-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HxZdet7mSwt/kaNq05lE9IFhPwKaiFny86IvD59L1ltk18R16mwHMZsdg5ZMSMKL i1qFzYL1uovF+5ulwIxH5g== 0001104659-08-031877.txt : 20080509 0001104659-08-031877.hdr.sgml : 20080509 20080509161600 ACCESSION NUMBER: 0001104659-08-031877 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20080331 FILED AS OF DATE: 20080509 DATE AS OF CHANGE: 20080509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIPER LIFE SCIENCES INC CENTRAL INDEX KEY: 0001014672 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 330675808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-32976 FILM NUMBER: 08818645 BUSINESS ADDRESS: STREET 1: 68 ELM STREET STREET 2: . CITY: HOPKINTON STATE: MA ZIP: 01748 BUSINESS PHONE: 508-435-9500 MAIL ADDRESS: STREET 1: 68 ELM STREET STREET 2: . CITY: HOPKINTON STATE: MA ZIP: 01748 FORMER COMPANY: FORMER CONFORMED NAME: CALIPER TECHNOLOGIES CORP DATE OF NAME CHANGE: 19990921 10-Q 1 a08-11526_110q.htm 10-Q

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

for the quarterly period ended March 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 # 000-28229

CALIPER LIFE SCIENCES, INC.

(Exact name of registrant as specified in its charter)

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

68 Elm Street

Hopkinton, Massachusetts 01748

(Address and zip code of principal executive offices)

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

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

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

Large accelerated filer o		Accelerated filer x

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

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

NUMBER OF SHARES OF COMMON STOCK OUTSTANDING ON April 30, 2008: 47,781,428

CALIPER LIFE SCIENCES, INC.

TABLE OF CONTENTS

	Page
PART I FINANCIAL INFORMATION	2

Item 1. Financial Statements (unaudited)	2
Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007	2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2008 and 2007	3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007	4
Notes to Condensed Consolidated Financial Statements	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3. Quantitative and Qualitative Disclosures About Market Risk	14

Item 4. Controls and Procedures	15

PART II OTHER INFORMATION	15

Item 1. Legal Proceedings	15

Item 1A. Risk Factors	15

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3. Defaults Upon Senior Securities	16

Item 4. Submission of Matters to a Vote of Security Holders	16

Item 5. Other Information	16

Item 6. Exhibits	17

SIGNATURES	18

EXHIBIT INDEX	19
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

PART I. FINANCIAL INFORMATION

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

Item 1. Financial Statements

	March 31, 2008			December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	13,643		$	15,709
Marketable securities	2,587			3,246
Accounts receivable, net	26,682			30,248
Inventories	23,343			19,572
Prepaid expenses and other current assets	3,834			2,353
Total current assets	70,089			71,128
Property and equipment, net	10,984			11,477
Intangible assets, net	40,335			42,862
Goodwill	80,590			80,836
Other assets	1,051			1,626
Total assets	$	203,049		$	207,929
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,349		$	8,371
Accrued compensation	7,765			6,530
Other accrued liabilities	11,017			12,825
Deferred revenue and customer deposits	18,828			15,553
Current portion of accrued restructuring	1,153			2,112
Total current liabilities	49,112			45,391
Noncurrent portion of accrued restructuring	329			506
Borrowings under credit facility	12,900			12,900
Other noncurrent liabilities	6,950			6,816
Deferred tax liability	1,130			1,130
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding	—			—
Common stock, $0.001 par value; 100,000,000 shares authorized, 47,730,786 and 47,678,611 shares issued and outstanding in 2008 and 2007, respectively	48			48
Additional paid-in capital	375,569			374,629
Accumulated deficit	(244,056		)	(234,120		)
Accumulated other comprehensive income	1,067			629
Total stockholders’ equity	132,628			141,186
Total liabilities and stockholders’ equity	$	203,049		$	207,929

See accompanying notes.

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

	Three Months Ended March 31,
	2008			2007
Revenues:
Product revenue	$	17,665		$	15,261
Service revenue	9,008			8,930
License fees and contract revenue	2,614			4,249
Total revenue	29,287			28,440
Costs and expenses:
Cost of product revenue	11,105			9,967
Cost of service revenue	6,098			5,653
Cost of license revenue	284			442
Research and development	5,532			6,774
Selling, general and administrative	13,932			12,607
Amortization of intangible assets	2,490			2,537
Restructuring charges, net	6			26
Total costs and expenses	39,447			38,006
Operating loss	(10,160		)	(9,566		)
Interest income (expense), net	(155		)	7
Other income, net	407			13
Loss before income taxes	(9,908		)	(9,546		)
Provision for income taxes	(28		)	(51		)
Net loss	$	(9,936	)	$	(9,597	)

Net loss per common share, basic and diluted	$	(0.21	)	$	(0.20	)
Shares used in computing net loss per common share, basic and diluted	47,683			46,979

See accompanying notes.

CALIPER LIFE SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Three Months Ended March 31,
	2008			2007
Operating activities
Net loss	$	(9,936	)	$	(9,597	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization	3,452			3.503
Stock-based compensation expense, net	1,010			1,353
Non-cash restructuring charges, net	6			26
Foreign currency exchange gains	(428		)	(9		)
Changes in operating assets and liabilities:
Accounts receivable	4,021			6,036
Inventories	(3,479		)	(3,044		)
Prepaid expenses and other current assets	(857		)	(1,516		)
Accounts payable and other accrued liabilities	170			(1,202		)
Accrued compensation	1,049			659
Deferred revenue and customer deposits	3,099			3,387
Other noncurrent liabilities	135			(304		)
Payments of accrued restructuring obligations, net	(998		)	(3,223		)
Net cash from operating activities	(2,756		)	(3,931		)

Investing activities
Purchases of marketable securities	(1,232		)	(1,648		)
Proceeds from sales of marketable securities	—			257
Proceeds from maturities of marketable securities	1,883			3,039
Other assets	9			(358		)
Purchases of property and equipment	(417		)	(370		)
Net cash from investing activities	243			920
Financing activities
Payments of obligations under sale-leaseback arrangements	—			(34		)
Borrowings under credit facility	2,000			—
Payments of credit facility and other obligations	(2,000		)	—
Proceeds from issuance of common stock	48			1,311
Net cash from financing activities	48			1,277
Effect of exchange rates on changes in cash and cash equivalents	399			5
Net decrease in cash and cash equivalents	(2,066		)	(1,729		)
Cash and cash equivalents at beginning of period	15,709			11,634
Cash and cash equivalents at end of period	$	13,643		$	9,905

See accompanying notes.

CALIPER LIFE SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

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

Operating results for the three months ended March 31, 2008 are not necessarily indicative of the results that may be expected for the full fiscal year or for any future periods. For example, the Company typically experiences higher revenue in the fourth quarter of its fiscal year due to spending patterns of its customers, and may realize significant periodic fluctuations in license and contract revenue depending on the timing and circumstances of underlying individual transactions.

Caliper currently operates in one business segment: the development and commercialization of life science instruments and related consumables and services for use in drug discovery and development and other life sciences research.

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

Summary of Significant Accounting Principles

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

Fair Values of Assets and Liabilities

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS No. 157”), effective for financial statements issued for fiscal years beginning after November 15, 2007. SFAS No. 157 replaces multiple existing definitions of fair value with a single definition, establishes a consistent framework for measuring fair value and expands financial statement disclosures regarding fair value measurements. SFAS No. 157 applies only to fair value measurements that already are required or permitted by other accounting standards and does not require any new fair value measurements. In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2 (“FSP No. 157-2”), which delayed until the first quarter of 2009 the effective date of SFAS No. 157 for nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis.

The adoption of SFAS No. 157 for Caliper’s financial assets and liabilities in the first quarter of 2008 did not have a material impact on our financial position or results of operations. 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. Caliper does not expect that the adoption of SFAS No. 157 for these nonfinancial assets and liabilities will have a material impact on its financial position or results of operations.

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.

On March 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	3,265	3,265	—	—
Commercial paper	797	—	797	—
U.S. corporate notes and bonds	2,267	—	2,267	—
Other	132	132	—	—
Total	6,461	3,397	3,064	—

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 1because these securities are value based upon quoted prices in active markets or because the investments are actively traded.

Income Taxes

Caliper accounts for income taxes in accordance with FAS 109, Accounting for Income Taxes, and accounts for uncertainty in income taxes recognized in financial statements in accordance with FIN 48, Accounting for Uncertainty in Income Taxes. FIN 48 prescribes a comprehensive model for the recognition, measurement, and financial statement disclosure of uncertain tax positions. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes pursuant to FIN 48. Caliper classifies uncertain tax positions as short-term liabilities within accrued expenses. During the three month period in each of 2008 and 2007, Caliper’s tax provision primarily relates to foreign taxes in jurisdictions where its wholly owned subsidiaries are profitable.

2. Inventories

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

	March 31, 2008		December 31, 2007
Raw material	$	13,079	$	11,228
Work-in-process	1,274		561
Finished goods	8,990		7,783
	$	23,343	$	19,572

3. Intangibles

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

	March 31, 2008		December 31, 2007
Core technologies	$	24,462	$	25,323
Developed and contract technologies	8,214		9,427
Customer contracts, lists and relationships	4,603		5,007
Trade names	2,898		2,898
Other intangibles	158		207
	$	40,335	$	42,862

4. Warranty Obligations

Caliper provides for estimated warranty expenses as a component of cost of revenue at the time product revenue is recognized in accordance with FAS 5, Accounting for Contingencies, and FASB Interpretation No. 45 (FIN 45), Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others. Caliper offers a one-year limited warranty on most products, which is included in the selling price. Caliper’s standard limited warranty covers repair or replacement of defective goods, a preventative maintenance visit on certain products, and telephone-based technical support. Factors that affect Caliper’s warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. Caliper periodically assesses the adequacy of its recorded warranty liabilities and adjusts amounts as necessary.

