tenant shall give Landlord not less than thirty (30) days’ prior notice of its intention to examine and audit such books and records, and such examination and audit shall take

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place at such place within the continental United States as Landlord routinely maintains such books and records, unless Landlord elects to have such examination and audit take place in another location designated by Landlord in the city and state in which the Property is located. Any such audit shall be conducted by a certified public accountant, and all costs of the examination and audit shall be borne by Tenant; provided, however, that if such examination and audit establishes that the actual Operating Expenses for the Operating Year in question are less than the amount set forth as the annual Operating Expenses on the annual statement delivered to Tenant by at least five percent (5%), then Landlord shall pay the reasonable costs of such examination and audit. If, pursuant to the audit, the payments made for such Operating Year by Tenant exceed Tenant’s required payment on account thereof for such Operating Year, Landlord shall credit the amount of overpayment against subsequent obligations of Tenant with respect to Operating Expenses (or promptly refund such overpayment if the Term of this Lease has ended and Tenant has no further obligation to Landlord); but, if the payments made by Tenant for such Operating Year are less than Tenant’s required payment as established by the examination and audit, Tenant shall pay the deficiency to Landlord within thirty (30) days after conclusion of the examination and audit, and the obligation to make such payment for any period within the Term shall survive expiration of the Term. Tenant shall not be permitted to engage an auditor which is paid on a contingency or percentage basis unless Landlord approves of such auditor in writing either prior to or after the execution of this Lease. Landlord hereby pre-approves the Tenant’s use of RRG and P. Stevens Associates, Inc. If Tenant does not elect to exercise its right to examine and audit Landlord’s books and records for any Operating Year within the time period provided for by this paragraph, Tenant shall have no further right to challenge Landlord’s statement of Operating Expenses.

12.3        Triple Net Lease. This Lease is a triple net lease and it is intended that, except where specifically provided herein, Tenant, and not Landlord, shall bear the costs incurred in connection with the Property, and Tenant’s Park Share of the costs incurred in connection with the Park, and all costs and expenses incurred in connection with the Premises.

ARTICLE 13
INDEMNITY AND INSURANCE

13.1        Tenant’s Indemnity. Except to the extent arising from the gross negligence or willful misconduct of Landlord or Landlord’s Agents, Tenant agrees to indemnify and save harmless Landlord and Landlord’s Agents from and against all claims, losses, cost, damages, liabilities or expenses of whatever nature arising: (i) from any accident, injury or damage whatsoever to any person, or to the property of any person, occurring in or about the Premises; (ii) from any accident, injury or damage whatsoever to any person, or to property of any person, occurring outside of the Premises but on or about the Property, where such accident, damage or injury results or is claimed to have resulted from any act or omission on the part of Tenant or Tenant’s Agents, invitees or independent contractors; (iii) from the use or occupancy of the Premises or of any business conducted therein, and, in any case, occurring (A) after the Term Commencement Date until the Expiration Date or earlier termination of the Term of this Lease, and (B) thereafter so long as Tenant is in occupancy of all or any part of the Premises; or (iv) from any default or breach by Tenant or Tenant’s Agents under the terms or covenants of this Lease. This indemnity and hold harmless agreement shall include indemnity against all losses, costs, damages, expenses and liabilities incurred in or in connection with any such claim or any

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proceeding brought thereon, and the defense thereof, including, without limitation, reasonable Attorneys’ Fees and costs at both the trial and appellate levels. The provisions of this Section 13.1 shall survive the expiration or earlier termination of this Lease, regardless of the cause of such expiration or earlier termination.

13.2      Tenant’s Insurance.

(a)           Commercial General Liability. Tenant agrees to maintain in full force from the date upon which Tenant first enters the Premises for any reason, throughout the Term of this Lease, and thereafter so long as Tenant is in occupancy of all or any part of the Premises, a policy of commercial general liability insurance (using the current Insurance Services Offices (“ISO”) form) under which the insurer agrees to indemnify, defend with counsel satisfactory to Landlord, and hold Landlord, Landlord’s Managing Agent, and those in privity of estate with Landlord, harmless from and against all cost, expense and/or liability arising out of or based upon any and all claims, accidents, injuries and damages set forth in Section 13.1.

(b)           Property Damage Insurance. Tenant agrees to maintain in full force from the date hereof, throughout the Term of this Lease, and thereafter so long as Tenant is in occupancy of all or any part of the Premises, a policy of property damage insurance (ISO Causes of Loss – Special Form) with a business income endorsement and a utility services – time element endorsement, under which the insurer agrees to indemnify, defend with counsel satisfactory to Landlord, and hold Landlord, Landlord’s Managing Agent, and those in privity of estate with Landlord, harmless from and against all cost, expense and/or liability arising out of or based upon any and all claims, accidents, injuries and damages set forth in Section 13.1.

(c)           Insureds/Umbrella Policy. With respect to the above-referenced commercial general liability and property insurance policies:

(i)            Insured/Named Insureds. Tenant shall be named as an insured and Landlord, Landlord’s Managing Agent and such other persons as are in privity of estate with Landlord as may be set out in a notice to Tenant from time to time, shall named as additional insureds; and

(ii)             Umbrella Policy. Tenant may satisfy such insurance requirements by including the Premises in a so-called “blanket” and/or “umbrella” insurance policy, provided that the amount of coverage allocated to the Premises shall fulfill the requirements set forth herein. Tenant’s commercial general liability insurance policy shall be written on an “occurrence” basis, and shall be in at least the amounts of the General Liability Insurance specified in Section 1.1 or such greater amounts as Landlord in its reasonable discretion shall from time to time request.

(d)           Tenant Casualty Insurance. Tenant agrees to maintain in full force from the date upon which Tenant first enters the Premises for any reason, throughout the Term of this Lease, and thereafter so long as Tenant is in occupancy of all or any part of the Premises, property insurance (ISO Causes of Loss – Special Form) on a “replacement cost” basis, insuring Tenant’s Removable Property, the Initial Work and any Alterations made by Tenant pursuant to ARTICLE 7, to the extent that the same have not become the property of Landlord. During the

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construction of any Expansion, Tenant shall, upon billing therefor, pay to Landlord the cost of any endorsement to any insurance policy of Landlord with respect to builder’s risk completed value non-reporting form (including without limitation all risk, fire, earthquake and extended coverage (including collapse, contract demolition, removal of debris and increased cost of construction)).

(e)             Tenant’s General Insurance Requirements. Each policy required hereunder shall be non-cancelable and non amendable with respect to Landlord, Landlord’s Managing Agent and Landlord’s said designees without twenty (20) days’ prior written notice to Landlord. With respect to all insurance which Tenant is required to carry hereunder. Tenant shall, prior to entering the Premises for any reason, deliver to Landlord a duplicate original policy or a certificate of insurance reasonably satisfactory to Landlord, together with a photocopy of the entire policy, with respect thereto.

(f)              Tenant’s Risk. Tenant agrees to use and occupy the Premises, and to use such other portions of the Property as Tenant is herein given the right to use, at Tenant’s own risk. Landlord shall not be liable to Tenant, or Tenant’s Agents, contractors or invitees for any damage, injury, loss, compensation, or claim (including, but not limited to, claims for the interruption of or loss to Tenant’s business) based on, arising out of or resulting from any cause whatsoever, including, but not limited to, repairs to any portion of the Premises or the Property, any fire, robbery, theft, mysterious disappearance and/or any other crime or casualty, the actions of any other tenants of the Park or of any other person or persons, or any leakage in any part or portion of the Premises or the Buildings, or from water, rain or snow that may leak into, or flow from any part of the Premises or the Buildings, or from drains, pipes or plumbing fixtures in the Buildings, except for personal injury to Tenant’s Agents, invitees and independent contractors when due to the gross negligence or willful misconduct of Landlord or Landlord’s Agents. Any goods, property or personal effects stored or placed in or about the Premises shall be at the sole risk of Tenant, and neither Landlord nor Landlord’s insurers shall in any manner be held responsible therefor. In no event shall Landlord be liable to Tenant for any indirect or consequential damages resulting from Landlord’s acts or omissions.

13.3        Waiver of Subrogation. The parties hereto shall each procure an appropriate clause in, or endorsement to, any property insurance policy on the Premises or any personal property, fixtures or equipment located thereon or therein, pursuant to which the insurer waives subrogation or consents to a waiver of right of recovery in favor of either party and its respective Agents. Having obtained such clauses and/or endorsements, each party hereby agrees that it will not make any claim against or seek to recover from the other or its Agents for any loss or damage to its property or the property of others resulting from fire or other perils covered by such property insurance.

13.4        Landlord Insurance. Landlord shall maintain the following insurance, and such other insurance as it elects, during the Term of this Lease:

(a)           Worker’s Compensation insurance as required by any applicable law or regulation and in accordance with the laws of the state, territory or province having jurisdiction over each party’s employees and Employer’s Liability insurance with limits of One Million Dollars ($1,000,000).

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(b)             Commercial general liability insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or per claim and Two Million Dollars ($2,000,000.00) in the annual aggregate. Such insurance shall provide coverage for (a) bodily injury, property damage, personal injury and advertising injury, (b) contractual liability, not only for bodily injury and property damage, but also for personal injury and advertising injury, and (c) cross liability. Such insurance shall include Tenant as additional insureds, but only to the extent of liabilities falling within the indemnity obligations of a Named Insured. The additional insureds shall include Landlord’s employees and agents,. If such insurance is maintained on a claims-made basis, then such insurance shall be maintained for an additional period of three years after termination of this Lease and any extension thereof.

(c)          Business Automobile Liability insurance covering all owned, rented (hired) and non-owned vehicles used in connection with this Lease or the Premises. Such insurance shall have limits of One Million Dollars ($1,000,000) each accident for bodily injury and property damage.

(d)         Landlord agrees to maintain in full force and effect, during the Term of this Lease, property damage insurance with such deductibles and in such amounts as may from time to time be carried by reasonably prudent owners of similar buildings in the area in which the Property is located, provided that in no event shall Landlord be required to carry other than fire and extended coverage insurance or insurance in amounts greater than 80% of the actual insurable cash value of the Building (excluding footings and foundations). Landlord may satisfy such insurance requirements by including the Property in a so-called “blanket” insurance policy, provided that the amount of coverage allocated to the Property shall fulfill the foregoing requirements.

(e)          Upon Tenant’s written request from time to time, Landlord shall deliver to Tenant a duplicate original policy or a certificate of insurance reasonably satisfactory to Tenant, together with a photocopy of the entire policy, with respect thereto.

ARTICLE 14
FIRE, EMINENT DOMAIN, ETC.

14.1        Landlord’s Right of Termination. If (a) the Premises or any Building is substantially damaged by fire or casualty (the term “substantially damaged” meaning damage of such a character that the same cannot, in the ordinary course, reasonably be expected to be repaired within nine (9) months from the time that repair work would commence), or (b) the Premises or any Building is damaged and all or a portion of such damage is uninsured, or (c) part of any Building or the Property is taken by any exercise of the right of eminent domain, then Landlord shall have the right to terminate this Lease (even if Landlord’s entire interest in the Premises may have been divested) by giving notice to Tenant of Landlord’s election so to do within ninety (90) days after the occurrence of such casualty or the effective date of such taking, whereupon this Lease shall terminate on the earlier of (a) thirty (30) days after the date of such notice or (b) the effective date of such taking with the same force and effect as if such date were the date originally established as the expiration date hereof.

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14.2    Restoration; Tenant’s Right of Termination. If (a) the Premises or any Building is damaged by fire or other casualty, or (b) all or part of any Building is taken by right of eminent domain; and this Lease is not terminated pursuant to Section 14.1, Landlord shall thereafter use reasonable efforts (to the extent practicable in Landlord’s reasonable determination in light of the nature of any taking or the election by Landlord’s lender to apply all or a portion of any resulting insurance proceeds to the repayment of Landlord’s loan) to restore such Building(s) and the Premises (excluding all Alterations) to proper condition for Tenant’s use and occupation, provided that Landlord’s obligation shall be limited to the amount of insurance and eminent domain proceeds available therefor. If, for any reason, such restoration shall not be substantially completed within twelve (12) months after the expiration of the ninety (90) day period referred to in Section 14.1 (which twelve (12) month period may be extended for such periods of time as Landlord is prevented from proceeding with or completing such restoration due to Force Majeure, but in no event for more than an additional three (3) months), Tenant shall have the right to terminate this Lease by giving notice to Landlord thereof within thirty (30) days after the expiration of such period as so extended) provided that such restoration is not completed within such period. Upon such termination, this Lease shall cease and come to an end without further liability or obligation on the part of either party (except with respect to obligations which are expressly stated herein to survive expiration or termination) thirty (30) days after such giving of notice by Tenant unless, within such thirty (30) day period, Landlord substantially completes such restoration subject to the completion of minor “punch list” items, the completion of which will not materially interfere with Tenant’s business operations. Such right of termination shall be Tenant’s sole and exclusive remedy at law or in equity for Landlord’s failure so to complete such restoration.

14.3    Abatement of Rent. If the Premises or any Building are damaged by fire or other casualty, Basic Rent and Additional Rent payable by Tenant shall abate proportionately for the period during which, by reason of such damage, Tenant’s use of such Building(s) is prevented, having regard for the extent to which Tenant may be required to discontinue Tenant’s use of all or an undamaged portion of the Premises due to such damage, but such abatement or reduction shall end if and when either (a) Landlord shall have substantially completed sufficient restoration so that the Premises are in substantially the condition it was in prior to such damage except for all Alterations which shall be completed by Tenant and Tenant has had a reasonable period of time (but in no event more than one hundred eighty (180) days if substantial damage, as defined above, has occurred nor more than ninety (90) days in all other cases) to complete restoration of the Initial Work, the Expansions and any Alterations existing at the time of the fire or other casualty, or (b) Tenant shall have commenced occupancy and use of such Building(s). If the Premises shall be affected by any exercise of the power of eminent domain, Basic Rent and Additional Rent payable by Tenant shall be justly and equitably abated and reduced according to the nature and extent of the loss of use of such Building(s) suffered by Tenant. In no event shall Landlord have any liability for damages to Tenant for inconvenience, annoyance, or interruption of business arising from any fire or other casualty or eminent domain.

