**EXHIBIT 10.1**

 

**SECOND AMENDED AND RESTATED LOANAND SECURITY AGREEMENT**

 

**THIS SECOND AMENDED AND RESTATED LOAN AND SECURITYAGREEMENT** (this “**Agreement**”)dated as of March 6, 2009 (the “**Effective Date**”)by and among (a) **SILICON VALLEY BANK**,a California corporation, with its principal place of business at3003 Tasman Drive, Santa Clara, California 95054 and with a loanproduction office located at One Newton Executive Park, Suite 200, 2221Washington Street, Newton, Massachusetts 02462 (“**Bank**”),and (b) **CALIPER LIFE SCIENCES, INC.**, aDelaware corporation with a principal place of business located at 68 ElmStreet, Hopkinton, Massachusetts 01748 (“**Caliper**”), **NOVASCREEN BIOSCIENCES CORPORATION**, a Maryland corporation (“**NovaScreen**”), **XENOGEN CORPORATION**,a Delaware corporation (“**Xenogen**”), **XENOGEN BIOSCIENCES CORPORATION**, an Ohio corporation (“**Xenogen Biosciences**”) and **CALIPER LIFESCIENCES LTD.**, a company organized under the laws of Canada (“**Caliper****Ltd.**”)(hereinafter, Caliper, NovaScreen, Xenogen, Xenogen Biosciences and CaliperLtd. are jointly and severally, individually and collectively, referred to as “**Borrower**”), amends and restates a certain Amended andRestated Loan and Security Agreement by and among Borrower and Bank dated as ofFebruary 15, 2008, as amended, and provides the terms on which Bank shalllend to Borrower and Borrower shall repay Bank. The parties agree as follows:

 

**1****                                        ****ACCOUNTING AND OTHER TERMS**

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

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## **1.2****                               AgentedLoan Arrangement**.

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(a)                                  Designationof Agent.  Each Borrowerhereby designates Caliper as the agent (the “**Agent**”)of each Borrower to discharge the duties and responsibilities of the Agent asprovided herein.

 

(b)                                 Operationof Loan Arrangement.

 

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

 

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

 

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

 

(c)                                  CreditExtensionsDirectly to Borrower.

 

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

 

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

 

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(B)                                Bank deems it inexpedient (in Bank’s soleand absolute discretion) to continue making Credit Extensions to or for theaccount of any particular Borrower, or to channel such Credit Extensionsthrough the Agent, then Bank may make Credit Extensions directly to suchBorrower as Bank determines to be expedient, which Credit Extensions may bemade without regard to the procedures otherwise included in this Article 1.

 

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

 

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

 

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

 

(i)                                     written notice of: (i) thetermination of such authority, and (ii) the subsequent appointment of asuccessor Agent, which notice is executed by the respective Presidents of eachBorrower then eligible for borrowing under this Agreement; and

 

(ii)                                  written notice from the successor Agent (i) acceptingsuch appointment; (ii) acknowledging that the removal and appointment hasbeen effected by the respective Presidents of each Borrower eligible forborrowing under the within Agreement; and (iii) acknowledging that fromand after the date of appointment, the newly appointed Agent shall be bound bythe terms hereof, and that as used herein, the term “Agent” shall mean andinclude the newly appointed Agent.

 

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

 

**2****                                        ****LOAN AND TERMS OF PAYMENT**

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## **2.1****                               Promiseto Pay**.  Borrower herebyunconditionally, jointly and severally, promises to pay Bank the outstandingprincipal amount of all Credit Extensions and accrued and unpaid interestthereon as and when due in accordance with this Agreement.

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### **2.1.1****                     RevolvingAdvances**.

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#### (a)                                  Availability.  Subject to the terms and conditions of thisAgreement and to deduction of Reserves, Bank shall make Advances to Borrower upto the Availability Amount.  Amounts borrowed under the Revolving Line maybe repaid, and prior to the Revolving Line Maturity Date, reborrowed, subjectto the applicable terms and conditions precedent herein.