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

	Three Months Ended March 31,
	2008			2007
Balance at beginning of period	$	1,684		$	2,223
Warranties issued during the period	114			596
Settlements made during the period	(342		)	(597		)
Balance at end of period	$	1,456		$	2,222

5. Comprehensive Loss

Comprehensive loss is as follows (in thousands):

	Three Months Ended March 31,
	2008			2007
Net loss	$	(9,936	)	$	(9,597	)
Unrealized gain on marketable securities	(8		)	(2		)
Foreign currency translation gain	446			9
Comprehensive loss	$	(9,498	)	$	(9,590	)

6. Restructuring Obligations

The following table summarizes restructuring obligations as of March 31, 2008 and related activity during the three months ended March 31, 2008 (in thousands):

	Severance and Related			Facilities			Total
Balance, December 31, 2007	$	9		$	2,609		$	2,618
Adjustments to estimated obligations	—			(212		)	(212		)
Interest accretion	—			74			74
Payments	(9		)	(989		)	(998		)
Balance, March 31, 2008	$	—		$	1,482		$	1,482

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

Years Ended December 31:
2008 (remainder of fiscal year)	$	1,217
2009	355
2010	119
Total minimum payments	1,691
Less: Amount representing interest	(209		)
Present value of future payments	1,482
Less: Current portion of obligations	1,153
Non-current portion of obligations	$	329

Included in the above obligations is estimated sublease income of $0.5 million in 2008, $0.5 million in each of 2009 and 2010, and $0.2 million in 2011.

The restructuring obligations reflected above resulted from the following actions.

Prior Facility Closures

During the period from May 2003 through December 2006, Caliper consolidated certain facilities, the effects of which were originally reflected and have been subsequently adjusted through restructuring charges (credits) in the accompanying statement of operations. These facility closures were accounted for in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, pursuant to which Caliper recorded a liability equal to the fair value of the remaining lease payments as of the cease-use date for each of the closed facilities. Fair value was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 5%), for the space no longer occupied, considering sublease income at each point in time. The consolidated facilities included two vacated facilities in Mountain View, California. These facilities are currently 73% sublet through June 30, 2008, which is also the termination date of Caliper’s leases. As of March 31, 2008, remaining net lease and operating expense payments of approximately $1.0 million remained on these two facilities.

Xenogen Acquisition

In connection with the acquisition of Xenogen Corporation (“Xenogen”), Caliper incurred costs that have been accounted for in accordance with EITF No. 95-3, Recognition of Liabilities in Connection with a Purchase Business Combination, pursuant to which Caliper recorded a liability based on a defined exit plan equal to the fair value of the facility obligations.

In 2006, Caliper consolidated Xenogen’s West Coast operations in Alameda, California into a single facility, leaving one facility unoccupied with the intention to sublease any excess space. As of August 9, 2006, which was the date of the acquisition of Xenogen, Caliper established a liability of $1.0 million related to this lease obligation. The fair value of the lease obligation was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 8.75%) for the space no longer occupied, considering the building’s sublease income potential. The lease term expires April 30, 2011. During 2008, Caliper has decided to
re-occupy the space not under sublease in connection with its consolidation of its West Coast operations from Mountain View, California to Alameda, California. On March 31, 2008, in connection with the 2008 consolidation actions discussed below, Caliper reversed approximately $0.2 million of the restructuring accrual related to the Alameda facility based on the recent plan to re-occupy the space not under sublease and recorded the adjustment to goodwill in the accompanying balance sheet.

In 2006, Caliper also assumed a $1.0 million obligation related to Xenogen’s St. Louis, Missouri facility. The facility closure was previously accounted for in accordance with EITF 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring). The fair value of the assumed obligation was determined based upon the discounted present value of remaining lease rentals (using a discount rate of 8.75%) for the space no longer occupied, considering the sublease income potential of the property. The lease term expires April 30, 2011.

2008 Consolidation Plan

In early 2008, Caliper announced its intentions to consolidate its West Coast business operations to reduce overall facility costs and improve

productivity and effectiveness of its research and development spending. The consolidation entails vacating approximately 37,000 square feet of currently occupied space in Mountain View, California during the third quarter of 2008 and moving approximately 33 employees engaged principally in research and development activities from Mountain View, California into Caliper’s facilities in Alameda, California. The consolidation plan was initiated during the first quarter of 2008 and resulted in first quarter severance and retention charges of approximately $0.4 million in connection with the reduction of approximately 13 positions. These charges are reflected in the accompanying statement of operations, primarily within research and development and general and administrative expenses.

7. Revolving Credit Facility

On February 15, 2008, Caliper entered into an Amended and Restated Loan and Security Agreement (the “Credit Facility”) with a bank, which permits Caliper to borrow up to $25 million in the form of revolving loan advances, including up to $5 million in the form of letters of credit. The Credit Facility amends and restates in its entirety a certain Loan and Security Agreement by and among Caliper and the bank dated as of August 9, 2006, as amended. Principal borrowings under the Credit Facility accrue interest at a floating per annum rate equal to the prime rate if Caliper’s unrestricted cash held at the bank exceeds or is equal to $25 million, or prime plus one-half of one percentage point if Caliper’s unrestricted cash held at the bank is below $25 million. Under the Credit Facility, Caliper is permitted to borrow up to $25 million, provided it maintains unrestricted cash of at least $25 million with the bank, or is otherwise subject to a borrowing base limit consisting of up to (a) 80% of eligible accounts receivable, as defined in the Credit Facility, plus (b) the lesser of 90% of Caliper’s unrestricted cash maintained at the bank or $10 million. The Credit Facility matures on June 30, 2009. The Credit Facility will serve as a source of capital for ongoing operations and working capital needs.

The Credit Facility also includes several potential events of default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at prime plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank’s right to declare all outstanding obligations immediately due and payable. Should an event of default occur, and if based on such default the bank were to decide to declare all outstanding obligations immediately due and payable, Caliper may be required to significantly reduce its costs and expenses, sell additional equity or debt securities, or restructure portions of its business which could involve the sale of certain assets. The sale of additional equity or convertible debt securities may result in additional dilution to Caliper’s stockholders. Furthermore, additional capital may not be available on terms favorable to Caliper, if at all. In this circumstance, if Caliper could not significantly reduce its costs and expenses, obtain adequate financing on acceptable terms when such financing is required or restructure portions of its business, Caliper’s business would be adversely affected.

8. Commitments and Contingencies

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

Years ending December 31:
2008 (remainder of fiscal year)	$	6,750
2009	8,008
2010	5,652
2011	4,696
2012	4,255
Thereafter	7,218
Total minimum lease payments	$	36,578

During March 2008, Caliper amended the lease on its LabChip manufacturing facility to extend the lease term through November 2013. Annual payments under the lease are approximately $1.8 million.

9. Legal Proceedings

Commencing on June 7, 2001, Caliper and three of its officers and directors (David V. Milligan, Daniel L. Kisner and James L. Knighton) were named as defendants in three securities class action lawsuits filed in the United States District Court for the Southern District of New York. The cases have been consolidated under the caption, In re Caliper Technologies Corp. Initial Public Offering Securities Litigation, 01 Civ. 5072 (SAS) (GBD). Similar complaints were filed against approximately 300 other public companies that conducted initial public offerings of their common stock during the late 1990s (the “IPO Lawsuits”). On August 8, 2001, the IPO Lawsuits were consolidated for pretrial purposes before United States Judge Shira Scheindlin of the Southern District of New York. Together, those cases are denominated In re Initial Public Offering Securities Litigation, 21 MC 92(SAS). On April 19, 2002, a Consolidated Amended Complaint was filed alleging claims against Caliper and the individual defendants under Sections 11 and 15 of the Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder. The Consolidated Amended Complaint also names certain underwriters of Caliper’s December 1999 initial public offering of common stock as defendants. The Complaint alleges that these underwriters charged excessive, undisclosed commissions to investors and entered into improper agreements with investors relating to aftermarket transactions. The Complaint seeks an unspecified amount of money damages. Caliper and the other issuers named as defendants in the IPO Lawsuits moved on July 15, 2002, to dismiss all claims on multiple grounds. By Stipulation and Order dated October 9, 2002, the claims against Messrs. Milligan, Kisner and Knighton were dismissed without prejudice. On February 19, 2003, the Court granted Caliper’s motion to dismiss all claims against it. Plaintiffs were not given the right to replead the claims against Caliper. The time to appeal the dismissal has not yet expired. On December 5, 2006 the Court of Appeals for the Second Circuit issued an opinion reversing Judge Scheindlin’s prior certification of the plaintiff classes in several “focus” cases pending before her as part of the consolidated IPO Lawsuits. As a result of this ruling, on June 25, 2007, Judge Scheindlin issued an order terminating the settlement that had previously been agreed to among the plaintiffs, the issuers and their insurers. The parties in the “focus” cases have briefed plaintiffs’ motion seeking certification of a new class of plaintiffs. The final resolution of this litigation is not expected to have a material impact on Caliper.

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. In this suit, 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 the basis of these proceedings, Caliper recorded an accrual as of December 31, 2007 based on its estimate of the probable loss exposure. Caliper and Young entered into a settlement agreement with respect to this litigation on March 28, 2008, in which Caliper agreed to pay Young $1.4 million in settlement of Young’s claims.

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

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

Stock-Based Compensation

Caliper accounts for stock-based compensation in accordance with Statement of Financial Accounting Standard No. 123R, Share-Based Payment (“SFAS 123R”), which requires all share-based payments, including grants of stock options, to be recognized in the income statement as an operating expense, based on their fair values. Caliper estimates the fair value of each option award on the date of grant using a Black-Scholes-Merton based option-pricing model.

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

	Three Months Ended March 31,
	2008		2007
Cost of product revenue	$	81	$	128
Cost of service revenue	21		43
Research and development	93		254
Selling, general and administrative	815		928
Total	$	1,010	$	1,353

On March 31, 2008, Caliper had five share-based compensation plans (the “Plans”), which are described within Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

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

	Three Months Ended March 31,
	2008	2007
Expected volatility (%)	42.5	40
Risk-free interest rate (%)	2.3	4.5
Expected term (years)	4.2	4.2
Expected dividend yield (%)	—	—

Options and Restricted Stock Activity

A summary of stock option and restricted stock activity under the Plans as of March 31, 2008, and changes during the three months then ended is as follows:

Stock Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
						(in thousands)

Outstanding at December 31, 2007	7,159,848		$	5.69
Granted	986,250		4.09
Exercised	(14,446	)	3.29
Canceled	(64,896	)	5.84
Outstanding at March 31, 2008	8,066,756		$	5.50	5.46	$	1,487
Exercisable at March 31, 2008	4,989,230		$	5.64	5.05	$	1,487
Unvested at March 31, 2008	3,077,526		$	5.27	6.13	$	—

Restricted Stock Units	Shares		Weighted Average Grant Date Fair Market per Share Value
Outstanding and non-vested at December 31, 2007	646,641		$	5.99
Granted	294,500		4.09
Vested	(81,390	)	6.04
Unvested repurchases	(4,947	)	6.15
Outstanding and non-vested at March 31, 2008	834,804		5.26

During the three months ended March 31, 2008, Caliper granted its employees 986,250 options at a weighted average grant date fair value of $1.51 per share using a Black-Scholes-Merton based option pricing model. The total intrinsic value of options exercised during the three months ended March 31, 2008 was approximately $23,000. The total fair value of restricted stock that vested during the three months ended March 31, 2008 was approximately $492,000.