14.4    Condemnation Award. Landlord shall have and hereby reserves and excepts, and Tenant hereby grants and assigns to Landlord, all rights to recover for damages to the Property and the leasehold interest hereby created, and to compensation accrued or hereafter to accrue by reason of any taking, by exercise of the right of eminent domain, and by way of confirming the foregoing, Tenant hereby grants and assigns, and covenants with Landlord to

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grant and assign to Landlord, all rights to such damages or compensation, and covenants to deliver such further assignments and assurances thereof as Landlord may from time to time request, and Tenant hereby irrevocably appoints Landlord its attorney-in-fact to execute and deliver in Tenant’s name all such assignments and assurances. Notwithstanding the preceding, however, Tenant, subject to, and subordinate to, the rights of any mortgage lender of the Landlord with respect to the Property, shall have a right to a share of any portion of a condemnation award which is directly attributable to the Initial Work and the Expansions. The Tenant’s share of the portion of a condemnation award directly attributable to the Initial Work and the Expansions shall be equal to 50% of the then unamortized amount of Tenant’s actual out-of-pocket payments for hard construction costs for the Initial Work and Expansions made by Tenant through December 31, 2005 (up to a maximum amount of $1,600,000.00 in out-of-pocket payments). Such payment amount shall be ratably amortized without interest over the Initial Term. In no event shall Tenant have the right to receive an amount greater than $800,000.00 out of any such award. In addition, nothing contained herein shall be construed to prevent Tenant from prosecuting in a separate condemnation proceeding a claim for the value of any of Tenant’s Removable Property installed in the Premises by Tenant at Tenant’s expense and for relocation expenses, provided that such action shall not affect the amount of compensation otherwise recoverable by Landlord from the taking authority.

ARTICLE 15
ADDITIONAL COVENANTS

15.1      Tenant.

(a)           Estoppel Certificate. For the benefit of any third party lender or prospective third party lender or purchaser or prospective purchaser of the Property, Tenant shall, at any time and from time to time, upon not less than fifteen (15) days prior written notice by Landlord, execute, acknowledge and deliver to Landlord an estoppel certificate addressed to such party containing such statements of fact with respect to this Lease and the Property as such party reasonably requests. Each request by Landlord for an estoppel shall refer to the obligation to provide the same within such fifteen (15) day period.

(b)           Financial Statements. Tenant shall, except during any period of time when Tenant is listed as a company on any national stock exchange, without charge therefor, at any time (but not more than once annually except in the case of a prospective loan or sale), within ten (10) days following a request by Landlord, deliver to Landlord, or to any other party designated by Landlord, a true and accurate copy of Tenant’s most recent financial statements.

15.2      Landlord.

(a)           Covenant of Quiet Enjoyment. Subject to the terms and conditions of this Lease, on payment of the Rent and observing, keeping and performing all of the other terms and conditions of this Lease on Tenant’s part to be observed, kept and performed, Tenant shall lawfully, peaceably and quietly enjoy the Premises during the Term hereof, without hindrance or ejection by any persons lawfully claiming under Landlord to have title to the Premises superior to Tenant. The foregoing covenants of quiet enjoyment are in lieu of any other covenant of title or possession, express or implied.

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15.3       As to Both Parties.

(a)           Recording. Tenant agrees not to record this Lease, but, if the Term of this Lease (including any extended term) is seven (7) years or longer, each party hereto agrees, on the request of the other, to execute a notice of lease in substantially the form attached hereto as Exhibit E, or such other form as may be mandated by the state and/or county in which the Property is located. In no event shall such document set forth the Rent payable by Tenant hereunder; and any such document shall expressly state that it is executed pursuant to the provisions contained in this Lease, and is not intended to vary the terms and conditions of this Lease. At Landlord’s request, promptly upon expiration of or earlier termination of the Term, Tenant shall execute and deliver to Landlord a release of any document recorded in the real property records for the location of the Property evidencing this Lease, and Tenant hereby appoints Landlord Tenant’s attorney-in-fact, coupled with an interest, to execute any such document if Tenant fails to respond to Landlord’s request to do so within ten (10) days. The obligations of Tenant under this subsection (a) shall survive the expiration or any earlier termination of the Term.

ARTICLE 16
HOLDING OVER; SURRENDER

16.1    Holding Over. Any holding over by Tenant after the expiration of the Term of this Lease shall be treated as a daily tenancy at sufferance at a rent equal to one and one half (1.50) times the Basic Rent in effect immediately prior to such expiration plus the Additional Rent herein provided (prorated on a daily basis). Tenant shall also pay to Landlord all damages, direct and/or indirect, sustained by reason of any such holding over. In all other respects, such holding over shall be on the terms and conditions set forth in this Lease as far as applicable.

16.2    Surrender of Premises. Upon the expiration or earlier termination of the Term, Tenant shall peaceably quit and surrender to Landlord the Premises in the condition in which the same are required to be kept pursuant to Section 9.2, together with the Initial Work, and all Alterations (except as hereinafter provided), excepting only ordinary wear and use and damage by fire or other casualty, and/or condemnation for which, under other provisions of this Lease, Tenant has no responsibility to repair or restore. Upon such expiration or earlier termination of the Term, Tenant shall remove from the Premises (i) all of Tenant’s Removable Property, (ii) to the extent specified by Landlord in writing at the time of their installation, any Alterations, other than the Initial Work, excluding the Expansions, and all partitions wholly within the Premises unless installed initially by Landlord in preparing the Premises for Tenant’s occupancy; and shall repair any damage to the Premises or the Buildings caused by such removal, and (iii) all telecommunications lines and cabling installed by Tenant within the Premises or elsewhere in the Buildings to the extent exclusively serving the Premises. Any Tenant’s Removable Property which shall remain in the Buildings or on the Premises after the expiration or earlier termination of the Term and surrender of the Premises by the Tenant, its assignees and subtenants, shall be deemed conclusively to have been abandoned, and either may be retained by Landlord as its property or may be disposed of in such manner as Landlord may see fit, at Tenant’s sole cost and expense.

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ARTICLE 17
RIGHTS OF MORTGAGEES

17.1 Rights of Mortgagees. This Lease shall be subject and subordinate to all matters currently of record, including without limitation, deeds, easements and land disposition agreements, and to the lien and terms of any mortgage, or deed of trust (collectively, with any renewals, modifications, consolidations, replacements and extensions thereof, a “Mortgage,” and the holder thereof from time to time, and its successors, participants and/or assigns, the “Holder”) from time to time encumbering the Premises and to each advance made thereunder, whether executed and delivered prior to or subsequent to the date of this Lease, unless the Holder shall elect otherwise. Simultaneously with the execution hereof, Tenant has executed a Subordination, Non-Disturbance and Attornment Agreement (the “Mass Mutual SNDA”). Landlord shall endeavor to obtain an executed Mass Mutual SNDA from Babson Capital Management LLC (that is, executed as agent for the current mortgagee, Massachusetts Mutual Life Insurance Company), within thirty (30) days of the date of execution thereof by Tenant and delivery thereof to Landlord. In the event that upon Tenant’s execution of the Mass Mutual SNDA, said party has not executed the Mass Mutual SNDA within said thirty (30) day period, Tenant shall have the right to terminate this Lease by written notice to Landlord in the thirty (30) day period following expiration of the initial thirty (30) day period for delivery of the fully executed Mass Mutual SNDA, provided that any such notice of termination shall be null and void if the Mass Mutual SNDA executed by said party is obtained within thirty (30) days of Landlord’s receipt of such notice of termination. If such a termination notice is not rendered null and void as aforesaid, this Lease shall terminate, all security deposits and letters of credit delivered hereunder shall be returned, the Lease shall have no further force nor effect, and neither party shall any further rights, responsibilities or obligations hereunder except such obligations as specifically stated to survive expiration of the Term or the earlier termination of this Lease and except that the Prior Leases shall be deemed revived and in full force and effect as if this Lease were never executed. With respect to future mortgages, the subordination described above shall take effect only at such time as such mortgagee executes a Subordination, Non- Disturbance and Attornment Agreement in the form attached hereto as Exhibit H (an “SNDA”) (as modified to include specific mortgage references, mortgagee information, and other similar information), it being agreed that Tenant’s execution of the Mass Mutual SNDA or an SNDA shall not be a pre-condition of the subordination of this Lease to any Mortgage. If the Holder or any other party shall succeed to the interest of Landlord (such Holder or other party, a “Successor”), Tenant agrees unconditionally to attorn to the Holder or Successor, and this Lease shall continue in full force and effect between the Holder or Successor and Tenant.

17.2 Assignment of Rents. With reference to any assignment by Landlord of Landlord’s interest in this Lease, or the rents payable hereunder, conditional in nature or otherwise, which assignment is made to the Holder of a Mortgage on property which includes the Premises, Tenant agrees that the execution thereof by Landlord, and the acceptance thereof by the Holder of such Mortgage shall never be treated as an assumption by such Holder of any of the obligations of Landlord hereunder unless such Holder shall, by notice sent to Tenant, specifically otherwise elect and, except as aforesaid, such Holder shall be treated as having assumed Landlord’s obligations hereunder only upon foreclosure of such Holder’s Mortgage and the taking of possession of the Premises.

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17.3    Notice to Holder. After receiving written notice from Landlord (or any Holder) of any Holder of a Mortgage which includes the Premises, no notice from Tenant to Landlord alleging any default by Landlord shall be effective with respect to the Holder of a Mortgage unless and until a copy of the same is given to such Holder (provided Tenant shall have been furnished with the name and address of such Holder), it being agreed that such Holder shall have the same rights to cure as Landlord shall have under Section 19.7 and the curing of any of Landlord’s defaults by such Holder shall be treated as performance by Landlord.

ARTICLE 18
LETTER OF CREDIT/SECURITY DEPOSIT

18.1    Letter of Credit. Within ten (10) days following the execution hereof, Tenant agrees that it shall deliver to Landlord a Letter of Credit (as defined below) in accordance with the provisions of this Section 18.1. Provided no Default of Tenant shall have occurred under this Lease and is continuing on the applicable date, on or after each of the first seven (7) anniversaries of the Commencement Date, Landlord will permit the Letter of Credit to be reduced by $200,000 as of each such date. Subject to the foregoing conditions, such reduction may occur automatically pursuant to the terms of the Letter of Credit or on the request of Tenant, Landlord shall accept a replacement Letter of Credit for the reduced amount delivering up the previous Letter of Credit upon receipt of such replacement Letter of Credit.

(a)           Letter of Credit Requirements. As used herein the term “Letter of Credit” means an unconditional irrevocable standby commercial letter of credit that is: (i) in the amount set forth in Section 1.1, but may have the reduction schedule set forth above in Section 18.1 so long as the conditions set forth therein are also included in the Letter of Credit, (ii) issued by a reputable domestic commercial bank or other financial institution, the long-term debt of which is rated at least A- or the equivalent thereof by Standard & Poors Ratings Group, or A- or the equivalent thereof by Moody’s Investors Services, Inc., and having capital and surplus in excess of Two Hundred Million and 00/100 Dollars ($200,000,000.00) and being “well-capitalized” as defined in 12 CFR 325.103, (iii) either (1) binding for the period through thirty (30) days after the expiration of the Term hereof, as the same may be extended, or (2) binding for one (1) year and automatically renewed annually unless the issuer of such Letter of Credit provides to Landlord a written notice of non-renewal at least thirty (30) days prior to the expiration of such one-year period, and (iv) substantially in the form attached hereto as Exhibit E.

(b)           Substitute Letter of Credit. In the event that (i) any issuer of a Letter of Credit gives notice to Landlord of the expiration or non-renewal of such Letter of Credit, or (ii) evidence of the renewal of any Letter of Credit is not delivered to Landlord at least thirty (30) days prior to the scheduled expiration of said Letter of Credit (the first date on which either of such events occurs being referred to as the “Deadline”), Tenant shall, within ten (10) days of the Deadline, deliver to Landlord a substitute Letter of Credit, satisfying the requirements set forth above. If Tenant fails to substitute a new Letter of Credit by such date, Landlord shall have the right, without notice or demand, to draw on the Letter of Credit currently in its possession and hold and apply the cash proceeds thereof as the Security Deposit as set forth in this Lease. In addition, if the credit rating, as determined by any commercially recognized rating agency, of the issuer of the Letter of Credit falls from the level of its credit rating on the date of this Lease,

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Landlord shall have the right to require Tenant to provide a substitute Letter of Credit from an issuer with a credit rating equal to the credit rating of such original issuer on the date of this Lease. If Tenant fails to deliver to Landlord a substitute Letter of Credit, satisfying the requirements set forth above, Landlord shall have the right, without notice or demand, to draw on the Letter of Credit currently in its possession and hold and apply the cash proceeds thereof as the Security Deposit as set forth in this Lease.

(c)           Drawing Upon Letter of Credit. From and after the occurrence of any Default of Tenant hereunder, Landlord may draw in full, or in part from time to time, upon the Letter of Credit and immediately apply all or a portion of the cash proceeds thereof to remedy said Default of Tenant, and any cash proceeds not so immediately applied shall be held by Landlord and shall constitute a Security Deposit hereunder, and Tenant hereby grants to Landlord a first priority security interest therein.

In the event a petition is filed by the Tenant seeking an adjudication of itself as bankrupt or insolvent under any bankruptcy law or similar law or if any petition shall be filed or action taken to declare Tenant a bankrupt or to delay, reduce or modify Tenant’s debts or obligations or to reorganize or modify Tenant’s capital structure or indebtedness or to appoint a trustee, receiver or liquidator of Tenant or if an involuntary petition in bankruptcy is filed against Tenant, Landlord may draw against the Letter of Credit for any amount up to the full amount thereof paid by Tenant to Landlord within the applicable preference period on account of its obligations under this Lease. The amount so drawn shall be held by Landlord in a segregated account until expiration of the preference period. If a preference claim is brought against Landlord requiring Landlord to repay to the debtor’s estate the amount of any payments made by Tenant to Landlord as a preference, Landlord may reimburse itself out of the funds drawn under the Letter of Credit and so held the amount of the preference payments that Landlord is required to pay back to the debtor’s estate, together with reasonable attorneys fees and disbursements incurred by Landlord in connection with any claim by the debtor’s estate for such payment. Any amounts drawn down in accordance with this subparagraph that are unexpended after expiration of the preference period shall be paid over to Tenant, or its estate, as applicable.

18.2 Security Deposit. Any Security Deposit which Landlord may, from time to time, receive pursuant to this Lease shall secure the full and prompt payment and performance of Tenant’s obligations under this Lease and Tenant hereby grants Landlord a first priority security interest therein.