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#### (b)                                 Termination;Repayment.  The Revolving Lineterminates on the Revolving Line Maturity Date, when the principal amount ofall Advances, the unpaid interest thereon, and all other Obligations relatingto the Revolving Line shall be immediately due and payable.

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### **2.1.2****                     Letters ofCredit Sublimit**.

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#### (a)                                  Aspart of the Revolving Line and subject to deduction of Reserves, Bank shallissue or have issued Letters of Credit for Borrower’s account.  The face amount of outstanding Letters ofCredit (including 

 

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#### drawn but unreimbursedLetters of Credit and any Letter of Credit Reserve) may not exceed Five MillionDollars ($5,000,000) inclusive of Credit Extensions relating to Sections 2.1.3and 2.1.4.  Such aggregate amountsutilized hereunder shall at all times reduce the amount otherwise available forAdvances under the Revolving Line.  If,on the Revolving Line Maturity Date or after the occurrence and during thecontinuance of an Event of Default****there are anyoutstanding Letters of Credit, then on such date Borrower shall provide to Bankcash collateral in an amount equal to 105% of the face amount of all suchLetters of Credit plus all interest, fees, and costs due or to become due inconnection therewith (as estimated by Bank in its good faith businessjudgment), to secure all of the Obligations relating to said Letters ofCredit.  All Letters of Credit shall bein form and substance acceptable to Bank in its sole discretion and shall besubject to the terms and conditions of Bank’s standard Application and Letterof Credit Agreement (the “**Letter of CreditApplication**”).  Borroweragrees to execute any further documentation in connection with the Letters ofCredit as Bank may reasonably request.  Borrower further agrees to be bound by the regulationsand interpretations of the issuer of any Letters of Credit guarantied by Bankand opened for Borrower’s account or by Bank’s interpretations of any Letter ofCredit issued by Bank for Borrower’s account, and Borrower understands andagrees that Bank shall not be liable for any error, negligence, or mistake,whether of omission or commission, in following Borrower’s instructions orthose contained in the Letters of Credit or any modifications, amendments, orsupplements thereto.

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#### (b)                                 Theobligation of Borrower to immediately reimburse Bank for drawings made underLetters of Credit shall be absolute, unconditional, and irrevocable, and shallbe performed strictly in accordance with the terms of this Agreement, suchLetters of Credit, and the Letter of Credit Application.  Any amounts Bank pays on behalf of Borrowerfor any Letters of Credit will be treated as Advances under the Revolving Lineand will accrue interest at the interest rate applicable to Advances.

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#### (c)                                  Borrowermay request that Bank issue a Letter of Credit payable in a ForeignCurrency.  If a demand for payment ismade under any such Letter of Credit, Bank shall treat such demand as anAdvance to Borrower of the equivalent of the amount thereof (plus fees andcharges in connection therewith such as wire, cable, SWIFT or similar charges)in Dollars at the then-prevailing rate of exchange in San Francisco,California, for sales of the Foreign Currency for transfer to the countryissuing such Foreign Currency.

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

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### **2.1.3****                     ForeignExchange Sublimit**.  As part of theRevolving Line and subject to the deduction of Reserves, Borrower may enterinto foreign exchange contracts with Bank under which Borrower commits topurchase from or sell to Bank a specific amount of Foreign Currency (each, a “**FX Forward Contract**”) on a specified date (the “**Settlement Date**”).  FXForward Contracts shall have a Settlement Date of at least one (1) FXBusiness Day after the contract date and shall be subject to a reserve of tenpercent (10%) of each outstanding FX Forward Contract in a maximum aggregateamount equal to Five Hundred Thousand Dollars ($500,000) (the “**FX Reserve**”).  Theaggregate amount of FX Forward Contracts at any one time plus Credit Extensionsmade pursuant to Sections 2.1.2 and 2.1.4 may not exceed ten (10) timesthe maximum aggregate amount of the FX Reserve. Any amounts needed to fully reimburse Bank will be treated as Advancesunder the Revolving Line and will accrue interest at the interest rateapplicable to Advances.