As of March 31, 2008, there was $8.6 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average remaining service (vesting) period of approximately 2.8 years.

Common Shares Outstanding

During the three months ended March 31, 2008, Caliper issued 67,175 shares of common stock as a result of stock purchases under Caliper’s employee stock purchase plan, stock option exercises and vesting of restricted stock.

Net Loss per Weighted Average Common Share Outstanding

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

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

	Three Months Ended March 31, 2008,
	2008	2007
Basic and diluted	47,683	46,979
Anti-dilutive common stock equivalents excluded from calculation of diluted net loss per share (prior to the application of the treasury stock method)	14,955	13,857

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

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

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

Executive Summary

Business

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

We have multiple channels of distribution for our products: direct to customers, indirect through our international network of distributors, through partnership channels under our Caliper Driven program and through joint marketing agreements. Through our direct and indirect channels, we sell products, services and complete system solutions, developed by us, to end customers. Our Caliper Driven program is core to our business strategy and complementary to our direct sales and distribution network activities, as it enables us to extend the commercial potential of our LabChip and advanced liquid handling technologies into new industries and new applications with experienced commercial partners. We also utilize joint marketing agreements to enable others to market and distribute our products. By using direct and indirect distribution, and out-licensing our technology under our Caliper Driven program, we seek to maximize penetration of our products and technologies into the marketplace and position Caliper as a leader in the life sciences tools market.

General Overview

During the three months ended March 31, 2008, our revenues increased to $29.3 million, from $28.4 million for the same period in 2007. Our operating loss was $10.2 million compared to $9.6 million in the first quarter of 2007. The increased operating loss reflected the impact of lower overall gross margin as a result of a significant year over year shift in the composition of revenues, which increased by $2.5 million, or 10%, at the combined product and service lines, and decreased by $1.6 million, or 38%, on the license fee and contract revenue line. This overall mix shift was in line with our expectation of growing our products and services in the low double digits over the course of 2008, and offsetting approximately $10.0 million of non-recurring license and contract revenue achieved in 2007.

Our business consists of imaging, microfluidics, automation and services product families. Product and service revenue growth reflected strong results within our optical imaging and automation product families, including growth of 26% and 20%, respectively. Our Discovery Alliances and Services (CDAS) group had lower than anticipated revenues during the first quarter due to delays with two major contracts, the effects of which are expected to be made up over the remainder of 2008.

Combined product and service margins were even with the first quarter of 2007 at 35.5%, but were slightly lower than expected as a result of higher product revenue in relation to service revenue and a mix of product revenue which was geared toward higher cost and lower margin systems.

Our total operating expenses of $19.5 million were even with the first quarter of 2008, but reflected severance costs of $0.6 million related to cost-cutting initiatives and an incremental year on year unfavorable change of approximately $0.3 million in legal expenses related to litigations which were settled near the end of the quarter.

We recently concluded two disputes involving litigation, including a settlement with AntiCancer, where we expanded and clarified our imaging intellectual property in support of our licensing and imaging system business. In addition, we initiated a plan to consolidate our West Coast R&D operations and have taken steps to reduce general and administrative costs to improve our operating expense productivity.

Looking beyond the first quarter, our revenue outlook for the second quarter of 2008 is $33.0 to $36.0 million, including combined product and service growth in the high single digits to low double-digits, and our revenue outlook for the full year 2008 remains $132.0 to $138.0 million.

Critical Accounting Estimates

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

Results of Operations for the Three Months Ended March 31, 2008

Operating results for the three months ended March 31, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. For example, we typically experience higher revenues in the fourth quarter of our fiscal year as a result of the capital

spending patterns of our customers. During the three months ended March 31, 2008, the effect on revenues related to foreign exchange resulted in a 3% favorable impact compared to the prior year.

	Three Months Ended March 31,
(In thousands)	2008		2007		$ Change			% Change
Product revenue	$	17,665	$	15,261	$	2,404		16	%
Service revenue	9,008		8,930		78			1	%
License fees and contract revenue	2,614		4,249		(1,635		)	(38	)%
Total Revenues	$	29,287	$	28,440	$	847		3	%

Product Revenue. Product revenue increased during the three months ended March 31, 2008 compared to the same quarter in 2007 due primarily to a $1.3 million, or 20%, increase, in sales of liquid handling and automation products and a $1.3 million, or 26%, increase in sales of optical imaging products. All other product lines decreased by approximately $0.2 million, or 4% compared to the first quarter of 2007. Sales of liquid handling and automation products were driven primarily by increased demand for Staccato systems, which are used in screening and other high throughput applications, as well as continued growth in unit placements of the Zephyr liquid handler, which was introduced in 2007. Demand for Staccato systems was strong outside of the United States, and was aided by reduced competition and the ACES (Automation, Consulting, Engineering and Services) rebranding of our systems integration group. Optical imaging product sales increased as a result of increased unit sales of IVIS Spectrum, our high-end imaging instrument. In addition, we had an 8% increase in overall imaging unit placements in comparison to the first quarter of 2007. During the first quarter of 2008, overall microfluidic product sales decreased by approximately $0.2 million compared to the first quarter of 2007. This decrease was caused mainly by a reduction in datapoint sales to one of our customers that is experiencing financial difficulties, and the phasing out of the more expensive LabChip 3000 instrument in favor of the newer and lower priced EZ Reader instruments, which were introduced in 2007. We believe we will realize a continuing steady increase in demand for EZ Reader instruments and associated consumable ProfilerPro assay kits which we expect will eventually offset the declining LabChip 3000 revenues. Notwithstanding the above mentioned loss of datapoint revenues, sales of chips and reagent consumables increased by approximately $0.4 million compared to the first quarter of 2007 due to our broader installed base.

Service Revenue. Overall service revenue increased slightly during the three months ended March 31, 2008 compared to the same period in 2007. Service revenue was adversely affected by a delay in the start of 2008 services to be provided under a large multi-year phenotyping project awarded to our Caliper Discovery Alliances and Services (CDAS) unit in 2007. This delay resulted in $0.9 million in decreased revenues compared to the first quarter of 2007, which was the final contract period of the predecessor agreement to this latest contract renewal. Offsetting this, however, we experienced a $0.5 million increase in service contract and billable revenue associated with our optical imaging product lines and a $0.3 million increase in in vitro drug discovery services performed by CDAS. We expect to realize an increase in revenues from CDAS’s phenotyping services over the remainder of 2008 as work ensues on the above-mentioned phenotyping project and we continue to build new business based upon our phenotyping service capabilities.

License Fees and Contract Revenue. License fees and contract revenue decreased during the three months ended March 31, 2008 compared to the same period in 2007 primarily as a result of an anticipated $1.4 million decrease in one-time microfluidics patent portfolio related license revenue and a decrease in contract research collaboration revenue of approximately $1.2 million due to projects completed in 2007 within our collaboration business channel. These amounts were offset by a $1.0 million increase in end user imaging license fees realized during the first quarter in comparison to the first quarter of 2007. This increase resulted primarily from a $0.6 million deferred revenue adjustment in 2007 related to the Xenogen acquisition as well as an increase in commercial placements of imaging systems over the prior twelve months.

Costs of Revenue

	Three Months Ended March 31,
(In thousands)	2008		2007		$ Change			% Change
Product	$	11,105	$	9,967	$	1,138		11	%
Service	6,098		5,653		445			8	%
License and contract	284		442		(158		)	(36	)%
Total Costs	$	17,487	$	16,062	$	1,425		9	%

Cost of Product Revenue. Cost of product revenue increased during the three months ended March 31, 2008 primarily as a result of the overall increase in product sales, but also to a lesser extent due to the revenue shift described above involving Staccato sales which incorporate a higher cost of materials due primarily to greater third party material content. Overall manufacturing spending involving labor and overhead associated with product sales decreased by approximately $0.1 million during the first quarter of 2008 in comparison to the first quarter of 2007.

Cost of Service Revenue. Cost of service revenue increased during the three months ended March 31, 2008 compared to 2007 primarily due to labor and other costs associated with instrument services, and to a lesser extent as a result of variable spending on project materials associated with the increase in in vitro CDAS service revenue in comparison to the first quarter of 2007.

Cost of License Revenue. Cost of license revenue decreased during the three months ended March 31, 2008 compared to the same period in 2007 as a result of sublicense royalties due in the 2007 period to certain third parties for in-licensed patent technologies. These license fees were non-recurring in 2008.

Gross Margins. Gross margin on product revenue was 37.1% for 2008, as compared to 34.7% in 2007. This was a result of the greater leverage of fixed costs over a higher sales volume, partially offset by an increase in material costs driven by the product mix influence resulting from sales of higher cost systems, including Staccato and Spectrum instruments described above. Gross margin on service revenue was 32.3% for 2008 and 36.7% for 2007, resulting from the decrease of $0.9 million in CDAS revenues during the three months ended March 31, 2008.

Expenses

	Three Months Ended March 31,
(In thousands)	2008		2007		$ Change			% Change
Research and development	$	5,532	$	6,774	$	(1,242	)	(18	)%
Selling, general and administrative	13,932		12,607		1,325			11	%
Amortization of intangible assets	2,490		2,537		(47		)	(2	)%
Restructuring charges, net	6		26		(20		)	(77	)

Research and Development Expenses. Research and development spending decreased by $1.2 million during the three months ended March 31, 2008 as compared to the same period in 2007. This was due primarily to reduced spending related to microfluidic collaboration projects that ended in 2007 as well as reduced spending in the area of automation. The decrease consisted of a number of changes in spending, including a $0.7 million reduction in labor-related costs, $0.3 million in reduced material and operating supplies, $0.3 million decrease in facility and information technology allocations that are driven based on headcount and square footage which have been reduced in 2008, and a $0.3 million reduction in all other costs. Offsetting these decreases was a $0.4 million severance charge related to our plan to consolidate the research and development activities of our West Coast operations.