18.3 Application of Security Deposit. Any Security Deposit shall be held and applied by the Landlord as set forth in this Lease. Landlord shall hold any Security Deposit (or so much thereof as has not been applied by Landlord pursuant hereto) until that date which is three (3) months following the expiration or earlier termination of the Term as security for the payment and performance of all of Tenant’s obligations hereunder. Landlord shall have the right from time to time, without prejudice to any other remedy Landlord may have, to apply such Security Deposit, or any part thereof, to Landlord’s damages arising from, or to cure, any Default of Tenant. If Landlord shall so apply any or all of such Security Deposit, Tenant shall immediately upon demand deposit with Landlord the amount so applied to restore the Security Deposit to the full original amount of the Letter of Credit. Landlord shall return the Security Deposit, or so much thereof as shall not have theretofore been applied in accordance with the terms of this

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Section, to Tenant on or before that date which is three (3) months following the expiration or earlier termination of the Term of this Lease and surrender of possession of the Premises by Tenant to Landlord at such time, provided that there is then existing no Default of Tenant (nor any circumstance which, with the passage of time or the giving of notice, or both, would constitute a Default of Tenant). Landlord shall have no obligation to pay interest on the Security Deposit and may commingle the same with Landlord’s other funds. If Landlord assigns Landlord’s interest under this Lease, the Security Deposit, or any part thereof not previously applied, shall be turned over by Landlord to Landlord’s assignee, and, if so turned over, Tenant agrees to look solely to such assignee for proper application of the Security Deposit in accordance with the terms of this ARTICLE 18.

The Holder of a Mortgage shall not be responsible to Tenant for the return or application of any such Letter of Credit and/or Security Deposit, whether or not it succeeds to the position of Landlord hereunder, unless such Letter of Credit and/or Security Deposit shall have been received in hand by such Holder.

18.4        Intentionally Omitted.

ARTICLE 19
DEFAULT; REMEDIES

19.1        Tenant’s Default.

(a)           If at any time subsequent to the date of this Lease any one or more of the following events (each a “Default of Tenant”) shall happen:

(i)     Tenant shall fail to pay the Basic Rent or Additional Rent hereunder within five (5) days following when due; or

(ii)     Tenant shall fail to timely bond off or discharge a lien in accordance with Section 7.4 herein within five (5) Business Days of written notice by Landlord to Tenant of such failure; or

(iii)     Tenant shall fail to timely deliver an estoppel certificate in accordance with Section 15.1(a) herein within five (5) Business Days of written notice by Landlord to Tenant of such failure; or

(iv)     Tenant shall neglect or fail to perform or observe any other covenant herein contained on Tenant’s part to be performed or observed and Tenant shall fail to remedy the same within thirty (30) days after notice to Tenant specifying such neglect or failure; provided, however that if such failure is of such a nature that Tenant cannot reasonably remedy the same within such thirty (30) day period, then Tenant shall have an additional period, not to exceed ninety (90) days after the notice described in this subsection (iv), to remedy same, so long as Tenant promptly commences (and in any event within such thirty (30) day period) and prosecutes such remedy to completion with diligence and continuity; or

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(v)     Tenant’s leasehold interest in the Premises shall be taken on execution or by other process of law directed against Tenant and Tenant does not dissolve or remove such execution within sixty (60) days following such execution; or

(vi)     Tenant shall make an assignment for the benefit of creditors or shall be adjudicated insolvent, or shall file any petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future Federal, State or other statute, law or regulation for the relief of debtors (other than the Bankruptcy Code, as hereinafter defined), or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of Tenant or of all or any substantial part of its properties, or shall admit in writing its inability to pay its debts generally as they become due; or

(vii)     An Event of Bankruptcy (as hereinafter defined) shall occur with respect to Tenant; or

(viii)     A petition shall be filed against Tenant under any law (other than the Bankruptcy Code) seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future Federal State or other statute, law or regulation and shall remain undismissed or unstayed for an aggregate of sixty (60) days (whether or not consecutive), or if any trustee, conservator, receiver or liquidator of Tenant or of all or any substantial part of its properties shall be appointed without the consent or acquiescence of Tenant and such appointment shall remain unvacated or unstayed for an aggregate of sixty (60) days (whether or not consecutive); or

(ix)     If: (x) Tenant shall fail to pay the Basic Rent or Additional Rent hereunder when due or shall fail to perform or observe any other covenant herein contained on Tenant’s part to be performed or observed and Tenant shall cure any such failure within the applicable grace period set forth in clauses (i) or (ii) above; or (y) a Default of Tenant of the kind set forth in clauses (i) or (ii) above shall occur and Landlord shall, in its sole discretion, permit Tenant to cure such Default of Tenant after the applicable grace period has expired; and the same or a similar failure shall occur more than twice within the next 365 days (whether or not such similar failure is cured within any applicable grace period);

then in any such case Landlord may terminate this Lease as hereinafter provided.

(b)       For purposes of subsection (a)(v) above, an “Event of Bankruptcy” means the filing of a voluntary petition by Tenant, or the entry of an order for relief against Tenant, under Chapter 7, 11, or 13 of the Bankruptcy Code, and the term “Bankruptcy Code” means 11 U.S.C. § 101, et seq. If an Event of Bankruptcy occurs, then, subject to Applicable Law, the trustee of Tenant’s bankruptcy estate or Tenant as debtor-in-possession may (subject to final approval of the court) assume this Lease, and may subsequently assign it, only if it does the following:

(i)     files a motion to assume the Lease with the appropriate court;

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(ii)   satisfies all of the following conditions, which Landlord and Tenant acknowledge to be commercially reasonable:

(A)          cures all monetary Defaults of Tenant and nonmonetary Defaults of Tenant that are capable of cure under this Lease or provides Landlord with Adequate Assurance (as defined below) that it will promptly cure all monetary Defaults of Tenant and nonmonetary Defaults of Tenant that are capable of cure after the assumption;

(B)           compensates Landlord and any other person or entity, or provides Landlord with Adequate Assurance that promptly after the date of the assumption, it will compensate Landlord and such other person or entity, for any pecuniary loss that Landlord and such other person or entity incurred as a result of any Default of Tenant, the trustee, or the debtor-in-possession;

(C)           provides Landlord with Adequate Assurance of Future Performance (as defined by the Bankruptcy Code or applied by a Bankruptcy Court) of all of Tenant’s obligations under this Lease; and

(D)          delivers to Landlord a written statement that the conditions herein have been satisfied.

(c)     If the trustee or the debtor-in-possession assumes the Lease under subsection (b) above and applicable bankruptcy law, it may assign its interest in this Lease only if the proposed assignee first provides Landlord with Adequate Assurance of Future Performance of all of Tenant’s obligations under the Lease, and if Landlord determines, in the exercise of its reasonable business judgment, that the assignment of this Lease will not breach any other lease, or any mortgage, financing agreement, or other agreement relating to the Property by which Landlord is then bound or to which the Property is then subject (and Landlord shall not be required to obtain consents or waivers from any third party required under any lease, mortgage, financing agreement, or other such agreement by which Landlord is then bound).

19.2        Landlord’s Remedies.

(a)             Upon the occurrence of a Default of Tenant, Landlord may terminate this Lease by notice to Tenant, specifying a date not less than five (5) days after the giving of such notice on which this Lease shall terminate and this Lease shall come to an end on the date specified therein as fully and completely as if such date were the date herein originally fixed for the expiration of the Term of this Lease, and Tenant will then quit and surrender the Premises to Landlord in the condition required in Section 9.2, but Tenant shall remain liable as hereinafter provided.

(b)             If this Lease shall have been terminated as provided in this Section 19.2, then Landlord may re-enter the Premises, either by summary proceedings, ejectment or otherwise, but only in accordance with Applicable Law, and remove and dispossess Tenant and all other persons and any and all property from the same.

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(c)             If this Lease shall have been terminated as provided in this Section 19.2, Tenant shall pay Rent hereunder up to the time of such termination, and thereafter Tenant, until the end of what would have been the Term of this Lease in the absence of such termination, and whether or not the Premises shall have been relet, shall be liable to Landlord for, and shall pay to Landlord, as liquidated current damages: (x) the Rent due hereunder if such termination had not occurred, less the net proceeds, if any, of any reletting of the Premises, after deducting all expenses in connection with such reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, Attorneys’ Fees, advertising, expenses of employees, alteration costs and expenses of preparation for such reletting; and (y) if this Lease provides that Tenant was entitled to occupy the Premises for any period of time without paying Basic Rent, the amount of Basic Rent that Tenant would have paid for any such period. Tenant shall pay the portion of such liquidated current damages referred to in clause (x) above to Landlord monthly on the days which the Basic Rent would have been payable hereunder if this Lease had not been terminated, and Tenant shall pay the portion of such liquidated current damages referred to in clause (y) above to Landlord upon such termination.

(d)              At any time after termination of this Lease as provided in this Section 19.2, whether or not Landlord shall have collected any such liquidated current damages and in lieu of all such current damages beyond the date of such demand, Tenant, at Landlord’s election, shall pay to Landlord an amount equal to the excess, if any, of the Rent (including Taxes, Operating Expenses and other charges payable under this Lease) which would be payable hereunder from the date of such demand assuming that annual payments by Tenant on account of Taxes and Operating Expenses would be the same as the payments required for the immediately preceding Operating Year or Tax Year for what would be the then unexpired Term of this Lease as if the same remained in effect, over the then fair net rental value of the Premises for the same period, both figures discounted to present value on the date actually paid applying a discount rate consistent with market rates at the time of payment as determined in Landlord’s judgment.

(e)               In case of any Default of Tenant, re-entry, expiration and dispossession by summary proceedings or otherwise, Landlord may, at its option (i) relet the Premises or any part or parts thereof, either in the name of Landlord or otherwise, for a term or terms which may at Landlord’s option be equal to, less than, or in excess of the period which would otherwise have constituted the balance of the Term of this Lease and may grant concessions or free rent to the extent that Landlord considers necessary or advisable to relet the same, and (ii) make such alterations, repairs and decorations in the Premises as Landlord considers necessary or advisable for the purpose of reletting the Premises; and the making of such alterations, repairs and decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid. Tenant hereby expressly waives any and all rights of redemption granted by or under Applicable Law in the event of Tenant being evicted or dispossessed, or in the event of Landlord obtaining possession of the Premises, by reason of the violation by Tenant of any of the terms, covenants or conditions of this Lease.

(f)               Landlord shall have the right, but not the obligation to pay such sums or do any act which requires the expenditure of monies which may be necessary or appropriate by reason of the failure or neglect of Tenant to perform any of the provisions of this Lease, and in the event of the exercise of such right by Landlord, Tenant agrees to pay to Landlord forthwith upon demand all such sums, together with interest thereon per annum at a rate equal to the

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greater of three percent (3%) over the prime rate in effect from time to time at Bank of America (or any successor thereto) or fifteen percent (15%) (but in no event greater than the maximum lawful rate), as Additional Rent. Any payment of Basic Rent and Additional Rent payable hereunder not paid when due shall, at the option of Landlord, bear interest per annum at a rate equal to the greater of three percent (3%) over the prime rate in effect from time to time at Bank of America (or any successor thereto), or fifteen percent (15%) (but in no event greater than the maximum lawful rate) from the due date thereof and shall be payable forthwith on demand by Landlord as Additional Rent.

19.3        Additional Rent. As referred to in Section 19.1 and notwithstanding any other provision of this Lease to the contrary, if Tenant shall fail to pay when due Additional Rent, Landlord shall have the same rights and remedies as Landlord has hereunder for Tenant’s failure to pay Basic Rent.

19.4        Remedies Cumulative. The specified remedies to which Landlord may resort hereunder are not intended to be exclusive of any remedies or means of redress to which Landlord may at any time be entitled lawfully, and Landlord may invoke any remedy (including the remedy of specific performance) allowed at law or in equity as if specific remedies were not herein provided for. Notwithstanding the preceding sentence, however, except as may arise from Tenant holding over as described in Section 16.1, Tenant shall never be liable to Landlord for any loss of business or any other indirect or consequential damages suffered by Landlord from whatever cause.

19.5        Attorneys’ Fees. Tenant shall pay to Landlord reasonable Attorneys’ Fees and expenses incurred by or on behalf of Landlord in enforcing its rights hereunder, provided Landlord is successful in its enforcement action, or occasioned by any Default of Tenant.

19.6        Waiver.

(a)             Failure on the part of Landlord or Tenant to complain of any action or non-action on the part of the other, no matter how long the same may continue, shall never be a waiver by Tenant or Landlord of any of their respective rights hereunder. Further, no waiver at any time of any of the provisions hereof by Landlord or Tenant shall be construed as a waiver of any of the other provisions hereof, and a waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval of Landlord or Tenant to or of any action by the other requiring such consent or approval shall not be construed to waive or render unnecessary Landlord’s or Tenant’s consent or approval to or of any subsequent similar act by the other.

(b)             No payment by Tenant, or acceptance by Landlord, of a lesser amount than that due from Tenant to Landlord hereunder shall be treated otherwise than as a payment on account of the earliest installment of any payment due from Tenant hereunder. The acceptance by Landlord of a check for a lesser amount with an endorsement or statement thereon, or upon any letter accompanying such check, that such lesser amount is payment in full, shall be given no effect, and Landlord may accept such check without prejudice to any other rights or remedies which Landlord may have against Tenant.

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19.7          Landlord’s Default. Landlord shall in no event be in default under this Lease unless Landlord shall neglect or fail to perform any of its obligations hereunder and shall fail to remedy the same within thirty (30) days after notice to Landlord specifying such neglect or failure, or if such failure is of such a nature that Landlord cannot reasonably remedy the same within such thirty (30) day period, Landlord shall fail to commence promptly (and in any event within such thirty (30) day period) to remedy the same and to prosecute such remedy to completion with diligence and continuity.

19.8          Tenant’s Remedies. In the event of Landlord’s default under this Lease, and failure to cure same within any applicable notice and cure period, Tenant shall have the remedies available to it at law and in equity, as the same may be limited or waived by the terms hereof. Except as specifically set forth herein, Tenant acknowledges that its covenant to pay Basic Rent and Additional Rent hereunder is independent of Landlord’s obligations hereunder, and that in the event that Tenant shall have a claim against Landlord, including without limitation, a claim related to its exercise of rights under Section 9.2(c), Tenant shall not have the right to deduct the amount allegedly owed to Tenant from any Basic Rent or Additional Rent due hereunder, it being understood that Tenant’s sole remedy for recovering upon such claim shall be to bring an independent legal action against Landlord.