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### **2.1.4****                     CashManagement Services Sublimit**. Borrower may use up to Five Million Dollars ($5,000,000) inclusive ofCredit Extensions relating to Sections 2.1.2 and 2.1.3 (the “**Cash Management Services Sublimit**”) of the Revolving Linefor Bank’s cash management services which may include merchant services, directdeposit of payroll, business credit card, and check cashing services identifiedin Bank’s various cash management services agreements (collectively, the “**Cash Management Services**”). The dollar amount of any Cash Management Services provided under thissublimit will reduce the amount otherwise available under the RevolvingLine.  Any amounts used or reserved byBorrower for any Cash Management Services will reduce the amount otherwiseavailable for Credit Extensions under the Revolving Line.  Any amounts Bank pays on behalf of Borrowerfor any Cash Management Services will be treated as Advances under theRevolving Line and will accrue interest at the interest rate applicable toAdvances.

 

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## **2.2****                               Overadvances**. If, at any time the sum of (a) the outstanding amount of anyAdvances (including any amounts used for Cash Management Services) plus (b) theface amount of any outstanding Letters of Credit (including drawn butunreimbursed Letters of Credit and any Letter of Credit Reserve), plus (c) theFX Reserve exceeds the lesser of either the Revolving Line or the BorrowingBase (such excess amount being an “**Overadvance**”),Borrower shall immediately pay to Bank in cash such Overadvance.  Without limiting Borrower’s obligation torepay Bank any amount of the Overadvance, Borrower agrees to pay Bank intereston the outstanding amount of any Overadvance, on demand, at the Default Rate.

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## **2.3****                               Paymentof Interest on the Credit Extensions**.

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#### (a)                                  InterestRate; Advances.  Subject to Section 2.3(b),the principal amount outstanding under the Revolving Line shall accrue interestat a floating per annum rate equal to: (x) if Borrower’s unrestricted cashis equal to or greater than Twenty Million Dollars ($20,000,000.00), onepercentage point (1.00%) above the Prime Rate, or (y) if Borrower’sunrestricted cash is less than Twenty Million Dollars ($20,000,000.00), twopercentage points (2.00%) above the Prime Rate, which interest shall be payablemonthly in accordance with Section 2.3(f) below.  Any changes to the applicable interest ratedue as set forth in (x) or (y) above, shall be effective on the firstday of the month following such event**.**

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#### (b)                                 DefaultRate. Immediately upon the occurrence and during the continuance of anEvent of Default, Obligations shall bear interest at a rate per annum which istwo percentage points (2.00%) above the rate effective immediately before theoccurrence of the Event of Default (the “**Default Rate**”).  Payment or acceptance of the increasedinterest rate provided in this Section 2.3(b) is not a permittedalternative to timely payment and shall not constitute a waiver of any Event ofDefault or otherwise prejudice or limit any rights or remedies of Bank.

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#### (c)                                  Adjustmentto Interest Rate.  Changes to theinterest rate of any Credit Extension based on changes to the Prime Rate shallbe effective on the effective date of any change to the Prime Rate and to theextent of any such change.

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#### (d)                                 360-DayYear.  Interest shall be computed onthe basis of a 360-day year for the actual number of days elapsed.

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#### (e)                                  Debitof Accounts.  Bank may debit any ofBorrower’s deposit accounts, including the Designated Deposit Account, forprincipal and interest payments or any other amounts Borrower owes Bank whendue.  These debits shall not constitute aset-off.

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#### (f)                                    Payment;Interest Computation; Float Charge. Interest is payable monthly on the last calendar day of each month.  In computing interest on the Obligations, allPayments received after 12:00 p.m. Eastern time on any day shall be deemedreceived on the next Business Day.  Inaddition, Bank shall be entitled to charge Borrower a “float” charge in anamount equal to two (2) Business Days interest, at the interest rateapplicable to the Advances, on all Payments received by Bank.  The float charge for each month shall bepayable on the last day of the month.  Bank shall not, however, be required tocredit Borrower’s account for the amount of any item of payment which isunsatisfactory to Bank in its good faith business judgment, and Bank may chargeBorrower’s Designated Deposit Account for the amount of any item of paymentwhich is returned to Bank unpaid.