In addition to the first quarter charge, we estimate total additional costs associated with the West Coast consolidation to be approximately $3.1 million. The following are the major categories of the additional costs expected to be incurred: (1) approximately $0.4 million in employee severance and retention costs spread evenly over the remainder of the fiscal year; and (2) approximately $2.7 million in facility abandonment charges in the third quarter. We estimate that ongoing facility cash outflow, primarily rent payments net of sublease income, will be spread over the 5.6 years remaining on our Mountain View, California lease. This facility closure will be accounted for in accordance with SFAS No. 146, pursuant to which we will record a liability equal to the fair value of the remaining lease payments, net of expected sublease payments, as of the cease-use date.

Based on preliminary financial data for the first fiscal quarter ended March 31, 2008, we expect this initiative to result in annual cost savings of approximately $3.3 million, including annual facility costs of $1.5 million and headcount savings of $1.8 million once fully implemented, and we expect to incur total costs of approximately $3.7 million in fiscal year 2008 to achieve these savings. The major elements of this recent consolidation plan are expected to be completed on or prior to September 30, 2008.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $1.3 million during the three months ended March 31, 2008 compared to the same period in 2007 primarily due to an increased investment in selling and marketing personnel of $0.7 million, an increase of $0.3 million for litigation costs incurred related to two legal matters that were resolved within the period, severance costs of $0.2 million and all other costs of $0.1 million. During the three months ended March 31, 2008, we incurred $1.2 million of legal costs which included certain litigation costs for the matters involving AntiCancer and Young & Partners which are discussed within Notes to the Consolidated Financial Statements, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. We expect quarterly spending with respect to litigation matters to decrease by $0.5 million or greater in future quarters assuming no new material litigation or other threatened actions arise.

Amortization of Intangible Assets. The amortization of intangible assets for the three months ended March 31, 2008 relates to assets acquired in our previous business combinations. Amortization is computed based upon the estimated timing of the undiscounted cash flows used to value each respective asset over the estimated useful life of the particular intangible asset, or using the straight-line method over the estimated useful life of the intangible asset when the pattern of cash flows is not necessarily reflective of the true consumption rate of the particular intangible asset.

Restructuring Charges. We incurred restructuring charges in 2008 and 2007 related to acquisition and integration activities that are more fully discussed in Note 6 to the accompanying financial statements. Restructuring charges during the three month periods ending March 31, 2008 and 2007 relate to accretion of interest on facilities, net of sub-lease income and adjustments to the operating expense assumptions on certain facilities.

Interest and Other Income (Expense), Net

	Three Months Ended March 31,
(In thousands)	2008			2007		$ Change			% Change
Interest income (expense), net	$	(155	)	$	7	$	(162	)	(2,314	)%
Other income, net	407			13		394			3,031	%

Interest Income (Expense), Net. Interest income (expense), net, decreased during the three months ended March 31, 2008 compared to the same period in 2007, primarily due to lower balances of cash, cash equivalents and marketable securities. In addition, interest expense was $0.3 million in 2008, compared to $0.2 million in 2007 related to the increased outstanding borrowing under our credit facility.

Other Income, Net. Other income, net, increased on a three month basis compared to 2007 due to transaction gains on foreign denominated accounts receivable due to weakening of the dollar in comparison primarily to the Euro and the Yen. During the three months ended March 31, 2008, we incurred foreign currency transaction gains of approximately $0.4 million, compared to no impact (gain or loss) for the same period in 2007.

Liquidity and Capital Resources

As of March 31, 2008, we had $16.2 million in cash, cash equivalents and marketable securities, as compared to $19.0 million as of December 31, 2007.

As noted in Note 7 of the Notes to Consolidated Financial Statements, on February 15, 2008, we entered into an Amended and Restated Loan and Security Agreement (Credit Facility) with a bank, which permits us to borrow up to $25 million in the form of revolving loan advances, including up to $5 million in the form of letters of credit. The Credit Facility amends and restates in its entirety a previous Loan and Security Agreement between us and the bank dated as of August 9, 2006, as amended. Principal borrowings under the Credit Facility accrue interest at a floating per annum rate equal to the prime rate if our unrestricted cash held at the bank exceeds or is equal to $25 million, or prime plus one-half of

one percentage point if our unrestricted cash held at the bank is below $25 million. Under the Credit Facility, we are permitted to borrow up to $25 million, provided we maintain unrestricted cash of at least $25 million with the bank. Otherwise our ability to borrow under the Credit Facility is subject to a borrowing base limit consisting of up to (a) 80% of eligible accounts receivable, as defined in the Credit Facility, plus (b) the lesser of 90% of our unrestricted cash maintained at the bank or $10 million. The Credit Facility matures on June 30, 2009. The Credit Facility will serve as a source of capital for ongoing operations and working capital needs.

The Credit Facility includes traditional lending and reporting covenants including that certain financial covenants applicable to liquidity and earnings are to be maintained by us and tested as of the last day of each quarter. The Credit Facility also includes several potential events of default such as payment default, material adverse change conditions and insolvency conditions that could cause interest to be charged at prime plus two percentage points, or in the event of any uncured events of default (including non-compliance with liquidity and earnings financial covenants), could result in the bank’s right to declare all outstanding obligations immediately due and payable. Should an event of default occur, and if based on such default the bank were to decide to declare all outstanding obligations immediately due and payable, we may be required to significantly reduce our costs and expenses, sell additional equity or debt securities, or restructure portions of our business which could involve the sale of certain assets. The sale of additional equity or convertible debt securities may result in additional dilution to our stockholders. Furthermore, additional capital may not be available on terms favorable to us, if at all. In this circumstance, if we could not significantly reduce our costs and expenses, obtain adequate financing on acceptable terms when such financing is required or restructure portions of our business, our business would be adversely affected.

Cash Flows

	Three Months Ended March 31,
(In thousands)	2008			2007			$ Change
Cash provided by (used in)
Operating Activities	$	(2,756	)	$	(3,931	)	$	1,175
Investing Activities	243			920			(677		)
Financing Activities	48			1,277			(1,229		)

Operating Activities. During the three months ended March 31, 2008, we used $2.8 million of cash for operating activities which included approximately $1.0 million related to our idle facilities. We used approximately $1.8 million of cash to fund operations and working capital needs, which primarily related to a $3.5 million increase in inventory within the period, offset by an increase in customer deposits of approximately $1.9 million, and a $0.2 million increase in all other working capital.

Investing Activities. During the three months ended March 31, 2008, net proceeds from purchases, sales and maturities of marketable securities generated $0.6 million of cash which we used primarily for operations. Our primary investing activities were the purchase of property and equipment of $0.4 million.

Financing Activities. During the three months ended March 31, 2008, financing cash proceeds were from option exercises.

Contractual Obligations

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

Capital Requirements

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

· continued market acceptance of our in vivo imaging, microfluidic and lab automation products;

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

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

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

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

· other factors not within our control.

Based on current plans, we expect that revenue from operations, our current cash balances and borrowing availability under our credit facility will be sufficient to fund our operations at least through the end of 2008.

Item 3 Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Sensitivity

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

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures. We have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation as of March 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 first quarter of 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II—OTHER INFORMATION

Item 1. Legal Proceedings

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. In this suit, 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 the basis of these proceedings, Caliper recorded an accrual as of December 31, 2007 based on its estimate of the probable loss exposure. Caliper and Young entered into a settlement agreement with respect to this litigation on March 28, 2008, pursuant to which Caliper agreed to pay Young $1.4 million in settlement of Young’s claims.

From time to time Caliper is involved in litigation arising out of claims in the normal course of business. Based on the information presently available, management believes that there are no outstanding claims or actions pending or threatened against Caliper, the ultimate resolution of which will have a material adverse effect on our financial position, liquidity or results of operations, although the results of litigation are inherently uncertain, and adverse outcomes are possible.

Item 1A. Risk Factors

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

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

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

On February 26, 2008, we announced that we would undertake a plan to reduce general and administrative costs and improve productivity, and consolidate our West Coast business operations to reduce overall facility costs and improve productivity and effectiveness of our research and development spending. Based on preliminary financial data for the first fiscal quarter ended March 31, 2008, we expect this initiative to result in annual cost savings of approximately $3.3 million once fully implemented, and we expect to incur costs of approximately $3.7 million in fiscal 2008 to achieve this projected savings. A first quarter severance and retention charge of approximately $0.6 million was recorded for the West Coast consolidation and other streamlining actions taken during the quarter.

In addition to the first quarter charge, we estimate total additional costs associated with the West Coast consolidation to be approximately $3.1 million. The following are the major categories of the additional costs expected to be incurred: (1) approximately $0.4 million in employee severance and retention costs spread evenly over the remainder of the fiscal year; and (2) approximately $2.7 million in facility abandonment charges in the third quarter. We estimate that ongoing Mountain View, California facility cash outflow, primarily rent payments net of sublease income, will be spread over the 5.6 years remaining on our Mountain View, California lease. The consolidation entails moving approximately 33 employees engaged principally in research and development activities from Mountain View, California to our facilities in Alameda, California. The consolidation resulted in a reduction of approximately 13 positions.

Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number		Description of document
10.1		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.

10.2		Consulting Agreement, dated March 10, 2008, between Caliper and Dr. Daniel Kisner.

10.3		Separation Agreement dated April 4, 2008, between Caliper and Mr. Thomas Higgins.

10.4		Consulting Agreement, dated April 5, 2008, between Caliper and Mr. Thomas Higgins.

31.1		Certification of Chief Executive Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

32.2*		Certification of Chief Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

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

SIGNATURES

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

	CALIPER LIFE SCIENCES, INC.

Date: May 9, 2008
	By:	/s/ E. KEVIN HRUSOVSKY
		E. Kevin Hrusovsky
		Chief Executive Officer and President

Date: May 9, 2008
	By:	/s/ PETER F. MCAREE
		Peter F. McAree
		Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number		Description of document
10.1		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.