19.9        Landlord’s Liability.

(a)               General. Tenant agrees to look solely to Landlord’s equity interest in the Property at the time of recovery for recovery of any judgment against Landlord, and agrees that neither Landlord nor any Successor shall be personally liable for any such judgment, or for the payment of any monetary obligation to Tenant. The provision contained in the foregoing sentence is not intended to, and shall not, limit any right that Tenant might otherwise have to obtain injunctive relief against Landlord or any Successor, or to take any action not involving the personal liability of Landlord or any Successor to respond in monetary damages from Landlord’s or any Successor’s assets other than Landlord’s or any Successor’s equity interest in the Property. Notwithstanding any provision herein to the contrary, Landlord shall never be liable to Tenant for any loss of business or any other indirect or consequential damages suffered by Tenant from whatever cause.

(b)              Refusal to Give Consent. Where provision is made in this Lease for Landlord’s consent, and Tenant shall request such consent, and Landlord shall fail or refuse to give such consent, Tenant shall not be entitled to any damages for any withholding by Landlord of its consent, it being intended that Tenant’s sole remedy shall be an action for specific performance or injunction, and that such remedy shall be available only in those cases where Landlord has expressly agreed in writing not to unreasonably withhold its consent. Furthermore, whenever Tenant requests Landlord’s consent or approval (whether or not provided for herein), Tenant shall pay to Landlord, on demand, as Additional Rent, any reasonable expenses incurred by Landlord (including without limitation reasonable Attorneys’ Fees and costs, if any) in connection therewith.

(c)               Transfer of Title. In no event shall the acquisition of Landlord’s interest in the Property by a purchaser which, simultaneously therewith, leases Landlord’s entire interest in the Property back to the seller thereof be treated as an assumption by operation of law or

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otherwise, of Landlord’s obligations hereunder, but Tenant shall look solely to such seller-lessee, and its successors from time to time in title, for performance of Landlord’s obligations hereunder. In any such event, this Lease shall be subject and subordinate to the lease to such purchaser, provided that so long as no Default of Tenant occurs, such purchaser agrees not to disturb Tenant’s rights under this Lease at any time whatsoever, whether or not the lease from purchaser to seller-lessee, terminates, expires, or the like. For all purposes, such seller-lessee, and its successors in title, shall be the Landlord hereunder unless and until Landlord’s position shall have been assumed by such purchaser-lessor. Except as provided in this subsection (c), upon any transfer of title to the Property by Landlord, Landlord shall be entirely freed and relieved from the performance and observance of all covenants, obligations and liability under this Lease, provided however, that Landlord shall not be released from its obligation to make Landlord’s Contribution available to the Tenant as set forth herein unless such subsequent Landlord assumes such obligation.

ARTICLE 20
MISCELLANEOUS PROVISIONS

20.1 Brokerage. Each of Landlord and Tenant warrants and represents that it has dealt with no broker in connection with the consummation of this Lease other than Broker and Co-Broker and Landlord shall be obligated to pay a brokerage fee to Broker if, as, and when required by agreement between Landlord and Broker. Broker shall pay a portion of such brokerage fee to Co-Broker pursuant to the terms of a separate agreement between Broker and Co-Broker. In the event of any brokerage claims against either party predicated upon prior dealings with the other party, the party having such prior dealings agrees to defend the same and indemnify and hold harmless the other against any such claim.

20.2 Invalidity of Particular Provisions. If any term or provision of this Lease, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

20.3 Provisions Binding, Etc. Except as herein otherwise provided, the terms hereof shall be binding upon and shall inure to the benefit of the successors and assigns, respectively, of Landlord and Tenant (except in the case of Tenant, only such successors and assigns as may be permitted hereunder) and, if Tenant shall be an individual, upon and to his heirs, executors, administrators, successors and permitted assigns. Each term and each provision of this Lease to be performed by Tenant shall be construed to be both a covenant and a condition. Any reference in this Lease to successors and assigns of Tenant shall not be construed to constitute a consent by Landlord to such assignment by Tenant.

20.4 Notice. All notices or other communications required hereunder shall be in writing and shall be deemed duly given if delivered in person (with receipt therefor), if sent by reputable overnight delivery or courier service (e.g., Federal Express) providing for receipted delivery, or if sent by certified or registered mail, return receipt requested, postage prepaid, to the following address:

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(a)               if to Landlord at Landlord’s Address, to the attention of David D. Wamester, Sr. Vice President, with a copy to Michael F. Burke, Esq., Nutter, McClennen & Fish, LLP, World Trade Center West, 155 Seaport Boulevard, Boston, Massachusetts 02210-2604.

(b)              if to Tenant, at Tenant’s Address, and after the Term Commencement Date, at the Premises, to the attention of Bruce Bal, Vice President, with a copy to Stephen Creager, Esquire, General Counsel Caliper Life Sciences, Inc., 605 Fairchild Drive, Mountain View, CA 94043, and with a copy to Paul C. Bauer, Esq., Kirkpatrick & Lockhart Nicholson Graham LLP, 75 State Street, Boston, Massachusetts 02109.

Receipt of notice or other communication shall be conclusively established by either (i) return of a return receipt indicating that the notice has been delivered; or (ii) return of the letter containing the notice with an indication from the courier or postal service that the addressee has refused to accept delivery of the notice. Either party may change its address for the giving of notices by notice to the other party given in accordance with this Section 20.4.

20.5 When Lease Becomes Binding; Entire Agreement; Modification. The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of, or option for, the Premises, and this document shall become effective and binding only upon the execution and delivery hereof by both Landlord and Tenant. This Lease is the entire agreement between the parties and expressly supersedes any negotiations, considerations, representations and understandings and proposals or other written documents relating hereto. This Lease may be modified or altered only by written agreement between Landlord and Tenant, and no act or omission of any Agent of Landlord shall alter, change or modify any of the provisions hereof.

20.6 Headings and Interpretation of Sections. The article, section and paragraph headings throughout this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Lease. The provisions of this Lease shall be construed as a whole, according to their common meaning (except where a precise legal interpretation is clearly evidenced), and not for or against either party. Use in this Lease of the words “including,” “such as,” or words of similar import, when followed by any general term, statement or matter, shall not be construed to limit such term, statement or matter to the specified item(s), whether or not language of non-limitation, such as “without limitation” or “including, but not limited to,” or words of similar import, are used with reference thereto, but rather shall be deemed to refer to all other terms or matters that could fall within a reasonably broad scope of such term, statement or matter.

20.7 Waiver of Jury Trial. Landlord and Tenant hereby each waive trial by jury in any action, proceeding or counterclaim brought by either against the other, on or in respect of any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, or Tenant’s use or occupancy of the Premises.

20.8 Time Is of the Essence. Time is of the essence of each provision of this Lease.

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20.9 Multiple Counterparts. This Lease may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document.

20.10 Governing Law. This Lease shall be governed by the laws of the state in which the Property is located.

20.11 Condominium. Building No. 78 comprises Units A-1 and D-1 of Elmwood Park Condominium (the “Condominium”), as evidenced by that certain Phased Master Deed of the Condominium, dated February 24, 1988 and recorded with the Middlesex South District Registry of Deeds in Book 18895, Page 453, as amended and as the same may be amended from time to time (the “Master Deed”). Landlord currently controls the Condominium through its control of the Elmwood Park Condominium Trust (the “Association”), as evidenced by the Declaration of Trust and By-Laws of the Association dated February 24, 1988 and recorded with said Deeds in Book 18895, Page 477, as the same may be amended from time to time (the “Declaration”). Landlord shall not give up control of the Condominium or the Association except upon the sale of one or more units in the Condominium as provided for in the Master Deed and the Declaration (the “Condominium Documents”) or as part of a sale of the Park or any portion thereof. Whether or not Landlord is a controlling party of the Condominium and Association from time to time, so long as Landlord remains a unit owner of the Condominium, to the extent that the Condominium Documents call for the approval of any matter, Landlord, as unit owner or trustee of the Association, shall approve the same if Landlord is required to approve the same in its capacity as landlord under the terms of this Lease. The foregoing shall not limit in any way the right of Landlord (1) to amend the Condominium Documents with respect to any Expansions or any future development of the property which is currently part of the Condominium or the property which constitutes the Park, (2) to subdivide any such property, (3) to add any property to the Condominium, and (4) to dissolve the Condominium and the Association.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly executed, under seal, by persons hereunto duly authorized, as of the date first set forth above.

LANDLORD:
BCIA NEW ENGLAND HOLDINGS LLC, a Delaware limited liability company
By:		BCIA NEW ENGLAND HOLDINGS MASTER LLC, a Delaware limited liability company, its Manager
		By:			BCIA NEW ENGLAND HOLDINGS MANAGER LLC, a Delaware limited liability company, its Manager
		By:			BCIA NEW ENGLAND HOLDINGS MANAGER CORP., a Delaware corporation, its Manager
					By:	/s/ Karl W. Weller
						Name: Karl W. Weller
						Title: Executive Vice President
TENANT:
CALIPER LIFE SCIENCES, INC., a Delaware corporation
By:	/s/ Bruce J Bal
	Name:			Bruce J Bal
	Title:		VP Operations & Aftermarket

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EXHIBIT A
Plan of Buildings and Park

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EXHIBIT A

EXHIBIT A-1
Expansions Applications Plans (6 Sheets)

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EXHIBIT A-1 (Sheet 1 of 6)

EXHIBIT A-1 (Sheet 2 of 6)

EXHIBIT A-1 (Sheet 3 of 6)

EXHIBIT A-1 (Sheet 4 of 6)

EXHIBIT A-1 (Sheet 5 of 6)

EXHIBIT A-1 (Sheet 6 of 6)

EXHIBIT A-2
Plan of Swing Space

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EXHIBIT A-2 (Sheet 1 of 3)

EXHIBIT A-2 (Sheet 2 of 3)

EXHIBIT A-2 (Sheet 3 of 3)

EXHIBIT B
Operating Expenses

A.Operating Expenses shall include the following, without limitation:

1.All expenses incurred by Landlord or Landlord’s Agents which shall be directly related to employment of personnel in connection with the operation, repair, replacement, maintenance, cleaning, repaving, protection and management of the Property, including without limitation, amounts incurred for wages, salaries and other compensation for services, payroll, social security, unemployment and similar taxes, workmen’s compensation insurance, disability benefits, pensions, hospitalization, retirement plans and group insurance, uniforms and working clothes and the cleaning thereof, and expenses imposed on Landlord or Landlord’s Agents pursuant to any collective bargaining agreement for the services of employees of Landlord or Landlord’s Agents in connection with the operation, repair, replacement, maintenance, cleaning, repaving, management and protection of the Property, including, without limitation, day and night supervisors, manager, accountants, bookkeepers, janitors, carpenters, engineers, mechanics, electricians and plumbers and personnel engaged in supervision of any of the persons mentioned above; provided that, if any such employee is also employed on other property of Landlord, such compensation shall be suitably prorated among the Property and such other properties.

2.The cost of services, utilities, materials and supplies furnished or used in the operation, repair, replacement, maintenance, cleaning, repaving, management and protection of the Property, or any portion thereof and the parking areas, access roads, utilities, and other facilities servicing or benefiting the Property alone or in common with other properties in the Park if applicable, and real estate taxes and betterment assessments with respect to the Park, which costs associated with access roads, utilities and other facilities and real estate taxes and betterment assessments with respect to the Park shall be allocated as set forth in any agreements governing or affecting the Park or its appurtenances, which are recorded with the Middlesex Registry of Deeds, or if none, then equitably among the Property and other properties in the Park, including without limitation, such operation, repair, replacement, maintenance, snow plowing, landscaping, cleaning, repaving, management and protection, and as are required to comply with Applicable Law.

3.The cost of maintenance, repairs and replacements for tools and other similar equipment used in the repair, replacement, maintenance, cleaning, repaving, management and protection of the Property, provided that, in the case of any such equipment used jointly on other property of Landlord, such costs shall be suitably prorated among the Property and such other properties.

4.Where the Property is managed by Landlord or an affiliate of Landlord, an annual sum equal to the amounts customarily charged by management firms in the

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Hopkinton, Massachusetts area for similar properties, actually paid, or where managed by other than Landlord or an affiliate thereof, the amounts paid for management, together with, in either case, amounts accrued for legal and other professional fees relating to the Property, but excluding such fees and commissions paid in connection with services rendered for securing or renewing leases and for matters not related to the normal administration and operation of the Property.

5.Premiums and deductibles for insurance against damage or loss to the Property from such hazards as Landlord shall determine, including, but not by way of limitation, insurance covering loss of rent attributable to any such hazards, and public liability insurance.

6.If, during the Term of this Lease, Landlord shall make a capital expenditure, the total cost of which is not properly includible in Operating Expenses for the Operating Year in which it was made, there shall nevertheless be included in such Operating Expenses for the Operating Year in which it was made and in Operating Expenses for each succeeding Operating Year the annual charge-off of such capital expenditure. Notwithstanding any provision of this Lease to the contrary, including without limitation Section 8.1 hereof, Landlord shall not be required to make any capital expenditures unless the Landlord, in its sole discretion, determines that the same is necessary. Annual charge-off shall be determined by dividing the original capital expenditure plus an interest factor of 10% per annum, by the number of years of useful life of the capital expenditure; and the useful life shall be determined reasonably by Landlord in accordance with generally accepted accounting principles and practices in effect at the time of making such expenditure. Notwithstanding the foregoing, if any individual capital expenditure shall be less than $20,000.00, the same shall not be included in the annual charge-off but rather shall be directly included in full in Operating Expenses for the Operating Year in which it was made. Furthermore, notwithstanding any provision of this Lease to the contrary, it is agreed that Landlord’s only obligation with respect to capital replacement is its obligation to replace the Structure of the Buildings, as set forth in Section 8.1 hereof, and any other capital replacement which may be performed by Landlord shall not be included in Operating Expenses or in the annual charge-off described above but rather shall be directly chargeable to Tenant and paid to Landlord upon demand as Additional Rent.

7.Costs for electricity, water and sewer use charges, gas and other utilities supplied to the Property and not paid for directly by tenants.

8.Betterment assessments, provided the same are apportioned equally over the longest period permitted by law, and to the extent, if any, not included in Taxes.

9.Amounts paid to independent contractors for services, materials and supplies furnished for the operation, repair, maintenance, cleaning and protection of the Property.

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B.Operating Expense Exclusions.