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## **2.4****                               Fees**.  Borrower shall pay to Bank:

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#### (a)                                  CommitmentFee.  (i) a fully earned,non-refundable commitment fee of Fifty Two Thousand Fifty Four  and 79/100 Dollars ($52,054.79), payable onthe Effective Date; and (ii) a fully earned, non-refundable anniversaryfee of One Hundred Twenty Five Thousand Dollars ($125,000), payable on theearliest to occur of (x) December 1, 2009; (y) the terminationof this Agreement; and (z) the occurrence of an Event of Default.

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#### (b)                                 Letterof Credit Fee.  Bank’s customary feesand expenses for the issuance or renewal of Letters of Credit**,** upon the issuance, each anniversary of the issuance, andthe****renewal of such Letter of Credit byBank;

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#### (c)                                  TerminationFee.  Subject to the terms of Section 12.1,a termination fee, if and when due in accordance with Section 12.1;

 

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#### (d)                                 UnusedRevolving Line Facility Fee.  A fee(the “**Unused Revolving Line Facility Fee**”),which fee shall be paid monthly, in arrears, on the last day of each month, inan amount equal to one-half of one percent (0.50%) per annum of the averageunused portion of the Revolving Line, as determined by Bank.  The unused portion of the Revolving Line, forthe purposes of this calculation, shall include amounts reserved under the CashManagement Services Sublimit for products provided and under the ForeignExchange Sublimit for FX Forward Contracts (as described in Section 2.1.3).** **Borrower shall notbe entitled to any credit, rebate or repayment of any Unused Revolving LineFacility Fee previously earned by Bank pursuant to this Section notwithstandingany termination of the within Agreement, or suspension or termination of Bank’sobligation to make loans and advances hereunder; and

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#### (e)                                  BankExpenses.  All Bank Expenses(including reasonable attorneys’ fees and reasonable expenses for documentationand negotiation of this Agreement) incurred through and after the EffectiveDate, when due.

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## **2.5****                               Withholding. **Payments received by Bank from Borrowerhereunder will be made free and clear of any withholding taxes.  Specifically, however, if at any time anygovernmental authority, applicable law, regulation or international agreementrequires Borrower to make any such withholding or deduction from any such  payment or other sum payment hereunder toBank, Borrower hereby covenants and agrees that the amount due from Borrowerwith respect to such payment or other sum payable hereunder will be increasedto the extent necessary to ensure that, after the making of such requiredwithholding or deduction, Bank receives a net sum equal to the sum which itwould have received had no withholding or deduction been required and Borrowershall pay the full amount withheld or deducted to the relevant governmentalauthority.  Borrower will, upon request,furnish Bank with proof satisfactory to Bank indicating that Borrower has madesuch withholding payment provided, however, that Borrower need not make anywithholding payment if the amount or validity of such withholding payment iscontested in good faith by appropriate and timely proceedings and as to whichpayment in full is bonded or reserved against by Borrower.  The agreements and obligations of Borrowercontained in this Section 2.5 shall survive the termination of thisAgreement.

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**3****                                        ****CONDITIONS OF LOANS**

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## **3.1****                               ConditionsPrecedent to Initial Credit Extension**. Bank’s obligation to make the initial Credit Extension hereunder issubject to the condition precedent that Bank shall have received, in form andsubstance satisfactory to Bank, such documents, and completion of such othermatters, as Bank may reasonably deem necessary or appropriate, including,without limitation:

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#### (a)                                  Borrowershall have delivered duly executed original signatures to the Loan Documents towhich it is a party;

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#### (b)                                 Borrowershall have delivered duly executed original signatures to the ControlAgreements;

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#### (c)                                  EachBorrower shall have delivered its Operating Documents and a good standingcertificate of such Borrower certified by the Secretary of State (orequivalent) of the applicable state or jurisdiction of incorporation or organizationof such Borrower, dated as of a date no earlier than thirty (30) days prior tothe Effective Date;

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#### (d)                                 Borrowershall have delivered duly executed original signatures to the completedBorrowing Resolutions for each Borrower;