10.2		Consulting Agreement, dated March 10, 2008, between Caliper and Dr. Daniel Kisner.

10.3		Separation Agreement dated April 4, 2008, between Caliper and Mr. Thomas Higgins.

10.4		Consulting Agreement, dated April 5, 2008, between Caliper and Mr. Thomas Higgins.

31.1		Certification of Chief Executive Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

32.2*		Certification of Chief Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

EX-10.1 2 a08-11526_1ex10d1.htm EX-10.1

Exhibit 10.1

AMENDMENT TO

LEASE AGREEMENT

by and between

605 EAST FAIRCHILD ASSOCIATES, L.P.,

a California limited partnership

(“Landlord”)

and

CALIPER LIFE SCIENCES, INC.,

a Delaware corporation

(“Tenant”)

AMENDMENT TO LEASE AGREEMENT

This Amendment to Lease Agreement (this “Amendment”) is entered into as of March 18, 2008, by and between 605 EAST FAIRCHILD ASSOCIATES, L.P., a California limited partnership (herein called “Landlord”), and CALIPER LIFE SCIENCES, INC., formerly known as Caliper Technologies Corp. (herein called “Tenant”).

RECITALS

A. Landlord and Tenant entered into that certain Lease Agreement dated as of October 15, 1998 (the “Lease”), pursuant to which Landlord leased to Tenant, and Tenant hired from Landlord, one entire building (the “Building”) on certain real property located in Mountain View, California, as more particularly described in the Lease (the “Premises”), on the terms and conditions contained therein.

B. Tenant and Landlord now desire to amend the Lease to, among other things, extend the term of the Lease, all in accordance with this Amendment.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the adequacy of which is hereby acknowledged by the parties, Tenant and Landlord hereby agree as follows:

1. Certain Defined Terms.

1.1 All capitalized terms used in this Amendment and not defined herein shall have the meanings set forth in the Lease.

2. Lease Amendments.

2.1 Basic Lease Information. The “Basic Lease Information” from the Lease is amended as follows:

(a) “Lease Term”: The initial term of the Lease is being extended for a period of five (5) years. Accordingly, the existing provision defining the “Lease Term” is amended to read, in its entirety, as follows:

Lease Term: The initial term of this Lease shall commence on the Occupancy Date and shall expire on November 30, 2013, with the right to extend for one (1) additional five (5) year term in accordance with Paragraph 43 [Option to Renew].

(b) “Expiration Date”: The existing provision defining the “Expiration Date” is amended to read, in its entirety, as follows:

Expiration Date: November 30, 2013

(c) “Monthly Base Rent” and “Base Rent Adjustment”: The Monthly Base Rent under the Lease will be adjusted beginning December 1, 2008. Accordingly, the existing provisions defining “Monthly Base Rent” and “Base Rent Adjustment” are deleted in their entirety and replaced with the following:

Monthly Base Rent: The Monthly Base Rent during the initial Term (as extended by this Lease Amendment) shall be as follows:

Year	Monthly Base Rent
12/1/1998 to 11/30/1999	$	125,398.35
12/1/1999 to 11/30/2000	$	129,160.30
12/1/2000 to 11/30/2001	$	133,035.11
12/1/2001 to 11/30/2002	$	137,026.16
12/1/2002 to 11/30/2003	$	141,136.94
12/1/2003 to 11/30/2004	$	145,371.05
12/1/2004 to 11/30/2005	$	149,732.18
12/1/2005 to 11/30/2006	$	154,224.15
12/1/2006 to 11/30/2007	$	158,850.87
12/1/2007 to 11/30/2008	$	163,616.40
12/1/2008 to 11/30/2009	$	141,406.65
12/1/2009 to 11/30/2010	$	145,648.85
12/1/2010 to 11/30/2011	$	150,018.32
12/1/2011 to 11/30/2012	$	154,518.86
12/1/2012 to 11/30/2013	$	159,154.43

On each anniversary of the commencement of the Extension Term (if any), the Monthly Base Rent shall increase by three (percent (3%) of the Monthly Base Rent applicable to the month immediately prior to the applicable anniversary.

2.2 Term.

(a) Paragraph 3(a) of the Lease is amended to read, in its entirety, as follows:

(a) The term of this Lease (the “Term”) shall be for a period of time specified in the Basic Lease Information (unless sooner terminated pursuant to Paragraphs 11(c), 20, 21(b),

22, or 23), provided that Tenant shall have an option to extend the Term in accordance with the terms and conditions of Paragraph 43 [Option to Renew]. Tenant shall accept the Premises in an “as-is” condition. The “Occupancy Date” and the “Rent Commencement Date” are December 1, 1998, and the “Expiration Date” is November 30, 2013, subject to extension pursuant to Paragraph 43.

(b) Paragraph 3(d) of the Lease is deleted in its entirety.

2.3 Additional Alterations. Paragraph 8 of the Lease is amended as follows:

(a) The following shall be added at the end of Paragraph 8(b):

Landlord may condition its consent to any proposed Alterations on a requirement that funds in an amount reasonably determined by Landlord’s designated contractor to be sufficient to cause the removal of such Alterations and restoration of the Premises to the condition required by Paragraph 8(e) below upon the expiration or termination of this Lease be provided by Tenant to Landlord upon Landlord’s approval of such Alterations, to be held as additional security for Tenant’s obligations under Paragraph 8(e).

(b) Paragraph 8(c) shall be amended by deleting the existing clause (y) in such Paragraph and replacing it with the following:

(y) unless the proposed Alteration consists solely of carpeting, painting and similar cosmetic items, the cost of each such Alteration (or group of Alterations, if occurring substantially at the same time and as part of a single project) does not exceed Five Thousand Dollars ($5,000), and the cost of all such Alterations in any twelve (12) month period during the Term in the aggregate does not exceed Ten Thousand Dollars ($10,000). . .

(c) Paragraph 8(e) shall be amended by deleting the first sentence of such Paragraph and replacing it with the following:

Tenant acknowledges that Landlord intends that the Building be configured for a single tenant upon the expiration or termination of this Lease. Accordingly, upon the expiration or sooner termination of the Term, Tenant shall upon demand by Landlord, at Landlord’s election and at Tenant’s sole cost and expense, forthwith and with all due diligence remove any Alterations made by or for the account of Tenant that are inconsistent with the base building configuration depicted on Exhibit A attached to this Amendment and designated by Landlord to be removed and restore the Premises as required by Paragraph 26(b) [Delivery and Restoration of the Premises].

2.4 Assignment and Subletting; Bonus Rent. Paragraph 11(e) of the Lease is amended by deleting the second sentence of such Paragraph and replacing it with the following:

However, fifty percent (50%) of any rent or other consideration realized by Tenant under any such Assignment or Sublease in excess of the Base Rent and Additional Charges payable hereunder (or the amount thereof proportionate to the portion of the Premises subject to such Sublease or Assignment) shall be paid to Landlord, after deducting therefrom (i) the fully amortized value assuming an 8% interest rate of Alterations installed by Tenant and associated costs required by Landlord to remove the alterations accordingly to the last sentence of Paragraph 8(b) [Landlord’s Consent to Tenant’s Alterations] which are located on the portion of the Premises subject to such Sublease or Assignment as of the effective date of such Assignment or Sublease which are attributable to and allocated in equal installments over the term of the Sublease or Assignment; (ii) any customary brokers’ commissions and legal fees that Tenant has incurred in connection with such Assignment or Sublease fully amortized using an 8% interest rate over the term of the Sublease or Assignment; (iii) costs reasonably incurred by Tenant for demising walls and/or other improvements or alterations necessary to cause the Premises to be suitable for multiple tenants to obtain the Sublease and/or Assignment, which costs shall be amortized using an 8% interest rate over the term of the applicable Sublease or Assignment; and (iv) any free rent provided by Tenant to its subtenant or assignee to obtain the Sublease and/or Assignment, which shall be amortized on a straight line basis (without interest) over the term of the applicable Sublease or Assignment.

2.5 Signage. Paragraph 42 of the Lease is amended by adding the following at the end of the first sentence in such Paragraph:

, one of which locations may be for the use of a subtenant. In addition, Tenant may request additional signage which shall be subject to the prior approval of Landlord, which shall not be unreasonably withheld, and compliance with all applicable governmental requirements including, without limitation, local planning, building and zoning ordinances.

2.6 Option to Renew. Paragraph 43 of the Lease is amended by replacing the phrase “eighteen (18) months” with the phrase “twelve (12) months.”

2.7 Required Condition of Premises Upon Surrender. Exhibit “E” to the Lease is deleted in its entirety and replaced with the Exhibit “E” attached to this Amendment.

3. Brokers and Commissions. Each party represents that it has not had dealings with any real estate broker, finder or other person with respect to this Amendment in any manner (including, without limitation, the brokers listed in the Basic Lease Information of the Lease), except for Cornish & Carey Commercial and Lincoln Property Company both representing Tenant, who shall be paid by Landlord in the amount of Three Hundred Sixty Thousand Three Hundred Fifty-Eight and 61/100 Dollars ($360,358.61) upon satisfaction of all of the following conditions: (a) full execution of this Amendment by Landlord and Tenant; (b) payment by Tenant of all Rent due for the month of December 2008 and all prior months, and (c) no uncured default by Tenant, and no event that with the passage of time or giving of notice or both could result in a default, having occurred and be continuing as of December 1, 2008. Each party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder or other person with whom the other party has or purportedly has dealt.

4. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Facsimile or electronically scanned and transmitted copies of original signatures shall be deemed originals.

5. No Other Amendments. Except as amended by this Amendment, the terms of the Lease, including all exhibits and schedules attached thereto, shall remain unmodified and in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

LANDLORD:

605 EAST FAIRCHILD ASSOCIATES, L.P.,
a California limited partnership

By:	M-D Ventures, Inc.
	a California corporation
Its:	General Partner

	By:
		John Mozart
		President

TENANT:

CALIPER LIFE SCIENCES, INC.,
a Delaware corporation


By:
	Bruce Bal, Sr. Vice President - Operations

Exhibit “A” to Lease Amendment

See attached.

[Attach base building diagram from LOI]

Exhibit “E” to Lease

REQUIRED CONDITION OF PREMISES UPON SURRENDER

Upon termination of the Lease, the Premises shall be returned to Landlord with all Building Systems and elevator, fire and gas systems in good working order and maintained with any necessary repairs completed in the reasonable opinion of Landlord’s subcontractor, and all operating manuals and maintenance records with respect to such systems shall be delivered to Landlord. All space in the Premises shall be “broom clean” and well-maintained with walls touched up sufficient so they are scuff free and in neat and clean condition, and carpet shampooed and presentable for re-leasing, with any damaged carpet replaced or repaired. All window coverings shall be cleaned and any damaged coverings repaired or replaced. Any damaged ceiling tiles shall be replaced and all light fixtures shall be fully operational and clean. All doors shall be presentable and damaged doors repaired or replaced. Bathrooms shall be freshly mopped and all tile surfaces cleaned. Any damaged bathroom partitions or fixtures shall be repaired or replaced. The exterior and interior of all windows shall be washed and all interior partition glass shall be cleaned. If Tenant is obligated to remove or restore any Alterations upon termination or expiration of the Lease pursuant to Paragraph 8 of the Lease, the affected area will be returned to Landlord in the form consistent with Exhibit “A” attached to this Amendment and otherwise in the condition described in this Exhibit “E” above.