1.Notwithstanding the foregoing, Operating Expenses shall not include the following: (a) legal fees, brokerage commissions, sale or advertising costs and other related soft costs incurred in connection with the leasing of the Buildings; (b) costs over and above the deductible of repairs, restoration, replacements or other work occasioned by (i) fire, windstorm or other casualty and either (aa) payable (whether paid or not) by insurance required to be carried by Landlord under this Lease, or (bb) otherwise paid by insurance then in effect obtained by Landlord, (c) costs recovered (less costs of recovery) by Landlord under a manufacturer’s, materialman’s, vendor’s or contractor’s warranty; (d) wages, salaries, benefits and compensation paid or given to (i) executives, shareholders, officers, directors or partners of Landlord, (ii) any principal or partner of the entity from time to time comprising Landlord, or (iii) off-site employees and employees at the Buildings above the level of Building manager; (e) Landlord’s general overhead and administrative expenses not related to the Buildings; (f) payments of principal or interest on any mortgage or other encumbrance including ground lease payments and points, commissions and legal fees associated with financing; (g) deductions for depreciation of the Buildings and the Building equipment (but the foregoing shall not limit the provisions of Exhibit B, Section A(6)); (h) legal fees, accountants’ fees and other expenses incurred in connection with disputes with Tenant or other tenants or occupants of the Buildings or associated with the enforcement of any lease or defense of Landlord’s title to or interest in the Buildings or any part thereof not otherwise specifically recoverable under this Lease; (i) charitable or political contributions; (j) any cost or expense related to the testing for, removal, transportation or storage of Hazardous Materials (as hereinafter defined) from the Buildings or Premises, not caused by Tenant or Tenant’s Agents, independent contractors or invitees or Zymark or Zymark’s Agents, independent contractors or invitees, or Tenant’s or Zymark’s assignees or subtenants; (k) interest, penalties or other costs arising out of Landlord’s failure to make timely payments of its obligations, unless Tenant has failed to make any payments under this Lease when due; (1) property management fees of any property management firm in excess of four percent (4.0%) of the gross revenues of the Buildings and all other management fees outside of any established management contract from time to time; (m) salaries, wages, or other compensation paid to employees of any property management organization being paid a fee by Landlord for its services where such services are covered by a management fee; (n) salaries, wages, or other compensation to any employee of Landlord who is not assigned to the full-time or part-time operation, management, maintenance, or repair of the Buildings, including main office accounting, main office clerical personnel, and other main office overhead expenses of Landlord; (o) costs incurred in advertising and promotional activities for the Buildings; (p) costs incurred in connection with the actual or contemplated sales, financing, refinancing, mortgaging, syndicating, selling, or change of ownership interest of the Buildings, including brokerage commissions, attorneys, and accountants fees, closing costs, title insurance premiums, transfer taxes and interest charges related

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thereto; and (q) reserves for repairs, maintenance and replacements, but the foregoing shall not affect the estimated payments to be made as set forth in Section 12.2 of this Lease. Operating Expenses shall be determined by Landlord in accordance with generally accepted accounting principles, consistently applied from one year to the next.

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EXHIBIT C
Rules and Regulations of Building

The following regulations are generally applicable:

1.The public sidewalks, entrances, passages, courts, elevators, vestibules, stairways, corridors or halls shall not be obstructed or encumbered by Tenant (except as necessary for deliveries) or used for any purpose other than ingress and egress to and from the Premises.

2.Awnings, curtains, blinds, shades, screens or other projections must be of a quality, type, design and color, and attached in the manner, approved by Landlord, such approval not to be unreasonably withheld, conditioned, or delayed.

3.Intentionally Omitted.

4.The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were designed and constructed, and no sweepings, rubbish, rags, acids or like substances shall be deposited therein. All damages resulting from any misuse of the fixtures shall be borne by the Tenant.

5.Tenant shall not use the Premises or any part thereof or permit the Premises or any part thereof to be used as a public employment bureau or for the sale of property of any kind at auction, except in connection with Tenant’s business.

6.Tenant must, upon the termination of its tenancy, return to the Landlord all locks, cylinders and keys to offices and toilet rooms of the Premises.

7.No bicycles, vehicles or animals of any kind shall be brought into or kept in or about the Premises. To the extent permitted by Applicable Law, Tenant vehicles and storage trailers may remain at the Property in the number and size as existing as of March 15, 2005.

8.No tenant shall make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with occupants of this or any neighboring building or premises or those having business with them whether by use of any musical instrument, radio, talking machine, unmusical noise, whistling, singing, or in any other way. No tenant shall throw anything out of the doors, windows or skylights or down the passageways.

9.The regulations set forth in Attachment I to this Exhibit, which is by this reference made a part hereof, are applicable to any Alterations being undertaken by or for Tenant in the Premises pursuant to ARTICLE 7 of the Lease.

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ATTACHMENT I TO EXHIBIT C
Rules and Regulations for Tenant Alterations

1.General

a.All Alterations made by Tenant in, to or about the Premises shall be made in accordance with the requirements of this Exhibit and by contractors or mechanics approved by Landlord, such approval not to be unreasonably withheld, conditioned, or delayed.

b.Tenant shall, prior to the commencement of any work, submit for Landlord’s written approval, complete plans for the Alterations, with full details and specifications for all of the Alterations, in compliance with Section D below.

c.Alterations must comply with the Building Code applicable to the Property and the requirements, rules and regulations and any other governmental agencies having jurisdiction.

d.No work shall be permitted to commence before Tenant obtains and furnishes to Landlord copies of all necessary licenses and permits from all governmental authorities having jurisdiction.

e.All demolition, removals or other categories of work that may inconvenience other tenants or disturb Building operations, must be scheduled and performed before or after normal business hours, and Tenant shall provide Landlord’s Managing Agent with at least 24 hours’ notice prior to proceeding with such work.

f.All inquiries, submissions, approvals and all other matters shall be processed through Landlord’s Managing Agent.

g.All work, if performed by a contractor or subcontractor, shall be subject to reasonable supervision and inspection by Landlord’s representative. Such supervision and inspection shall be at Tenant’s sole expense and Tenant shall pay Landlord’s reasonable charges for such supervision and inspection.

2.Prior to Commencement of Work

a.Tenant shall submit to the Building manager a request to perform the work. The request shall include the following enclosures:

(1)A list of Tenant’s contractors and/or subcontractors for Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed.

(2)Four complete sets of plans and specifications properly stamped by a registered architect or professional engineer.

(3)A properly executed building permit application form.

(4)With respect to Alterations which either (a) require Landlord’s consent or (b) cost in excess of $100,000.00 four executed copies of the Insurance Requirements Agreement in the form attached to this Exhibit as Attachment II and made a part hereof from Tenant’s contractor and, if requested by Landlord, from the contractor’s subcontractors.

(5)Contractor’s and subcontractor’s insurance certificates.

b.Within ten (10) business days following receipt, Landlord will return the following to Tenant:

(1)A letter of approval or disapproval with specific comments as to the reasons therefor (such approval or comments shall not constitute a waiver of approval of governmental authorities).

(2)Two fully executed copies of the Insurance Requirements Agreement.

c.Landlord’s approval of the plans, drawings, specifications or other submissions in respect of any Alterations shall create no liability or responsibility on the part of Landlord for their completeness, design sufficiency or compliance with requirements of Applicable Law.

d.Tenant shall obtain a building permit from the Building Department and necessary permits from other governmental agencies. Tenant shall be responsible for keeping current all permits. Tenant shall submit copies of all approved plans and permits to Landlord and shall post the original permit on the Premises prior to the commencement of any work.

3.Requirements and Procedures

a.All structural and floor loading requirements of Tenant shall be subject to the prior approval of Landlord’s structural engineer at Tenant’s sole cost and expense.

b.All mechanical (HVAC, plumbing and sprinkler) and electrical requirements shall be subject to the approval of Landlord’s mechanical and electrical engineers and all mechanical and electrical work shall be performed by contractors who are engaged by Landlord in constructing, operating or maintaining the Buildings. When necessary, Landlord will require engineering and shop drawings, which drawings must be approved by Landlord before work is started. Drawings are to be prepared by Tenant and all approvals shall be obtained by Tenant.

c.If shutdown of risers and mains for electrical, life safety system, HVAC, sprinkler and plumbing work is required, such work shall be supervised by Landlord’s representative. No work will be performed in Building mechanical equipment rooms without Landlord’s approval and under Landlord’s supervision.

d.Tenant’s contractor shall:

(1)have a superintendent or foreman on the Premises at all times;

(2)police the job at all times, continually keeping the Premises orderly;

(3)maintain cleanliness and protection of all areas, including elevators (if any) and lobbies.

(4)protect the front and top of all peripheral HVAC units and thoroughly clean them at the completion of work;

(5)block off supply and return grills, diffusers and ducts to keep dust from entering into the Buildings’ air conditioning systems; and

(6)avoid the disturbance of other tenants.

e.If Tenant’s contractor is negligent in any of its responsibilities, Tenant shall be charged for corrective work.

f.All equipment and installations must be equal to the standards generally in effect with respect to the remainder of the Buildings. Any deviation from such standards will be permitted only if indicated or specified on the plans and specifications and approved by Landlord.

g.A properly executed air balancing report signed by a professional engineer shall be submitted to Landlord upon the completion of all HVAC work.

h.Upon completion of the Alterations, Tenant shall submit to Landlord a permanent certificate of occupancy and final approval by the other governmental agencies having jurisdiction.

i.For Alterations requiring Landlord’s consent, Tenant shall submit to Landlord a final “as-built” set of drawings showing all items of the Alterations in full detail, in both hard copy and electronic form.

j.Additional and differing provisions in the Lease, if any, may be applicable and will take precedence over the provisions of this Exhibit.

4.Standards for Plans and Specifications

Whenever Tenant shall be required by the terms of the Lease (including this Exhibit) to submit plans to Landlord in connection with any Alterations, such plans shall include at least the following:

a.Floor plan indicating location of partitions and doors (details required of partiotion and door types).

b.Location of standard electrical convenience outlets and telephone outlets.

c.Location and details of special electrical outlets; e.g., photocopiers, etc.

d.Reflected ceiling plan showing layout of standard ceiling and lighting fixtures. Partitions to be shown lightly with switches located indicating fixtures to be controlled.

e.Locations and details of special ceiling conditions, lighting fixtures, speakers, etc.

f.Location and specifications of floor covering, paint or paneling with paint colors referenced to standard color system.

g.Finish schedule plan indicating wall covering, paint, or paneling with paint colors referenced to standard color system.

h.Details and specifications of special millwork, glass partitions, rolling doors and grilles, blackboards, shelves, etc.

i.Hardware schedule indicating door number keyed to plan, size, hardware required including butts, latchsets or locksets, closures, stops, and any special items such as thresholds, soundproofing, etc. Keying schedule is required.

j.Verified dimensions of all built-in equipment (file cabinets, lockers, plan files, etc.)

k.Intentionally omitted.

1.Location of any special soundproofing requirements.

m.Location and details of special floor areas exceeding 50 pounds of live load per square foot.

n.All structural, mechanical, plumbing and electrical drawings, to be prepared by the base building consulting engineers, necessary to complete the Premises in accordance with Tenant’s Plans.

o.All drawings to be uniform size (30” x 46”) and shall incorporate the standard project electrical and plumbing symbols and be at a scale of 1/8” = 1’ or larger.

p.All drawings shall be stamped by an architect (or, where applicable, an engineer) licensed in the jurisdiction in which the Property is located and without limiting the foregoing, shall be sufficient in all respects for submission to applicable authorization in connection with a building permit application.

5.Landlord Approvals.

Whenever Landlord approval or consent is required under this Attachment I, Landlord shall not unreasonably withhold, condition, or delay such approval or consent and in the event Landlord intends to withhold or condition such approval or consent, Landlord shall promptly provide an explanation of the reasons for such response in writing to the Tenant.

Attachment II to Exhibit C
Contractor’s Insurance Requirements

Building:

Landlord: BCIA New England Holdings LLC

Tenant:

Premises:

The undersigned contractor or subcontractor (“Contractor”) has been hired by the tenant named above (hereinafter called “Tenant”) of the Building(s) named above (or by Tenant’s contractor) to perform certain work (“Work”) for Tenant in the Premises identified above. Contractor and Tenant have requested the landlord named above (“Landlord”) to grant Contractor access to the Building(s) and its facilities in connection with the performance of the Work, and Landlord agrees to grant such access to Contractor upon and subject to the following terms and conditions:

1.Contractor agrees to indemnify and save harmless Landlord and Landlord’s Agents and their respective affiliates, subsidiaries and partners, and each of them, from and with respect to any claims, demands, suits, liabilities, losses and expenses, including reasonable Attorneys’ Fees, arising out of or in connection with the Work (and/or imposed by law upon any or all of them) because of personal injuries, bodily injury (including death at any time resulting therefrom) and loss of or damage to property, including consequential damages, whether such injuries to person or property are claimed to be due to negligence of the Contractor, Tenant, Landlord or any other party entitled to be indemnified as aforesaid except to the extent specifically prohibited by law (and any such prohibition shall not void this Agreement but shall be applied only to the minimum extent required by law).

2.Contractor shall provide and maintain at its own expense, until completion of the Work, the following insurance:

a.Workmen’s Compensation and Employers, Liability Insurance covering each and every workman employed in, about or upon the Work, as provided for in each and every statute applicable to Workmen’s Compensation and Employers’ Liability Insurance.

b.Comprehensive General Liability Insurance including coverages for Protective and Contractual Liability (to specifically include coverage for the indemnification clause of this Agreement) for not less than the following limits:

Personal Injury:

$3,000,000 per person

$10,000,000 per occurrence

Property Damage:

$3,000,000 per occurrence

$3,000,000 aggregate

c.Comprehensive Automobile Liability Insurance (covering all owned, non-wned and/or hired motor vehicles to be used in connection with the Work) for not less than the following limits:

Bodily Injury:

$1,000,000 per person

$1,000,000 per occurrence

Property Damage:

$1,000,000 per occurrence

Contractor shall furnish a certificate from its insurance carrier or carriers to the Building office before commencing the Work, showing that it has complied with the above requirements regarding insurance and providing that the insurer will give Landlord ten (10) days’ prior written notice of the cancellation of any of the foregoing policies.

3.Contractor shall require all of its subcontractors engaged in the Work to provide the following insurance:

a.Comprehensive General Liability Insurance with limits of liability at least $2,000,000.00 General Aggregate, $2,000,000.00 Products/Completed Operations Aggregate ($1,000,000.00 Each Occurrence $1,000,000.00 Personal Injury).

b.Comprehensive Automobile Liability Insurance (covering all owned, non-owned and/or hired motor vehicles to be used in connection with the Work) with limits of liability at least equal to $1,000,000.00 Combined Single Limit.

c.Umbrella Liability $5,000,000.00 Each Occurrence, $5,000,000.00 Aggregate Limit.