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#### (e)                                  Borrowershall have delivered a Subordination Agreement duly executed by any holder ofSubordinated Debt, if any, as required by Bank, in favor of Bank;

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#### (f)                                    Bankshall have received certified copies, dated as of a recent date, of financingstatement searches, as Bank shall request, accompanied by written evidence(including any UCC termination statements) that the Liens indicated in any suchfinancing statements either constitute Permitted Liens or have been or, inconnection with the initial Credit Extension, will be terminated or released;

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#### (g)                                 Borrowershall have delivered the Perfection Certificate(s) executed by eachBorrower;

 

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#### (h)                                 Borrowershall have delivered a landlord’s consent executed by each landlord of Borroweras required by Bank, in favor of Bank;

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#### (i)                                     Borrowershall have delivered a bailee’s/warehouseman’s waiver executed by each bailee,if any, of Borrower as required by Bank, in favor of Bank;

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#### (j)                                     Borrowershall have delivered a legal opinion of Borrower’s counsel as to authority andenforceability, dated as of the Effective Date together with the duly executedoriginal signatures thereto;

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#### (k)                                  Borrowershall have delivered evidence satisfactory to Bank that the insurance policiesrequired by Section 6.7 hereof are in full force and effect, together withappropriate evidence showing loss payable and/or additional insured clauses orendorsements in favor of Bank; and

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#### (l)                                     Borrowershall have paid the fees and Bank Expenses then due as specified in Section 2.4hereof.

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## **3.2****                               ConditionsPrecedent to all Credit Extensions**. Bank’s obligations to make each Credit Extension, including the initialCredit Extension, is subject to the following:

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#### (a)                                  timelyreceipt of an executed Transaction Report;

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#### (b)                                 therepresentations and warranties in Section 5 shall be true, accurate andcomplete in all material respects on the date of the Transaction Report and onthe Funding Date of each Credit Extension; provided, however,that such materiality qualifier shall not be applicable to any representationsand warranties that already are qualified or modified by materiality in thetext thereof; and provided, further that those representationsand warranties expressly referring to a specific date shall be true, accurateand complete in all material respects as of such date, and no Default or Eventof Default shall have occurred and be continuing or result from the CreditExtension.  Each Credit Extension isBorrower’s representation and warranty on that date that the representationsand warranties in Section 5 remain true, accurate and complete in allmaterial respects; provided, however, that such materialityqualifier shall not be applicable to any representations and warranties thatalready are qualified or modified by materiality in the text thereof; andprovided, further that those representations and warranties expressly referringto a specific date shall be true, accurate and complete in all materialrespects as of such date; and

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#### (c)                                  Bankdetermines in good faith, based upon information available to it and in itsreasonable judgment, that there has not been any material impairment in thegeneral affairs, management, results of operation, financial condition or theprospect of repayment of the Obligations, or any material adverse deviation byBorrower from the most recent business plan of Borrower presented to andaccepted by Bank.

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## **3.3****                               Covenantto Deliver**.

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

 

## **3.4****                               Proceduresfor Borrowing**.  Subject to the priorsatisfaction of all other applicable conditions to the making of an Advance setforth in this Agreement, to obtain an Advance (other than Advances under Sections2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable)by electronic mail, facsimile, or telephone by 12:00 p.m. Eastern time onthe Funding Date of the Advance. Together with such notification, Borrower must promptly deliver to Bankby electronic mail or facsimile a completed Transaction Report executed by aResponsible Officer or his or her designee. Bank shall credit Advances to the Designated Deposit Account.  Bank may make Advances under this Agreementbased on instructions from a Responsible Officer or his or her designee orwithout instructions if the Advances are necessary to meet Obligations whichhave become due.  Bank may rely on anytelephone notice given by a person whom Bank believes is a Responsible Officeror designee.