EX-10.2 3 a08-11526_1ex10d2.htm EX-10.2

EXHIBIT 10.2

CALIPER LIFE SCIENCES, INC.

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of the 10^th day of March, 2008 by and between CALIPER LIFE SCIENCES, INC., a Delaware corporation (the “Company”), and DR. DANIEL KISNER (“Contractor”).

RECITALS

WHEREAS, the Company and Contractor previously entered into that certain Key Employee Agreement dated as of July 1, 2002, as amended by that Key Employee Agreement Amendment dated as of December 24, 2003 (the “Employment Agreement”), pursuant to which Contractor has served as Chairman of the Company’s Board of Directors; and

WHEREAS, Contractor’s current term as a member of the Company’s Board of Directors will end effective as of the Company’s 2008 Annual Meeting of Stockholders, presently expected to occur on or around June 3, 2008, and Contractor has elected not to run for re-election to a new three-year term on the Company’s Board of Directors; and

WHEREAS, given Contractor’s knowledge of the Company’s business and technologies, the Company desires to be able to continue to obtain services from Contractor upon the termination of the Employment Agreement and the end of Contractor’s service on the Company’s Board of Directors, and Contractor is willing to provide such services to the Company, in each case in accordance with the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained in this Agreement, the parties agree as follows:

AGREEMENT

In consideration of the mutual covenants set forth below, the parties hereby agree as follows:

1. ENGAGEMENT OF SERVICES.

1.1 The Company and Contractor hereby agree that effective immediately with the end of Contractor’s current term as a member of the Company Board of Directors (the “Effective Time”), (i) the Employment Agreement shall be terminated and (ii) Contractor, pursuant to the provisions of this Agreement, shall be engaged by the Company to provide consulting services to the Company on an “as requested” basis, including but not limited to consulting relating to the analysis of the Company’s core competitive strengths, the Company’s optimal growth strategies,

and the identification and development of product strategies and collaboration opportunities (the “Services”). It is the intent of the parties that Contractor be engaged as a consultant under this Agreement immediately upon the termination of the Employment Agreement so that there shall not be any interruption of Contractor’s “Continuous Service” to the Company for purposes of the Company’s 1999 Equity Incentive Plan and all outstanding equity awards previously granted to Contractor under such Plan.

1.2 Contractor shall perform Services as requested by the Company from time to time to the best of his ability, such Services to be performed at such place or places and at such times as mutually agreed upon by the Company and Contractor; provided that Contractor shall not be required to provide more than four (4) days of Services per quarter without Contractor’s prior agreement. The Company recognizes that Contractor may be unavailable to perform Services for certain amounts of time due to other commitments.

2. COMPENSATION.

2.1 As consideration for Contractor’s Services and for the discharge of all Contractor’s obligations hereunder, the Company shall pay Contractor for Services requested by the Company pursuant to Section 1, as and when performed by Contractor, at the rate of $300.00 per hour or $2,000 per day, as the case may be. The Company will pay Contractor for Services within thirty (30) days after receipt of Contractor’s invoice for such Services.

2.2 In addition to such compensation, the Company will reimburse Contractor for travel and other out-of-pocket costs reasonably incurred by him in the course of performing Services under this Agreement; provided that the Company shall not be obligated hereunder unless (i) the Company has agreed in advance to reimburse such costs, and (ii) Contractor provides the Company with appropriate receipts or other relevant documentation for all such costs as part of any submission by Contractor for reimbursement.

3. INDEPENDENT CONTRACTOR.

It is understood and agreed that, upon and after the Effective Time, (i) Contractor shall be an independent contractor and not an agent or employee of the Company, (ii) Contractor shall not have any authority to act on behalf of the Company pursuant to this Agreement, or to obligate the Company by contract or otherwise, and (iii) Contractor shall not be eligible for any employee benefits, nor will the Company make deductions from Contractor’s fees for taxes. The payment of any taxes related to Contractor’s provision of Services under this Agreement shall be the sole responsibility of Contractor.

4. ESTABLISHMENT OF CONFIDENTIAL RELATIONSHIP.

Contractor recognizes that the Company is engaged in a continuous program of research and development respecting its present and future business activities. Contractor understands that:

4.1 As part of any Services performed by Contractor for the Company, Contractor will be involved in discussions that relate to the Company’s technology and business strategy,

and, in the course of providing Services to the Company, may develop new ideas or inventions or make other contributions of value to the Company.

4.2 This Agreement creates a relationship of trust and confidence between Contractor and the Company with respect to any information which is:

(i) applicable to the business of the Company or any client or customer of the Company; and

(ii) is made known to Contractor by the Company or by any client or customer of the Company, or is learned by Contractor while performing Services for the Company.

4.3 The Company possesses and will continue to possess information: (i) that has been created, discovered, developed, or otherwise become known to the Company; or (ii) in which property rights have been assigned or otherwise conveyed to the Company by another entity, which information has commercial value in the business in which the Company is engaged and is treated by the Company as confidential. All such information is hereinafter referred to as “Proprietary Information.” By way of illustration, but not limitation, Proprietary Information includes: (1) inventions, developments, designs, applications, improvements, trade secrets, formulae, ideas, know-how, methods or processes, discoveries, techniques and data (hereinafter collectively referred to as “Inventions”); and (2) plans for research, development, new products, marketing and selling, information regarding business plans, budgets and unpublished financial statements, licenses, prices and costs, information concerning suppliers and customers and information regarding the skills and compensation of employees of the Company. Notwithstanding the above, nothing received by Contractor will be considered to be Proprietary Information if: (a) it has been published or is otherwise readily available to the public other than by a breach of this Agreement; (b) it has been rightfully received by Contractor from a third party without confidential limitations; (c) it has been independently developed for Contractor by personnel or agents having no access to the Proprietary Information; or (d) it was known to Contractor prior to its first receipt from the Company.

Certain specific obligations of Contractor arising out of Contractor’s confidential relationship with the Company are set forth in Sections 5 and 6 of this Agreement.

5. RECOGNITION OF COMPANY’S RIGHTS; NONDISCLOSURE.

5.1 All Proprietary Information shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection with such Proprietary Information.

5.2 At all times, both during the term of this Agreement and after its termination, Contractor will keep in confidence and trust all Proprietary Information and shall not use or disclose to any third party any Proprietary Information or anything related to such information without the written consent of the Company, except as may be required in the ordinary course of performing Services for the Company pursuant to this Agreement.

6. NONDISCLOSURE OF THIRD-PARTY INFORMATION.

Contractor understands that the Company has received and in the future will receive from third parties information that is confidential or proprietary (“Third-Party Information”) subject to a duty on the part of the Company to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of this Agreement and thereafter, Contractor will hold Third-Party Information in the strictest confidence and will not disclose or use Third-Party Information except as permitted by the agreement between the Company and such third party, unless expressly authorized to act otherwise by an officer of the Company in writing.

7. NO IMPROPER USE OF MATERIALS.

Contractor agrees not to bring to the Company or to use in the performance of Services any materials or documents obtained by Contractor under a binder of confidentiality imposed by reason of another of Contractor’s contracting relationships, unless such materials or documents are generally available to the public or Contractor has authorization from such client for the possession and unrestricted use of such materials. Contractor understands that Contractor is not to breach any obligation of confidentiality that Contractor has to present or former clients, and agrees to fulfill all such obligations during the term of this Agreement.

8. TERM AND TERMINATION.

8.1 Unless previously terminated as set forth in Section 8.2 below, the term of this Agreement shall commence at the Effective Time and shall terminate twelve (12) months thereafter, unless extended by mutual agreement of both parties hereto, which extension or extensions, if made, shall be for an additional twelve months and which in the aggregate may extend the term of this Agreement to up to five years from the Effective Time.

8.2 Either party may terminate this Agreement in the event of a material breach by the other party of this Agreement, if such breach continues uncured for a period of thirty (30) days after written notice of such breach by the nonbreaching party.

9. EFFECT OF TERMINATION.

9.1 Upon the expiration or termination of this Agreement, each party shall be released from all obligations and liabilities to the other occurring or arising after the date of such termination, except that any termination of this Agreement shall not relieve Contractor of Contractor’s obligations under Sections 5 and 6 hereof, nor shall any such termination relieve Contractor or the Company from any liability arising from any breach of this Agreement.

9.2 Upon termination of this Agreement for any reason whatsoever, Contractor shall promptly surrender and deliver to the Company all documents, notes and other materials of any nature pertaining to Contractor’s work with the Company, and any documents or data of any description (or any reproduction of any documents or data) containing or pertaining to any Proprietary Information.

10. ASSIGNMENT.

The rights and liabilities of the parties hereto shall bind and inure to the benefit of their respective successors, assigns, heirs, executors and administrators, as the case may be; provided that Contractor may not assign or delegate Contractor’s obligations under this Agreement either in whole or in part without the prior written consent of the Company.

11. LEGAL AND EQUITABLE REMEDIES.

Because Contractor’s services are personal and unique and because Contractor may have access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.

12. GOVERNING LAW; SEVERABILITY.

This Agreement shall be governed by the laws of the State of California as those laws are applied to contracts entered into and to be performed entirely in California by California residents. If one or more of the provisions in this Agreement are deemed unenforceable by law, then such provision will be deemed stricken from this Agreement and the remaining provisions will continue in full force and effect.

13. COMPLETE UNDERSTANDING; MODIFICATION.

This Agreement, the Employment Agreement, all stock option agreements between the Company and Contractor, and the Employee Proprietary Information and Inventions Agreement dated February 3, 1999 constitute the final, exclusive and complete understanding and agreement of the parties hereto and supersedes all prior understandings and agreements, and is entered into without reliance upon any representation, whether oral or written, not stated herein. Any waiver, modification or amendment of any provision of this Agreement shall be effective only if in writing and signed by a Company officer.