Upon the request of Landlord, Contractor shall require all of its subcontractors engaged in the Work to execute an Insurance Requirements agreement in the same form as this Agreement.

Agreed to and executed this day of                                 ,                     .

Contractor:

By:

By:

By:

EXHIBIT D
Form of Notice of Lease

Pursuant to Massachusetts General Laws, Chapter 183, Section 4, notice is hereby given of the following Lease:

Landlord:      BCIA New England Holdings LLC, a Delaware limited liability company, having a principal place of business at c/o CrossHarbor Capital Partners LLC, One Boston Place, Boston, Massachusetts 02108.

Tenant:         Caliper Life Sciences, Inc., a Delaware corporation, having its principal office at 68 Elm Street, Hopkinton, Massachusetts 01748.

Date of Lease:	As of April 25, 2005.
Description of
Leased Premises:	The building known as 68 Elm Street and the building known as 78 Elm Street consisting of Units A-1 and D-1 of the Elmwood Park Condominium, as evidenced by that certain Phased Master Deed of the Condominium, dated February 24, 1988 and recorded with the Middlesex South District Registry of Deeds in Book 18895, Page 453, as amended and as the same may be amended from time to time, which condominium is governed by the Elmwood Park Condominium Trust (the “Association”), as evidenced by the Declaration of Trust and By-Laws of the Association dated February 24, 1988 and recorded with said Deeds in Book 18895, Page 477, as the same may be amended from time to time.
Term of Lease:	Approximately ten (10) years.
Extension Option	Two (2) options to renew for a term of five (5) years each.

This instrument is executed as notice of the aforesaid Lease and is not intended, nor shall it be deemed, to vary or govern the interpretation of the terms and conditions thereof.

For title, see deed dated June 17, 1999 recorded with said Deeds in Book 30328, Page 496, the Premises being a portion of the property described in said deed.

EXECUTED as a sealed instrument as of the 25th day of April, 2005.

LANDLORD:
BCIA NEW ENGLAND HOLDINGS LLC, a Delaware limited liability company
By:	BCIA NEW ENGLAND HOLDINGS MASTER LLC, a Delaware limited liability company, its Manager
	By:	BCIA NEW ENGLAND HOLDINGS MANAGER LLC, a Delaware limited liability company, its Manager
		By:	BCIA NEW ENGLAND HOLDINGS MANAGER CORP., a Delaware corporation, its Manager
			By:
			Name: Karl W. Weller
			Title: Executive Vice President
TENANT:
By:
Name:
Title:

COMMONWEALTH OF MASSACHUSETTS

COUNTY OF                        

On this       day of April, 2005, before me, the undersigned Notary Public, personally appeared Karl Weller, Executive Vice President of BCIA New England Holdings Manager Corp., as Manager of BCIA New England Holdings Manager LLC, as Manager of BCIA New England Holdings Master LLC, as Manager of BCIA New England Holdings LLC, proved to me through satisfactory evidence of identification, namely               issued by the Commonwealth of Massachusetts, to be the person whose name is signed on the preceding document, and acknowledged to me that he signed it voluntarily for its stated purpose as Executive Vice President of BCIA New England Holdings Manager Corp.

(SEAL)
	Notary Public
	Print name of notary
	My Commission Expires:

EXHIBIT E

Form of Letter of Credit

,                   

Re: Letter of Credit No.:

Gentlemen:

We hereby establish in your favor our Irrevocable Letter of Credit No.                      , and you are hereby irrevocably authorized to draw on us under this Letter of Credit an amount up to USD                    (United States Dollars                   and 00/100).

Funds under this Letter of Credit are available to you (the “Beneficiary”) by your sight draft (s) drawn on us, stating on its face: “Drawn under                         Irrevocable Letter of Credit No.                 ,” accompanied this original Letter of Credit and a certificate (the “Drawing Certificate”) signed by an officer or other representative of Beneficiary certifying

“I,            , an officer of              (the “Beneficiary”) hereby certify to               (the “Bank”), with respect to Irrevocable Letter of Credit No.                issued by the Bank in favor of Beneficiary, that Beneficiary has the right to draw USD             under that certain Lease Agreement dated                  (the “Lease”) between Beneficiary, as landlord, and               , as tenant, for the premises comprising a portion of the building known as and numbered                         .”

Partial and multiple drawings are permitted under this Letter of Credit.

Presentation of drawings hereunder shall be made at our office located at              , or at any other office which may be designated by us in a written notice delivered to you.

This Letter of Credit is transferable in whole, not in part, and may be successively transferred. Transfer of this Letter of Credit shall be effective upon presentation to us of this original Letter of Credit, accompanied by our standard transfer request form appropriately completed. Upon such transfer, all references to the Beneficiary in the Letter of Credit shall be replaced with the name of the transferee.

This Letter of Credit is effective on the date hereof and shall expire with our close of business at 5:00 P.M., our time, on                       (the “Expiration Date”) unless extended as hereinafter provided.

We hereby engage with you that draft(s) drawn under and in compliance with the terms and conditions of this Letter of Credit will be duly honored. Upon request, we will promptly review and approve in advance any draw under this Letter of Credit facsimile copies of the form of the Drawing Certificate relating to such draw.

This Letter of Credit shall be deemed automatically extended, without amendment, for additional periods of one (1) year from the Expiration Date hereof or any future expiration date, unless not less than sixty (60) days prior to any Expiration Date, we notify you in writing, by registered mail, courier service or hand delivery, at the above address, that we elect not to extend this Letter of Credit to any such additional periods. If we so notify you that this Letter of Credit will not be extended, you may draw the full amount then available on or before the then current expiration date by means of your sight draft drawn on us, which draft need not be accompanied by the certificate. In any event, this Letter of Credit will not be extended beyond          pursuant to the first sentence of this paragraph.

[This Letter of Credit may have automatic annual $200,000 reduction feature as per the Lease so long as Lease conditions thereto are also included

This Letter of Credit is subject to Article 5 of the Massachusetts Uniform Commercial Code and where not inconsistent therewith to the Uniform Customs and Practices for Documentary Credits (1998 Revision), International Chamber of Commerce, Paris, France, Publication 590.

Very truly yours,
			Bank
By:
		, Its
	Hereunto duly authorized

2

EXHIBIT F
Appraisers’ Determination of First Extension Term
Fair Market Rent and Second Extension Term Fair Market Rent

The term “Appraisers’ Determination” refers to the following procedures and requirements:

For the purpose of fixing the First Extension Term Fair Market Rent for the First Extension Term and/or the Second Extension Term Fair Market Rent for the Second Extension Term, as the case may be, Landlord and Tenant shall agree upon an appraiser who shall be a member of the M.A.I. or Counselor’s of Real Estate (CRE) (or successor professional organizations) and shall have at least ten (10) years experience appraising rental values of property in the 495 West submarket comprised of Franklin to the south along I-495 to the north to I-290 to and including Marlborough, Massachusetts (the “Market Area”).

If Landlord and Tenant are not able to agree upon an appraiser by the date which is twenty (20) days after an Impasse, as defined in Section 1.1 (the “Appraiser Selection Deadline”), each of Landlord and Tenant shall, within ten (10) additional days, that is, by the date which is thirty (30) days after an Impasse, select an appraiser with the foregoing qualifications whereupon each of said appraisers shall, within ten (10) days of their selection hereunder, select a third appraiser with the foregoing qualifications. The First Extension Term Fair Market Rent for the First Extension Term and/or the Second Extension Term Fair Market Rent for the Second Extension Term, as the case may be, shall thereafter be determined to be the amount equal to the average of the two appraisals which are closest in dollar amount to each other except that if all three appraisals are apart in equal amounts, the appraisal which falls in the middle shall be the First Extension Term Fair Market Rent for the First Extension Term and/or the Second Extension Term Fair Market Rent for the Second Extension Term, as the case may be. If either party fails to select an appraiser by the Appraiser Selection Deadline, then the appraiser selected by the other party, if selected by the Appraiser Selection Deadline, shall be the sole appraiser. Landlord and Tenant shall share equally the expense of any and all appraisers. The appraiser(s) shall be obligated to make a determination of First Extension Term Fair Market Rent for the First Extension Term and/or the Second Extension Term Fair Market Rent for the Second Extension Term, as the case may be, within thirty (30) days of the appointment of either the single appraiser (if only one) and within thirty (30) days of the appointment of the third appraiser (if three are so appointed).

In determining the First Extension Term Fair Market Rent for the First Extension Term and/or the Second Extension Term Fair Market Rent for the Second Extension Term, as the case may be, the appraisers shall consider, among other things, the then current arms length basic rent being charged to tenants for comparable buildings in the Market Area.

The appraisers shall not have the right to modify any provision of this Lease and shall only determine the First Extension Term Fair Market Rent for the First Extension Term and/or the Second Extension Term Fair Market Rent for the Second Extension Term, as the case may be, which shall constitute the Basic Rent under this Lease for the First Extension Term and/or the Second Extension Term, as the case may be; provided, however, that in no event shall the Annual Basic Rent for the First Extension Term or the Second Extension Term, as the case may be, be less than the Annual Basic Rent during the last year of the Term immediately prior to the commencement of the First Extension Term or the Second Extension Term, as the case may be.

EXHIBIT G

Qualified Base Building Improvements

Upgrades to fire alarms and other life safety systems.

Upgrades to elevators.

Upgrades to electrical, mechanical, and other building systems.

Upgrades to the Buildings in order to render the Buildings in compliance with ADA (but excluding such ADA upgrades as relate to the interior layout of the Premises).

EXHIBIT H
SNDA (ATTACHED)

THIS AGREEMENT, made as of the            day of            ,              , by and between CALIPER LIFE SCIENCES, INC., a Delaware corporation (herein “Lessee”), and [MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation] (together with its successors and assigns, herein “Lender”).

RECITALS

A.Lender is the holder of a certain promissory note (herein the “Note”) [issued by BCIA New England Holdings LLC, a Delaware limited liability company (“Lessor”), dated April 2, 2001 in the principal sum of Three Hundred Ninety-Five Million Dollars ($395,000,000.00) and of the mortgage of even date therewith (herein the “Mortgage”) securing the Note, recorded at the Middlesex South District Registry of Deeds in Book 32610, Page 533 and Book 32611, Page 026, which Mortgage encumbers certain real properties, as described in the Mortgage, including without limitation, the following property (herein called the “Subject Property”): the building known as and numbered 68 Elm Street and the building known as and numbered 78 Elm Street, which comprises Units A-1 and D-1 of the Elmwood Park Condominium, as evidenced by that certain Phased Master Deed of the Condominium, dated February 24, 1988 and recorded with the Middlesex South District Registry of Deeds in Book 18895, Page 453, as amended and as the same may be amended from time to time, which condominium is governed by the Elmwood Park Condominium Trust (the “Association”), as evidenced by the Declaration of Trust and By-Laws of the Association dated February 24, 1988 and recorded with said Deeds in Book 18895, Page 477, as the same may be amended from time to time.]

B.Lessee and BCIA New England Holdings LLC, a Delaware limited liability company, as Lessor, entered into a lease agreement (herein the “Lease”) dated of even date herewith by which Lessee leased from Lessor the buildings on the Subject Property (herein the “Leased Premises”).

C.Lessee desires to be able to obtain the advantages of the Lease and occupancy thereunder in the event of foreclosure of the Mortgage and Lender wishes to have Lessee confirm the priority of the Mortgage over the Lease.

NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth hereinbelow, the parties hereto agree as follows:

1.Lessee hereby covenants and agrees that all its rights and interests whatsoever under the Lease in the Leased Premises and the Subject Property are and shall remain subject and subordinate to the lien of the Mortgage and to all the terms, conditions and provisions thereof, to all advances made or to be made thereunder or under the Note, and to any increases, renewals, extensions, modifications, substitutions, consolidations or replacements thereof or of the Note.

2.So long as Lessee is not in default (beyond any period given Lessee in the Lease to cure such default) in the payment of rent or additional charges or in the performance of any of the other terms, covenants or conditions of the Lease on Lessee’s part to be performed, Lessee

shall not be disturbed by Lender in its possession of the Leased Premises during the term of the Lease, or any extension or renewal thereof, or in the enjoyment of its rights under the Lease.

3.If the interest of the Lessor under the Lease shall be acquired by Lender or any purchaser (“Purchaser”) by reason of exercise of the power of sale or the foreclosure of the Mortgage or other proceedings brought to enforce the rights of the holder thereof, by deed in lieu of foreclosure or by any other method, and Lender or Purchaser succeeds to the interest of Lessor under the Lease, Lessee shall attorn to Lender or Purchaser as its lessor, said attornment to be effective and self-operative without the execution of any other instruments on the part of either party hereto immediately upon Lender’s or Purchaser’s succeeding to the interest of the Lessor under the Lease, and the Lease shall continue in accordance with its terms between Lessee as lessee and Lender or Purchaser as lessor; provided, however, that Lender and Purchaser:

(a)shall not be personally liable under the Lease and Lender’s and Purchaser’s liability under the Lease shall be limited to the ownership interest of Lender or Purchaser, as the case may be, in the Subject Property;

(b)shall not be liable for any act or omission of any prior lessor (including Lessor);

(c)shall not be subject to any offsets or defenses which Lessee might have against any prior lessor (including Lessor);

(d)shall not be bound by any prepayment of rent or deposit, rental security or any other sums deposited with any prior lessor (including Lessor) under the Lease unless actually received by it;

(e)shall not be bound by any agreement or modification of the Lease made without its consent;

(f)[Insert to the extent currently applicable as it is for the 2001 Mass Mutual mortgage: Other than Landlord’s Contribution,] shall not be bound to commence or complete any construction or to make any contribution toward construction or installation of any improvements upon the Leased Premises required under the Lease or any expansion or rehabilitation of existing improvements thereon, or for restoration of improvements following any casualty not required to be insured under the Lease or for the costs of any restorations in excess of any proceeds recovered under any insurance required to be carried under the Lease; and,

(g)shall not be bound by any restriction on competition beyond the Subject Property.

4.[Intentionally omitted].

5.Lessee agrees with Lender that from and after the date hereof, Lessee will not terminate or seek to terminate the Lease by reason of any default of the Lessor thereunder until Lessee shall have given written notice, by registered or certified mail, return receipt requested, of said act or omission to Lender, which notice shall be addressed to Massachusetts Mutual Life Insurance Company, c/o Babson Capital Management LLC, 1500 Main Street, Springfield,

Massachusetts 01115, Attention: Managing Director, Real Estate Investment Division, and until a reasonable period of time shall have elapsed following the giving of such notice, during which period Lender shall have the right, but shall not be obligated, to remedy such default.