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**4****                                        ****CREATION OF SECURITYINTEREST**

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## **4.1****                               Grantof Security Interest**.  Borrowerhereby grants Bank, to secure the payment and performance in full of all of theObligations, a continuing security interest in, and pledges to Bank, theCollateral, 

 

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## wherever located, whether now owned or hereafteracquired or arising, and all proceeds and products thereof.  Borrower represents, warrants, and covenantsthat the security interest granted herein is and shall at all times continue tobe a first priority perfected security interest in the Collateral (subject onlyto Permitted Liens that may have superior priority to Bank’s Lien under thisAgreement).  If Borrower shall acquire acommercial tort claim, Borrower shall promptly notify Bank in a writing signedby Borrower of the general details thereof and grant to Bank in such writing asecurity interest therein and in the proceeds thereof, all upon the terms ofthis Agreement, with such writing to be in form and substance reasonablysatisfactory to Bank.

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

 

## **4.2****                               Authorizationto File Financing Statements**. Borrower hereby authorizes Bank to file financing statements, withoutnotice to Borrower, with all appropriate jurisdictions to perfect or protectBank’s interest or rights hereunder, including a notice that any disposition ofthe Collateral, by either Borrower or any other Person, shall be deemed toviolate the rights of Bank under the Code. Without limiting the foregoing, Borrower hereby authorizes Bank to filefinancing statements which describe the collateral as “all assets” and/or “allpersonal property” of Borrower or words of similar import.

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**5****                                        ****REPRESENTATIONS ANDWARRANTIES**

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Borrowerrepresents and warrants as follows at all times unless expressly providedbelow:

 

## **5.1****                               Due Organization; Authorization;**Power and Authority.  Borrower and each of its Subsidiaries areduly existing and in good standing as Registered Organizations in theirrespective jurisdictions of formation and are qualified and licensed to dobusiness and are in good standing in any jurisdiction in which the conduct oftheir business or their ownership of property requires that they be qualifiedexcept where the failure to do so could not reasonably be expected to have amaterial adverse effect on Borrower’s business. In connection with this Agreement, Borrower has delivered to Bank acompleted certificate substantially in the form provided by Bank to Borrower,entitled “Perfection Certificate”. Borrower represents and warrants to Bank that (a) Borrower’s exactlegal name is that indicated on the Perfection Certificate and on the signaturepage hereof; (b) Borrower is an organization of the type and isorganized in the jurisdiction set forth in the Perfection Certificate; (c) thePerfection Certificate accurately sets forth Borrower’s organizationalidentification number or accurately states that Borrower has none; (d) thePerfection Certificate accurately sets forth Borrower’s place of business, or,if more than one, its chief executive office as well as Borrower’s mailingaddress (if different than its chief executive office); (e) Borrower (andeach of its predecessors) has not, in the past five (5) years, changed itsjurisdiction of formation, organizational structure or type, or anyorganizational number assigned by its jurisdiction; and (f) all otherinformation set forth on the Perfection Certificate pertaining to Borrower andeach of its Subsidiaries is accurate and complete in all materialrespects.  If Borrower is not now aRegistered Organization but later becomes one, Borrower shall promptly notifyBank of such occurrence and provide Bank with Borrower’s organizationalidentification number.

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The execution, deliveryand performance by Borrower of the Loan Documents to which it is a party havebeen duly authorized, and do not (i) conflict with any of Borrower’sorganizational documents, (ii) contravene, conflict with, constitute adefault under or violate any material Requirement of Law, (iii) contravene,conflict or violate any applicable order, writ, judgment, injunction, decree,determination or award of any Governmental Authority by which Borrower or anyof its Subsidiaries or any of their property or assets may be bound oraffected, (iv) require any action by, filing, registration, orqualification with, or Governmental Approval from, any Governmental Authority(except such Governmental Approvals which have already been obtained and are infull force and effect) or (v) constitute an event of default under anymaterial agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party orby which Borrower or any of its Subsidiaries may be bound in which the defaultcould reasonably be expected to have a material adverse effect on Borrower’sbusiness.