14. NOTICES.

Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be deemed given upon personal delivery to the appropriate address or sent by certified or registered mail, three days after the date of mailing.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

CALIPER LIFE SCIENCES, INC.			CONTRACTOR


By:	/s/ Stephen Creager		By:	/s/ Daniel L. Kisner, M.D.
	Name: Stephen Creager			Daniel L. Kisner, M.D.
	Title: Senior Vice President &
		General Counsel

EX-10.3 4 a08-11526_1ex10d3.htm EX-10.3

Exhibit 10.3

April 4, 2008

Mr. Thomas C. Higgins

Dear Tom:

This letter sets forth the substance of the separation agreement (the “Agreement”) that Caliper Life Sciences, Inc. (the “Company”) is offering to you to aid in your employment transition.

1. Separation. Your last day of work with the Company and your employment termination date will be April 4, 2008 (the “Separation Date”).

2. Accrued Salary and Paid Time Off. On the Separation Date, the Company will pay you all salary and unused paid time off accrued through the Separation Date, subject to standard payroll deductions and withholdings. You are entitled to these payments by law.

3. Severance Payment. Although the Company does not have any policy or procedure for providing severance benefits, the Company will pay you, as severance, (i) six (6) months of salary continuation based on your base salary in effect as of the Separation Date ($23,746 per month), and (ii) up to an additional three (3) months of salary continuation based on your base salary in effect as of the Separation Date, which shall be payable beyond such initial six (6) month severance period only for so long as you have not obtained new employment, either as an employee, or as a consultant, for at least fifty percent (50%) time (the “Severance Payments”). You hereby agree that you shall notify the Company upon the commencement of any new employment or consultancy. The Severance Payments period shall begin on April 5, 2008, and the Severance Payments shall be made on the Company’s standard payroll dates, and will be subject to standard payroll deductions and withholdings. The Severance Payments and the bonus payment set forth below are contingent upon you allowing the releases set forth herein to become effective.

4. Performance Bonus. As an exception to the Company’s standard policy regarding payment of annual bonuses, Caliper will pay to you (at the time that bonus payments are made to all employees), the annual performance bonus for 2007 that you would have earned and been eligible to receive had you remained employed with the Company on the date of payment (in the amount of $51,263.43), according to the stated terms and conditions of the Company’s Performance Bonus Plan.

5. Stock Options. Pursuant to the terms of your stock option grant agreement and the Company’s applicable stock option plan, vesting of your stock option(s) will cease on the Separation Date, unless you continue to provide consulting or other services to the Company thereafter. Your right to exercise any vested shares and all other rights and obligations with respect to your stock option(s), will be as set forth in your stock option grant agreement and the Company’s stock option plan.

6. Health Insurance. To the extent provided by the federal COBRA law and by the Company’s current group health insurance policies, after the Separation Date, you will be eligible to continue your group health insurance benefits. If you timely elect continued coverage under COBRA and execute and allow the releases set forth herein to become effective, the Company will pay the

April 3, 2008

COBRA premiums necessary to continue your current family health care coverages (family medical, dental and vision care) until the cessation of the Severance Payments in accordance with paragraph 3 above.

7. Outplacement Services. The Company will provide you with executive outplacement assistance of up to $12,500 in value from a company of your choosing and under a contract to be negotiated by the Company, for twelve (12) months from the Separation Date.

8. Other Compensation or Benefits. You acknowledge that, except as expressly provided in this Agreement, you will not receive any additional compensation, severance or benefits after the Separation Date.

9. Expense Reimbursements. You agree that, within ten (10) days of the Separation Date, you will submit your final documented expense reimbursement statement reflecting all business expenses you incurred through the Separation Date, if any, for which you seek reimbursement. The Company will reimburse you for these expenses pursuant to its regular business practice.

10. Return of Company Property. You agree that, by the Separation Date, you will return to the Company all Company documents (and all copies thereof) and other Company property in your possession or control, with the exception of the laptop, blackberry and related accessories that are currently assigned to you, including, but not limited to: Company files, notes, memoranda, correspondence, agreements, draft documents, notebooks, logs, drawings, records, plans, proposals, reports, forecasts, financial information, sales and marketing information, research and development information, personnel information, specifications, computer-recorded information, tangible property and equipment, credit cards, entry cards, identification badges and keys; and any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part). You agree to make a diligent search to ensure that you have returned all such property, wherever it is located. Notwithstanding the foregoing, you may retain certain Company property as required to provide any consulting services requested by the Company.

11. Proprietary Information Obligations. You acknowledge your continuing obligations under your Proprietary Information and Inventions Agreement a copy of which is attached hereto as Exhibit A.

12. Confidentiality. The provisions of this Agreement will be held in strictest confidence by you and the Company and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you may disclose this Agreement to your immediate family; (b) the parties may disclose this Agreement in confidence to their respective attorneys, accountants, auditors, tax preparers, and financial advisors; (c) the Company may disclose this Agreement as necessary to fulfill standard or legally required corporate reporting or disclosure requirements; and (d) the parties may disclose this Agreement insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. By way of example, and without limitation, you agree not to disclose the terms of this Agreement to any current or former Company employee.

13. Nondisparagement. You agree not to disparage the Company and its officers, directors, employees, shareholders and agents, in any manner likely to be harmful to them or their business,

business reputation or personal reputation; provided that you may respond accurately and fully to any question, inquiry or request for information when required by legal process.

14. No Admissions. You understand and agree that the promises and payments in consideration of this Agreement shall not be construed to be an admission of any liability or obligation by the Company to you or to any other person, and that the Company makes no such admission.

15. General Release. In exchange for the consideration under this Agreement to which you would not otherwise be entitled, you hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to your signing this Agreement. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to your employment with the Company or the termination of that employment; (2) all claims related to your compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended).

16. Release of ADEA Claims. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the ADEA and acknowledge that the consideration given for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which you were already entitled. You further acknowledge that you have been advised by this writing, as required by the ADEA, that: (a) your waiver and release do not apply to any rights or claims that may arise after the execution date of this Agreement; (b) you should consult with an attorney prior to executing this Agreement (although you may choose not to do so); (c) you have twenty-one (21) days from the Separation Date to consider this Agreement (although you may voluntarily execute this Agreement earlier); (d) you have seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; and (e) this Agreement shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Agreement is executed by you (the “Effective Date”).

17. Further Release. In granting the release herein, which includes claims which may be unknown to you or unsuspected by you at present, you hereby expressly waive and relinquish all rights and benefits under any law or legal principle in any jurisdiction with respect to the releases granted herein, including but not limited to the release of unknown and unsuspected claims granted in this Agreement.

18. Miscellaneous. This Agreement, including Exhibit A, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to this

subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified by the court so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the Commonwealth of Massachusetts as applied to contracts made and to be performed entirely within the Commonwealth of Massachusetts.

If this Agreement is acceptable to you, please sign below and return the original to me.

I wish you good luck in your future endeavors.

Sincerely,

CALIPER LIFE SCIENCES, INC.


By:	/s/ Paula J. Cassidy

Exhibit A - Proprietary Information and Inventions Agreement

AGREED:


/s/ Thomas C. Higgins
Thomas C. Higgins

EXHIBIT A

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

EX-10.4 5 a08-11526_1ex10d4.htm EX-10.4

Exhibit 10.4

INDEPENDENT CONTRACTOR SERVICES AGREEMENT

THIS AGREEMENT is between CALIPER LIFE SCIENCES, INC., a Delaware corporation, and its successors or assignees (“Client”) and the undersigned individual or entity (the “Contractor”), and shall be effective as of April 5, 2008 (the “Effective Date”).

1. ENGAGEMENT OF SERVICES. Client may from time to time issue Project Assignment(s) in the form attached to this Agreement as Exhibit A. Subject to the terms of this Agreement, Contractor will, to the best of its ability, render the services set forth in Project Assignment(s) accepted by Contractor (the “Project(s)”) by the completion dates set forth therein. The manner and means by which Contractor chooses to complete the Projects are in Contractor’s sole discretion and control. Contractor agrees to exercise the highest degree of professionalism, and to utilize its expertise and creative talents in completing such Projects. In completing the Projects, Contractor shall have access to Client tools and equipment as mutually agreed. Client may make its facilities and equipment available to Contractor when necessary. Contractor shall perform the services necessary to complete the Projects in a timely and professional manner consistent with industry standards, and at a location, place and time that the Contractor deems appropriate. Contractor may not subcontract or otherwise delegate its obligations under this Agreement without Client’s prior written consent. If Contractor is not a natural person, then before any Contractor employee or consultant performs services in connection with this Agreement, the employee or consultant and Contractor must have entered into a written agreement expressly for the benefit of Client and containing provisions substantially equivalent to this Section 1 and to Section 4 below.

2. COMPENSATION. Client will pay Contractor a fee for services rendered under this Agreement as set forth in the Project Assignment(s) undertaken by Contractor. Such payments shall be subject to standard payroll deductions and withholdings. Upon termination of this Agreement for any reason, Contractor will be paid fees and expenses on a proportional basis as stated in the Project Assignment(s) for work which is then in progress, up to and including the effective date of such termination. Unless other terms are set forth in the Project Assignment(s) for work which is in progress, Client will pay the Contractor for services and will reimburse the Contractor for previously approved expenses within thirty (30) days of the date of Contractor’s invoice.

3. INDEPENDENT CONTRACTOR RELATIONSHIP. Contractor’s relationship with Client will be that of an independent contractor and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Contractor is not the agent of Client and is not authorized to make any representation, contract, or commitment on behalf of Client. Contractor will not be entitled to any of the benefits that Client may make available to its employees, such as group insurance, profit sharing or retirement benefits. Contractor is free to enter any contract to provide services to other business entities, except any contract that would induce Contractor to violate this Agreement.

4. TRADE SECRETS - INTELLECTUAL PROPERTY RIGHTS.

4.1 Proprietary Information. Contractor agrees during the term of this Agreement and thereafter that it will take all steps reasonably necessary to hold Client’s Proprietary Information in trust and confidence, will not use Proprietary Information in any manner or for any purpose not expressly set forth in this Agreement, and will not disclose any such Proprietary Information to any third party without first obtaining Client’s express written consent on a case-by-case basis. By way of illustration but not limitation “Proprietary Information” includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (c) information regarding the skills and compensation of other employees of Client. Notwithstanding the other provisions of this Agreement, nothing received by Contractor will be considered to be Client Proprietary Information if (1) it has been published or is otherwise readily available to the public other than by a breach of this Agreement; (2) it has been rightfully received by Contractor from a third party without confidential limitations; (3) it has been independently developed for Contractor by personnel or agents having no access to the Client Proprietary Information; or (4) it was known to Contractor prior to its first receipt from Client.