6.This Agreement shall inure to the benefit of and shall be binding upon Lessee and Lender, and their respective heirs, personal representatives, successors and assigns. This Agreement may not be altered, modified or amended except in writing signed by all of the parties hereto. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. This Agreement shall be governed by and construed according to the laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

[ATTEST OR WITNESSES (2)]	CALIPER LIFE SCIENCES, INC.
	By
	Its
[SEAL]
[ATTEST OR WITNESSES (2)]	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
	BY BABSON CAPITAL MANAGEMENT LLC ITS AUTHORIZED AGENT
	By
	Its
[SEAL]

ACKNOWLEDGEMENTS

STATE OF	)
	) ss.
COUNTY OF	)

On this                  day of              ,                , before me, the undersigned Notary Public, personally appeared                ,                    , proved to me through satisfactory evidence of identification, namely                           issued by                          , to be the person whose name is signed on the preceding document, and acknowledged to me that he signed it voluntarily for its stated purpose as                      of

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commissions Expires:

STATE OF	)
	) ss.
COUNTY OF	)

On this       day of                  ,                    , before me, the undersigned Notary Public, personally appeared        ,                   , proved to me through satisfactory evidence of identification, namely                   issued by                       , to be the person whose name is signed on the preceding document, and acknowledged to me that he signed it voluntarily for its stated purpose as                of

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

EX-10.29

EXHIBIT 10.29

CALIPER LIFE SCIENCES, INC.

KEY EMPLOYEE CHANGE OF CONTROL

AND SEVERANCE BENEFIT PLAN

Amended and Restated as of November 4, 2008

This Key Employee Change of Control and Severance Benefit Plan (the “Plan”), previously adopted by the Board of Directors of Caliper Life Sciences, Inc. (the “Company”), is hereby amended and restated effective November 4, 2008 to comply with Section 409A of the Internal Revenue Code.  This Plan supersedes and replaces the Plan amended and restated as of February 16, 2005, which in turn amended and superseded the Company’s Change of Control Sr. Mgmt Severance/Equity Acceleration Plan (the “Prior COC Plan”).  However, except as provided herein, this Plan does not supersede any written agreement between the Company and any employee.

BACKGROUND OF THE PLAN

A.The Company draws upon the knowledge, experience and objective advice of its executives and other key employees to manage its business for the benefit of the Company’s stockholders.

B.Due to the widespread awareness of the possibility of mergers, acquisitions and other strategic alliances, change of control is an issue in competitive recruitment and retention efforts.

C.The Company recognizes that if there occurred a change of control or other event that could substantially change the nature and structure of the Company, the resulting uncertainty regarding the consequences of such an event could adversely affect the Company’s ability to attract, retain and motivate its executives and other key employees.

D.In order to enhance the ability of the Company to retain its executives and other key employees, the Company has previously provided certain severance benefits to certain of its executives and other key employees, in the event of termination following a change of control of the Company, pursuant to the Prior COC Plan.  The Company replaced the benefits provided under the Prior COC Plan with the benefits set forth in this Plan, and extended the benefits set forth in this Plan to certain of its executives and other key employees, subject to the terms and conditions set forth herein.

E.On February 14, 2005, the Compensation Committee of the Company’s Board of Directors reviewed, approved and adopted the terms of this Plan, and adopted a resolution recommending that the Company’s Board of Directors approve and ratify this Plan.

F.On February 16, 2005, this Plan was approved and ratified by the Company’s Board of Directors.

G.The Company now wishes to amend and restate the Plan to comply with Section 409A of the Internal Revenue Code.  Unless otherwise specifically provided herein, the Section 409A of the Code changes are effective January 1, 2008.

1.GENERAL

1.1Defined Terms.  Capitalized terms used in this Plan shall have the meanings set forth in Section 4 below, unless the context clearly requires a different meaning.

1.2Purpose.  The purpose of this Plan is to aid the Company in attracting, retaining and motivating its Eligible Participants by providing specified compensation and other benefits to such Eligible Participants in the event of a Covered Termination.

1.3No Employment Agreement.  This Plan does not obligate the Company to continue to employ an Eligible Participant for any specific period of time, or in any specific role or geographic location.  Subject to the terms of any applicable written employment agreement between Company and an Eligible Participant, the Company may assign an Eligible Participant to other duties, and either the Company or an Eligible Participant may terminate such Eligible Participant’s employment by the Company at any time for any reason.

1.4Condition for Receipt of Benefits.  Notwithstanding anything in this Plan to the contrary, the receipt by any Eligible Participant of any of the benefits provided by this Plan shall be conditioned on such Eligible Participant executing and delivering to the Company an effective waiver and release of all claims such Eligible Participant may have against the Company.

2.TERMINATION UPON CHANGE OF CONTROL

2.1Cash Severance Benefit.  In the event of a Change of Control and an Eligible Participant’s Covered Termination, the Eligible Participant shall be entitled to the basic cash severance benefit described below.

2.1.1Salary Continuation.  Subject to the terms of this Section 2.1, such Eligible Participant shall receive payments equal to his or her base pay at the time of such Eligible Participant’s Covered Termination for (x) in the case of each Eligible Participant other than the President or Chief Executive Officer of the Company, twelve (12) months and (y) in the case of the President or Chief Executive Officer of the Company, twenty-four (24) months, or in each case until such Eligible Participant is employed by another company, whichever occurs earlier.

2.1.2Prorated Bonus Payment.  Subject to the terms of this Section 2.1, such Eligible Participant shall receive his or her target bonus or incentive payment for the year in which termination occurs, prorated through the date of termination.

All cash severance payments made under this Section 2.1 shall be reduced by applicable federal and state withholding taxes.  If there is a Change of Control, (i) any cash payments pursuant to Section 2.1.1 shall be made on the Company’s regular payroll dates commencing upon the later of (x) the date of the Change of Control or (y) thirty (30) days following such Eligible Participant’s Covered Termination and (ii) any cash payments pursuant to Section 2.1.2 shall be paid in a lump sum upon the later of (x) the date of the Change of Control or (y) thirty (30) days following such Eligible Participant’s Covered Termination.  An Eligible Participant shall not be entitled to contribute any funds paid to such Eligible Participant pursuant to this Plan to any deferred compensation plan maintained by the Company and, with the exception of continuation healthcare coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or similar state law, shall cease to be eligible to actively participate in any other benefit plan maintained by the Company.  Other than the vesting acceleration provided for in Section 2.2.1, there shall not be any continuing vesting of any outstanding equity award granted to the Eligible Participant by the Company during the period of time in which such Eligible Participant receives salary continuation payments pursuant to this Section 2.1, except as may otherwise be provided in a written agreement between the Company and such Eligible Participant.

If any of the benefits set forth in this Section 2.1 are deferred compensation under Section 409A of the Internal Revenue Code and the rules and regulations thereunder (“Section 409A”), any Covered Termination triggering payment of such benefits must constitute a “separation from service” under Section 409A before, subject to Section 2.1.3  below, distribution of such benefits can commence.  For purposes of clarification, this paragraph shall not cause any forfeiture of benefits on the part of the

2

Participant, but shall only act as a delay until such time as a “separation from service” occurs.

2.1.3Specified Employee Delay. Notwithstanding the foregoing, if any amount to be paid to an Eligible Participant pursuant to this Plan as a result of such Eligible Participant’s termination of employment is “deferred compensation” subject to Section 409A, and if the Eligible Participant is a “Specified Employee” (as defined under Section 409A) as of the date of such Eligible Participant’s termination of employment hereunder, then, to the extent necessary to avoid the imposition of excise taxes or other penalties under Section 409A, the payment of benefits, if any, scheduled to be paid by the Company to such Eligible Participant hereunder during the first six (6) month period following the date of a termination of employment shall not be paid until the date which is the first business day after six (6) months have elapsed since the Eligible Participant’s termination of employment for any reason other than death.  To the extent the amounts to be paid to an Eligible Participant satisfy the separation pay plan exception from deferred compensation described in Treas. Reg. §1.409-1(b)(9)(iii), the amounts will not be treated as deferred compensation subject to this six (6) month delay.  Any deferred compensation payments delayed in accordance with the terms of this Section 2.1.3 shall be paid in a lump sum when paid and any remaining payments thereafter shall continue in accordance with the normal schedule set forth in this Plan.

2.2Acceleration of Vesting of Equity Awards.

2.2.1Acceleration at Covered Termination.  All outstanding stock options granted and restricted stock units, restricted stock, performance shares or other equity award issued by the Company prior to the Change of Control to an Eligible Participant who suffers a Covered Termination shall have their vesting accelerated by an additional thirty (30) months on the date of such Termination Upon Change of Control or Constructive Termination Upon Change of Control.  To the extent any stock options granted and restricted stock units, restricted stock, performance shares or other equity award are subject to Section 409A, vesting will be accelerated only to the extent the acceleration does not violate Section 409A or cause additional taxes or penalties under Section 409A.

2.2.2Acceleration Upon Non-Assumption in a Change of Control.  If there is a Change of Control transaction in which outstanding stock options, restricted stock units, restricted stock, performance shares or other equity awards granted by the Company to an Eligible Participant prior to the transaction are not replaced with a reasonably equivalent incentive program of the Successor, then (i) all such options, restricted stock units, restricted stock, performance shares or other equity awards shall have their vesting fully accelerated so as to be 100% vested and exercisable prior to the effective date of the Change of Control, and (ii) the Company shall provide reasonable prior written notice to the Eligible Participant of (A) the date such unexercised options or other equity awards will terminate, and (B) the period during which the Eligible Participant may exercise the unexercised options or other equity awards.  For the purposes of the foregoing, an option or other equity award shall be deemed to be replaced with a reasonably equivalent incentive program of the Successor if the vesting under the replacement program is not less favorable than the vesting under the option or other equity award and the Board of the Company otherwise determines that the replacement incentive program is reasonably equivalent to the option or other equity award being replaced.  Such a replacement incentive program might include, without limitation, (x) the Successor assuming the option (or substituting a Successor option) whereby the option becomes an option to acquire stock of the Successor in a manner qualifying under Section 424(a) of the Internal Revenue Code of 1986, as amended (the “Code”), (y) the option becomes an option to acquire the same consideration per share of common stock subject to the option as the stockholders of the Company receive for their common stock in the Change of Control transaction (the “Common Change of Control Consideration”), or (z) the Successor establishes a cash incentive program whereby each option is replaced with the opportunity to receive a cash payment equal to the excess of (X) the value of the Common Change of Control Consideration, over (Y) the aggregate exercise price of the Eligible Participant’s unexercised options.  As a condition of such replacement incentive program, the Board of

3

the Company may require that such replacement incentive program comply with Treas. Reg. §1.409A-1(b)(5)(v)(D).  If there is a Change of Control transaction and any outstanding unvested restricted stock units, restricted stock or other equity award granted by the Company to any Eligible Participant that is subject to vesting or a repurchase right in favor of the Company is not replaced with Common Change of Control Consideration, the vesting of such stock shall accelerate (and any repurchase rights shall lapse) so that such stock is completely vested immediately prior to the Change of Control transaction.

2.3Extended Medical and Dental Benefits.

2.3.1Benefit Continuation.  Each U.S. Eligible Participant, who continues to be employed by the Company or its Successor or who makes a valid COBRA election, shall receive continued provision of the Company’s standard employee medical and dental benefit coverages at standard staff rates, as elected by the Eligible Participant and in effect immediately prior to the Change of Control, for so long as, but not to exceed twelve (12) months following a Change of Control, the Eligible Participant is not eligible to receive comparable health insurance coverage from another employer.  Continued health coverage for non-U.S. Eligible Participants shall be negotiated in accordance with applicable law and policy to provide similar coverage.

2.3.2Continued Medical Coverage for U.S. Residents.  If the Eligible Participant resides in the United States, such Eligible Participant shall be entitled to continued medical and dental insurance coverage in accordance with the applicable provisions of U.S. federal law (Title X of the Consolidated Budget Reconciliation Act of 1985 (“COBRA”).  The date of the COBRA “qualifying event” for the Eligible Participant and his or her dependents shall be the date of such Eligible Participant’s Covered Termination. Coverage under Section 2.3.1 will offset the COBRA coverage period.

2.3.3Termination of Coverage.  Notwithstanding the preceding provisions of this Section 2.3, in the event an Eligible Participant dies or becomes covered under another employer’s group health plan during the continuation period (in which case such Eligible Participant promptly shall inform the Company), the Company shall cease provision of continued group health insurance for such Eligible Participant and any dependents to the extent permitted by COBRA.

3.ADJUSTMENT OF EXCESS PAYMENTS PAYABLE TO AN ELIGIBLE PARTICIPANT SUBJECT TO IRC SECTION 4999

In the event it is determined that an Eligible Participant entitled to payments and/or benefits provided by this Plan or any other amounts in the “nature of compensation” (whether pursuant to the terms of this Plan or any other plan, arrangement, or agreement with the Company or any affiliate, any person whose actions result in a change of ownership or effective control of the Company covered by Section 280G(b)(2) of the Code or any person affiliated with the Company or such person) as a result of such change of ownership or effective control of the Company (“Payments”) would be subject to the excise tax imposed by Section 4999 of the Code (the “280G Excise Tax”), the Company shall cause to be determined, before any amounts of the Payments are paid to the Eligible Participant, which of the following two alternative forms of payment would maximize the Eligible Participant’s after-tax proceeds: (i) payment in full of the entire amount of the Payments, or (ii) payment of only a part of the Payments so that the Eligible Participant receives the largest payment possible without the imposition of the 280G Excise Tax (“Reduced Payments”).  If it is determined that Reduced Payments will maximize an Eligible Participant’s after-tax benefit, then (i) cash compensation subject to Section 409A shall be reduced first, then cash payments not subject to Section 409A shall be reduced, (ii) the Payments shall be paid only to the extent permitted under the Reduced Payments alternative, and (iii) the Eligible Participant shall have no rights to any additional payments and/or benefits constituting the Payments.  Unless the Company and Eligible Participant otherwise agree in writing, any determination required under this Section 3 shall be made in writing by independent public accountants agreed to by the Company and the Eligible Participant

4

(the “Accountants”), whose determination shall be conclusive and binding upon the Eligible Participant and the Company for all purposes.  For purposes of making the calculations required by this Section 3, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Eligible Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make the required determinations.  The Company shall bear all fees and expenses the Accountants may reasonably charge in connection with the services contemplated by this Section 3.