4.2 Third Party Information. Contractor understands that Client may receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on Client’s part to maintain the confidentiality of such information and use it only for certain limited purposes. Contractor agrees to hold Third Party Information in confidence and not to disclose to anyone (other than Contractor personnel who need to know such information in connection with their work for Client) or to use, except in connection with Contractor’s work for Client, Third Party Information unless expressly authorized in writing by an officer of Client.

4.3 No Conflict of Interest. Contractor agrees during the term of this Agreement not to accept work or enter into a contract or accept an obligation, inconsistent or incompatible with Contractor’s obligations under this Agreement or the scope of services rendered for Client. During the first six (6) months after the Effective Date, or such longer period as the Company is paying Contractor on at least a half-time basis as set forth in Appendix A, Contractor shall not engage in any employment or business activity that is competitive with, or would conflict with, any business activity in which Client is engaged. Contractor further agrees not to disclose to Client, or bring onto Client’s premises, or induce Client to use any confidential information that belongs to anyone other than Client or Contractor.

4.4 Disclosure of Work Product. As used in this Agreement, the term “Work Product” means any Invention, whether or not patentable, and all related know-how, designs, mask works, trademarks, formulae, processes, manufacturing techniques, trade secrets, ideas, artwork, software or other copyrightable or patentable works. Contractor agrees to disclose promptly in writing to Client, or any person designated by Client, all Work Product that is solely or jointly conceived, made, reduced to practice, or learned by Contractor in the course of any work performed for Client (“Client Work Product”). Contractor agrees that any and all Client Work Product shall be the sole and exclusive property of Client.

4.5 Assignment of Client Work Product. Contractor irrevocably assigns to Client all right, title and interest worldwide in and to the Client Work Product and all applicable intellectual property rights related to the Client Work Product, including without limitation, copyrights, trademarks, trade secrets, patents, moral rights, contract and licensing rights (the “Proprietary Rights”). Except as set forth below, Contractor retains no rights to use the Client Work Product and agrees not to challenge the validity of Client’s ownership in the Client Work Product

4.6 Waiver or Assignment of Other Rights. If Contractor has any rights to the Client Work Product that cannot be assigned to Client, Contractor unconditionally and irrevocably waives the enforcement of such rights, and all claims and causes of action of any kind against Client with respect to such rights, and agrees, at Client’s request and expense, to consent to and join in any action to enforce such rights. If Contractor has any right to the Client Work Product that cannot be assigned to Client or waived by Contractor, Contractor unconditionally and irrevocably grants to Client during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, fully paid and royalty-free license, with rights to sublicense through multiple levels of sublicensees, to reproduce, create derivative works of, distribute, publicly perform and publicly display by all means now known or later developed, such rights.

4.7 Assistance. Contractor agrees to cooperate with Client or its designee(s), both during and after the term of this Agreement, in the procurement and maintenance of Client’s rights in Client Work Product and to execute, when requested, any other documents deemed necessary by Client to carry out the purpose of this Agreement.

4.8 Enforcement of Proprietary Rights. Contractor will assist Client in every proper way to obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to Client Work Product in any and all countries. To that end Contractor will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as Client may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, Contractor will execute, verify and deliver assignments of such Proprietary Rights to Client or its designee. Contractor’s obligation to assist Client with respect to Proprietary Rights relating to such Client Work Product in any and all countries shall continue beyond the termination of this Agreement, but Client shall compensate Contractor at a reasonable rate after such termination for the time actually spent by Contractor at Client’s request on such assistance.

4.9 Execution of Documents. In the event Client is unable for any reason, after reasonable effort, to secure Contractor’s signature on any document needed in connection with the actions specified in the preceding Sections 4.7 and 4.8, Contractor hereby irrevocably designates and appoints Client and its duly authorized officers and agents as its agent and attorney in fact, which appointment is coupled with an interest, to act for and in its behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph

with the same legal force and effect as if executed by Contractor. Contractor hereby waives and quitclaims to Client any and all claims, of any nature whatsoever, which Contractor now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to Client.

5. TERMINATION.

5.1 Termination by Client. Client may terminate this Agreement upon (i) breach of this Agreement by Contractor, including Contractor’s refusal to perform services hereunder as requested by Caliper, or (ii) Contractor engaging in any employment or business activity that is competitive with, or would conflict with, any business activity in which Client is engaged, in each case upon fifteen (15) days’ prior written notice to Contractor.

5.2 Termination by Contractor. Contractor may terminate this Agreement at any time upon fifteen (15) days’ prior written notice to Client.

5.3 Noninterference with Business. During and for a period of two (2) years immediately following termination of this Agreement by either party, Contractor agrees not to solicit or induce any employee or independent contractor to terminate or breach an employment, contractual or other relationship with Client.

5.4 Return of Client Property. Upon termination of the Agreement or earlier as requested by Client, Contractor will deliver to Client any and all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Client Work Product, Third Party Information or Proprietary Information of Client. Contractor further agrees that any property situated on Client’s premises and owned by Client, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Client personnel at any time with or without notice.

6. GOVERNMENT OR THIRD PARTY CONTRACTS.

6.1 Government Contracts. In the event that Contractor shall perform services under this Agreement in connection with any Government contract in which Client may be the prime contractor or subcontractor, Contractor agrees to abide by all laws, rules and regulations relating thereto. To the extent that any such law, rule or regulation requires that a provision or clause be included in this Agreement, Contractor agrees that such provision or clause shall be added to this Agreement and the same shall then become a part of this Agreement.

6.2 Security. In the event the services of the Contractor should require Contractor to have access to Department of Defense classified material, or other classified material in the possession of Client’s facility, such material shall not be removed from Client’s facility. Contractor agrees that all work performed under this Agreement by Contractor which involves the use of classified material mentioned above shall be performed in a secure fashion (consistent with applicable law and regulations for the handling of classified material) and only at Client’s facility.

6.3 Ownership. Contractor also agrees to assign all of its right, title and interest in and to any Work Product to a Third Party, including without limitation the United States, as directed by Client.

7. GENERAL PROVISIONS.

7.1 Governing Law. This Agreement will be governed and construed in accordance with the laws of the Commonwealth of Massachusetts as applied to transactions taking place wholly within Commonwealth of Massachusetts.

7.2 Severability. In case 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 the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

7.3 No Assignment. This Agreement may not be assigned by Contractor without Client’s consent, and any such attempted assignment shall be void and of no effect.

7.4 Notices. All notices, requests and other communications under this Agreement must be in writing, and must be mailed by registered or certified mail, postage prepaid and return receipt requested, or delivered by hand to the party to whom such notice is required or permitted to be given. If mailed, any such notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark. If delivered by hand, any such notice will be

considered to have been given when received by the party to whom notice is given, as evidenced by written and dated receipt of the receiving party. The mailing address for notice to either party will be the address shown on the signature page of this Agreement. Either party may change its mailing address by notice as provided by this section.

7.5 Legal Fees. If any dispute arises between the parties with respect to the matters covered by this Agreement which leads to a proceeding to resolve such dispute, the prevailing party in such proceeding shall be entitled to receive its reasonable attorneys’ fees, expert witness fees and out-of-pocket costs incurred in connection with such proceeding, in addition to any other relief it may be awarded.

7.6 Injunctive Relief. A breach of any of the promises or agreements contained in this Agreement may result in irreparable and continuing damage to Client for which there may be no adequate remedy at law, and Client is therefore entitled to seek injunctive relief as well as such other and further relief as may be appropriate.

7.7 Survival. The following provisions shall survive termination of this Agreement: Section 4, Section 5, Section 6 and Section 7.3.

7.8 Export. Contractor agrees not to export, directly or indirectly, any U.S. source technical data acquired from Client or any products utilizing such data to countries outside the United States, which export may be in violation of the United States export laws or regulations.

7.9 Waiver. No waiver by Client of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by Client of any right under this Agreement shall be construed as a waiver of any other right. Client shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

9.10 Entire Agreement. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the party to be charged. The terms of this Agreement will govern all Project Assignments and services undertaken by Contractor for Client. In the event of any conflict between this Agreement and a Project Assignment, the Project Assignment shall control, but only with respect to the services set forth herein.

IN WITNESS WHEREOF, the parties have caused this Independent Contractor Services Agreement to be executed by their duly authorized representative.

CALIPER LIFE SCIENCES, INC.:		CONTRACTOR:

/s/ Paula J. Cassidy		/s/ Thomas C. Higgins

EXHIBIT A

PROJECT ASSIGNMENT

Services to be Provided		Completion Date
Consulting services as requested by Kevin Hrusovsky or his designee.		October 4, 2008

A. Fees for services under this Agreement will be:

Contractor shall provide consulting services as requested by Client at a rate per hour of $200.

B. Expenses:

Contractor will be reimbursed for any reasonable expenses incurred in connection with the performance of services under this Agreement provided Contractor submits verification of such expenses as Client may require.

C. Termination:

If this Project Assignment or the Independent Contractor Services Agreement which governs it is terminated for any reason, fees will be paid based on contractor time spent

D. Term of Agreement:

The term of this Agreement begins on the Effective Date, and ends on October 4, 2008.

C-1

EX-31.1 6 a08-11526_1ex31d1.htm EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, E. Kevin Hrusovsky, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Caliper Life Sciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2008


/s/ E. KEVIN HRUSOVSKY

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

EX-31.2 7 a08-11526_1ex31d2.htm EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Peter F. McAree, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Caliper Life Sciences, Inc.;

(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: May 9, 2008


/s/ PETER F. MCAREE

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

EX-32.1 8 a08-11526_1ex32d1.htm EX-32.1

EXHIBIT 32.1

CALIPER LIFE SCIENCES, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Caliper Life Sciences, Inc. (the “Company”) on Form 10-Q for the quarter ended March 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.

	/s/ E. KEVIN HRUSOVSKY

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


Date: May 9, 2008

EX-32.2 9 a08-11526_1ex32d2.htm EX-32.2

EXHIBIT 32.2

CALIPER LIFE SCIENCES, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Caliper Life Sciences, Inc. (the “Company”) on Form 10-Q for the quarter ended March 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.

	/s/ PETER F. MCAREE

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


Date: May 9, 2008

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