4.DEFINITIONS

4.1Capitalized Terms Defined.  Capitalized terms used in this Plan shall have the meanings set forth in this Section 4, unless the context clearly requires a different meaning.

4.2“Cause” means:

(a)theft; a material act of dishonesty or fraud; intentional falsification of any employment or Company records; or the commission of any criminal act which impairs the Eligible Participant’s ability to perform appropriate employment duties for the Company;

(b)improper disclosure or use of the Company’s confidential, business or proprietary information by the Eligible Participant;

(c)the Eligible Participant’s conviction (including any plea of guilty or nolo contendere) for a crime involving moral turpitude causing material harm to the reputation and standing of the Company, as determined by the Company in its sole discretion;

(d)gross negligence or willful misconduct in the performance of the Eligible Participant’s assigned duties; or

(e)repeated failure by the Eligible Participant to perform his or her job responsibilities in accordance with written instructions from such Eligible Participant’s supervisor (which, in the case of the Company’s Chief Executive Officer, shall be the Company’s Board of Directors).

4.3“Change of Control” means:

(a)any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), acquires, pursuant to a tender or exchange offer made directly to the Company’s stockholders, direct or indirect ownership of securities of the Company representing more than 50% of (A) the outstanding shares of common stock of the Company or (B) the combined voting power of the Company’s then-outstanding securities;

(b)the Company is party to a merger or consolidation which results in the holders of voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than  50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or

(c)the sale or disposition of all or substantially all of the Company’s assets (or consummation of any transaction having similar effect) provided that the sale or disposition is of more than two-thirds (2/3) of the assets of the Company.

In any case, a Change of Control must also meet the requirements of a change in ownership or a sale of a substantial portion of the Company’s assets in accordance with Section 409A(a)(2)(A)(v) of the Code and the applicable provisions of Treasury Regulation § 1.409A-3.

4.4“Company” shall mean Caliper Life Sciences, Inc. and, following a Change of Control, any Successor that agrees to assume, or otherwise becomes bound to by operation of law, all the terms

5

and provisions of this Plan.

4.5“Constructive Termination Upon Change of Control” means the termination of employment by an Eligible Participant for Good Reason, as defined in this Plan, within thirteen (13) months after the occurrence of any Change of Control; provided that “Constructive Termination Upon Change of Control” shall not include any termination of the employment of an Eligible Participant (i) by the Company for Cause; (ii) by the Company as a result of the Permanent Disability of the Eligible Participant; (iii) as a result of the death of the Eligible Participant; or (iv) as a result of the voluntary termination of employment by the Eligible Participant for reasons other than Good Reason.

4.6“Covered Termination” shall mean, with respect to an Eligible Participant for purposes of this Plan, a Termination Upon Change of Control or a Constructive Termination Upon Change of Control.

4.7“Effective Date” means November 4, 2008.

4.8“Eligible Participant” shall mean the President and Chief Executive Officer of the Company, each officer of the Company that reports directly to either the President or Chief Executive Officer of the Company, and such other additional employees of the Company as may be designated from time to time after the Effective Date to participate in this Plan by the Compensation Committee of the Board of Directors.

4.9“Good Reason” means the occurrence of any of the following conditions following a Change of Control, without the Eligible Participant’s informed written consent, which conditions remain in effect thirty (30) days after written notice to the Company from the Eligible Participant of such condition during which thirty (30) day period the Company has the right to cure the conditions:

(a)a material reduction in the Eligible Participant’s duties, responsibilities or position;

(b)a material reduction in the Eligible Participant’s base salary or target bonus amount, except for reductions that are concurrent and consistent with reductions in base salary or target bonus amounts for all executives of the Successor following a Change of Control; or

(c)the relocation of the Eligible Participant’s work place for the Company to a location more than thirty-five (35) miles from the location of the work place prior to the Change of Control.

4.10“Permanent Disability” means that:

(a)the Eligible Participant has been incapacitated by bodily injury, illness or disease so as to be prevented thereby from engaging in the performance of such Eligible Participant’s duties;

(b)such total incapacity shall have continued for a period of six (6) consecutive months; and

(c)such incapacity will, in the opinion of a qualified physician, be permanent and continuous during the remainder of such Eligible Participant’s life.

4.11“Successor” means the Company as defined above and any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company.

4.12“Termination Upon Change of Control” means any actual termination of the employment of an Eligible Participant by the Company without Cause during the period commencing thirty (30) days prior to the earlier of (i) the date that the Company first publicly announces it is conducting negotiations leading to a Change of Control, or (ii) the date that the Company enters into a definitive agreement that would result in a Change of Control (even though still subject to approval by the Company’s stockholders

6

and other conditions and contingencies); and ending on the earlier of (x) the date on which the Company announces that the definitive agreement described in clause (ii) above has been terminated or that the Company’s efforts to consummate the Change of Control contemplated by the previously announced negotiations or by a previously executed definitive agreement have been abandoned or (y) the date which is thirteen (13) months after the Change of Control; provided that “Termination Upon Change of Control” shall not include any termination of the employment of an Eligible Participant (i) by the Company for Cause; (ii) by the Company as a result of the Permanent Disability of the Eligible Participant; (iii) as a result of the death of the Eligible Participant, or (iv) as a result of the voluntary termination of employment by the Eligible Participant for reasons other than Good Reason.

5.EXCLUSIVE REMEDY

5.1Sole Remedy for Covered Terminations.  The payments and benefits provided for in Sections 2 and 3 shall constitute an Eligible Participant’s sole and exclusive remedy for any alleged injury or other damages arising out of the cessation of the employment relationship between the Eligible Participant and the Company in the event of the Eligible Participant’s Covered Termination, except as expressly set forth in a written agreement or in a duly executed employment agreement between Company and an Eligible Participant, whether entered into before or after the Effective Date.

5.2No Other Benefits Payable.  An Eligible Participant shall not be entitled to any other compensation, benefits, or other payments from the Company as a result of any termination of employment with respect to which the payments and/or benefits described in Sections 2 and 3 have been provided to the Eligible Participant, except as expressly set forth in a written agreement or in a duly executed employment agreement between Company and an Eligible Participant; provided that nothing in this Plan shall affect an Eligible Participant’s entitlement to receive outplacement and financial planning services ordinarily available to officers upon the termination of their employment by the Company.

5.3Release of Claims.  The Company shall condition payment of the cash severance benefits described in Section 2.1 of this Plan and the stock option, restricted stock unit, restricted stock, performance share or other equity award acceleration described in Section 2.2 upon the delivery by Eligible Participant of a signed release of claims in a form reasonably satisfactory to the Company.

6.PROPRIETARY AND CONFIDENTIAL INFORMATION

The Company shall condition payment of the cash severance benefits described in Section 2.1 of this Plan and the stock option, restricted stock unit, restricted stock, performance share or other equity award acceleration described in Section 2.2 upon the Eligible Participant’s acknowledgment of his or her continuing obligation to abide by the terms and conditions of the Company’s confidentiality and/or proprietary rights agreement between the Eligible Participant and the Company.

7.NON-SOLICITATION

7.1Agreement Not to Solicit.  The Company shall condition payment of the cash severance benefits described in Section 2.1 of this Plan and the stock option, restricted stock unit, restricted stock, performance share or other equity award acceleration described in Section 2.2 upon an Eligible Participant’s agreement, for a period of two (2) years after the Eligible Participant’s Covered Termination, to not, directly or indirectly, solicit the services or business of any employee, distributor, vendor, representative or customer of the Company, or in any other manner persuade any such person or entity to discontinue that person’s or entity’s relationship with or to the Company.

7.2Other Agreements Not Superseded.  No provision of this Plan shall supersede or limit the terms, including more restrictive terms, of any other agreement by an Eligible Participant to refrain from competition with or from soliciting the employees or customers of the Company.

7

8.ARBITRATION

8.1Disputes Subject to Arbitration.  Any claim, dispute or controversy arising out of this Plan, the interpretation, validity or enforceability of this Plan, or the alleged breach thereof shall be submitted by the parties to binding arbitration by the American Arbitration Association; provided, that (i) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with respect to the trade secrets, confidential and proprietary information or other intellectual property of the Company upon an Eligible Participant or any third party; and (ii) this arbitration provision shall not preclude the Company from seeking legal and equitable relief from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of the Company’s intellectual property.  Judgment may be entered on the award of the arbitrator in any court having jurisdiction.

8.2Site of Arbitration. The site of the arbitration proceeding shall be either Boston, Massachusetts or San Francisco, California, depending on which city is closer to the office of the Company where the Eligible Participant was employed by the Company.

9.OTHER BENEFIT PLANS; NONCUMULATION OF BENEFITS

9.1No Limitation of Regular Benefit Plans.  Except as provided in Section 9.2 below, this Plan is not intended to and shall not affect, limit or terminate any plans, programs, or arrangements of the Company that are regularly made available to a significant number of employees, officers or executives of the Company, including without limitation the Company’s stock option plans.

9.2Noncumulation of Benefits.  An Eligible Participant may not cumulate cash severance payments, stock option, restricted stock or other equity award acceleration and excise tax reimbursement benefits under both this Plan and any other agreement or plan or policy of the Company, any statutory or legal allowance or provision, or otherwise.  If an Eligible Participant has any other binding written agreement with the Company which provides that upon a Change of Control or termination of employment such Eligible Participant shall receive one or more of the benefits described in Sections 2 and 3 of this Plan (i.e., the payment of cash compensation or prorated bonus, acceleration of vesting of stock options, restricted stock rights or other equity award, and adjustments or payments relating to federal excise tax), then with respect to those benefits the aggregate amounts payable under this Plan shall be reduced by the amounts paid or payable under such other and separate agreements.

10.SUCCESSORS AND ASSIGNS

10.1Successors of the Company.  The Company will require any Successor expressly, absolutely and unconditionally to assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.  Failure of the Company to obtain such agreement shall be a material breach of this Plan.

10.2No Assignment of Rights.  Except as set forth in Section 10.3, the interest of any Eligible Participant in this Plan or in any distribution to be made under this Plan may not be assigned, pledged, alienated, anticipated, or otherwise encumbered (either at law or in equity) and shall not be subject to attachment, bankruptcy, garnishment, levy, execution, or other legal or equitable process.  Any act in violation of this Section 10.2 shall be void.

10.3Heirs and Representatives of Eligible Participant.  An Eligible Participant’s accrued rights under this Plan shall inure to the benefit of and be enforceable by an Eligible Participant’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devises and legatees.

11.NOTICES

For purposes of this Plan, notices and all other communications permitted or provided for in this

8

Plan shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

If to the Company:	Caliper Life Sciences, Inc.
	Attention: General Counsel
	63 Elm Street
	Hopkinton, MA 01748

and if to an Eligible Participant at the most recent address recorded in the records of the Company.  Either party may provide the other with notices of change of address, which shall be effective upon receipt.

12.AUTHORITY OF THE BOARD OF THE COMPANY

The Board of the Company, or a designated subcommittee thereof, shall have the authority to administer the Plan, interpret the provisions of the Plan and to determine any question arising under, or in connection with the administration or operation of, the Plan, including, without limitations, questions of fact.  If applicable, the Plan shall be interpreted and administered in a manner consistent with Section 409A.

13.SEVERABILITY OF PROVISIONS

If anyone or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.

14.AMENDMENT, SUSPENSION OR TERMINATION

At any time after the Effective Date of this Plan and prior to the date thirty (30) days before the earlier of (i) the date that the Company first publicly announces it is conducting negotiations leading to a Change of Control, or (ii) the date that the Company enters into a definitive agreement that would result in a Change of Control (even though still subject to approval by the Company’s stockholders and other conditions and contingencies), the Board of Directors of the Company shall have the right to amend, suspend or terminate this Plan at any time and for any reason.  Notwithstanding the preceding sentence, however, no amendment or termination of this Plan shall reduce any Eligible Participant’s rights or benefits that have accrued and become payable under this Plan before the date the amendment is adopted or this Plan is terminated, as appropriate.  Any such amendment shall comply with the requirements of Section 409A, if applicable.

15.EFFECTIVE DATE

The Effective Date of this Plan is November 4, 2008.  This Plan amends and restates in its entirety, and supersedes and replaces, the Plan adopted by the Company’s Board of Directors on February 16, 2005, which itself amended and restated the Change of Control Sr. Mgmt Severance/Equity Acceleration Plan adopted by the Company’s Board of Directors on December 6, 2000.

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EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-147571 and File No. 333-129192), and the Registration Statements on Form S-8 (File No. 333-156149, File No. 333-141373, File No. 333-129861, File No. 333-117273, File No. 333-106946, File No. 333-106436, File No. 333-91276, File No. 333-76636, File No. 333-69722, File No. 333-40466 and File No. 333-95007) of Caliper Life Sciences, Inc. of our reports dated March 12, 2009, with respect to the consolidated financial statements and schedule of Caliper Life Sciences, Inc., and the effectiveness of internal control over financial reporting of Caliper Life Sciences, Inc., included in the Annual Report (Form 10-K) for the year ended December 31, 2008.

/s/ Ernst & Young LLP

Boston, Massachusetts
March 12, 2009

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-31.1

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
TO RULE 13A-14(A) AND 15D-14(A)

I, E. Kevin Hrusovsky, certify that:

1.

I have reviewed this annual report on Form 10-K of Caliper Life Sciences, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 13, 2009

By: /s/ E. KEVIN HRUSOVSKY
E. Kevin Hrusovsky

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) AND 15D-14(A)

EX-31.2

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
TO RULE 13A-14(A) AND 15D-14(A)

I, Peter F. McAree, certify that:

1.

I have reviewed this annual report on Form 10-K of Caliper Life Sciences, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 13, 2009

By: /s/ PETER F. MCAREE
Peter F. McAree

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) AND 15D-14(A)

EX-32.1

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EXHIBIT 32.1

CALIPER LIFE SCIENCES, INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Caliper Life Sciences, Inc. (the "Company") on Form 10-K for the year ended December 31, 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.  

By: /s/ E. KEVIN HRUSOVSKY
E. Kevin Hrusovsky
President and Chief Executive Officer

Date: March 13, 2009

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EXHIBIT 32.1

CALIPER LIFE SCIENCES, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

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EXHIBIT 32.2

CALIPER LIFE SCIENCES, INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Caliper Life Sciences, Inc (the "Company") on Form 10-K for the year ended December 31, 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.  

By: /s/ PETER F. MCAREE
Peter F. McAree
Senior Vice President and
Chief Financial Officer

Date: March 13, 2009

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EXHIBIT 32.2

CALIPER LIFE SCIENCES, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002