 

## **5.2****                               Collateral**.  Borrower has good title to, has rights in, andthe power to transfer each item of Collateral upon which it purports to grant aLien hereunder, free and clear of any and all Liens except PermittedLiens.  Borrower has no deposit accountsother than the deposit accounts with Bank and deposit accounts described in thePerfection Certificate delivered to Bank in connection herewith****or of which Borrower has given Bank notice****

 

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## and taken such actions as are necessary to give Bank aperfected security interest therein.  TheAccounts are bona fide, existing obligations of the Account Debtors.

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## The Collateral is not in the possession of any thirdparty bailee (such as a warehouse) except (x) as otherwise provided in thePerfection Certificate and (y) Equipment or Inventory in the possession ofthird party carriers in the ordinary course of business for delivery toBorrower or to customers of Borrower and its Subsidiaries. None of thecomponents of the Collateral shall be maintained at locations other than as providedin the Perfection Certificate or as Borrower has given Bank notice pursuant to Section 7.2.  In the event that Borrower, after the datehereof, intends to store or otherwise deliver any portion of the Collateral inan amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) in theaggregate at any time, to a bailee, then Borrower will first receive thewritten consent of Bank, such consent not to be unreasonably withheld, and suchbailee must execute and deliver a bailee agreement in form and substancesatisfactory to Bank in its sole discretion.

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## All Inventory is in all material respects of good andmarketable quality, free from material defects.

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## Borrower is the sole owner of its intellectualproperty, except for (i) licenses granted to its customers and/orlicensees in the ordinary course of business, and (ii) certain patentsthat are jointly owned by the Borrower and other third parties who havecollaborated with the Borrower on technical development projects.  As of the date hereof, each patent is validand enforceable and no part of the intellectual property has been judgedinvalid or unenforceable, in whole or in part, and to the best of Borrower’sknowledge, no claim has been made that any part of the intellectual propertyviolates the rights of any third party.

##  

## Except as noted on the Perfection Certificate,Borrower is not a party to, nor is bound by, any material license or otheragreement with respect to which Borrower is the licensee (a) thatprohibits or otherwise restricts Borrower from granting a security interest inBorrower’s interest in such license or agreement or any other property, or (b) forwhich a default under or termination of could interfere with the Bank’s rightto sell any Collateral.  Borrower shallprovide written notice to Bank within ten (10) days of entering orbecoming bound by any such material license or agreement (other thanover-the-counter software that is commercially available to the public).  Borrower shall take such steps as Bankrequests to obtain the consent of, or waiver by, any person whose consent orwaiver is necessary for (x) all such licenses or contract rights to bedeemed “Collateral” and for Bank to have a security interest in it that mightotherwise be restricted or prohibited by law or by the terms of any suchlicense or agreement (such consent or authorization may include a licensor’sagreement to a contingent assignment of the license to Bank if Bank determinesthat is necessary in its good faith judgment), whether now existing or enteredinto in the future, and (y) Bank to have the ability in the event of aliquidation of any Collateral to dispose of such Collateral in accordance withBank’s rights and remedies under this Agreement and the other Loan Documents.

##  

## **5.3****                               AccountsReceivable**.

##  

(a)                                  For eachAccount with respect to which Advances are requested, on the date each Advanceis requested and made, such Account shall meet the Minimum EligibilityRequirements set forth in Section 13 below.

 

(b)**                                **Allstatements made and all unpaid balances appearing in all invoices, instrumentsand other documents evidencing the Accounts are and shall be true and correctand all such invoices, instruments and other documents, and all of Borrower’sBooks are genuine and in all respects what they purport to be.  All sales and other transactions underlyingor giving rise to each Account shall comply in all material respects with allapplicable laws and governmental rules and regulations.  Borrower has no knowledge of any actual orimminent Insolvency Proceeding of any Account Debtor whose accounts are anEligible Account in any Borrowing Base Certificate.  To the best of Borrower’s knowledge, allsignatures and endorsements on all documents, instruments, and agreementsrelating to all Accounts are genuine, and all such documents, instruments andagreements are legally enforceable in accordance with their terms.

 

## **5.4****                               Litigation**.  Other than as disclosed on the PerfectionCertificate, as of the date hereof, there are no actions or proceedings pendingor, to the knowledge of the Responsible Officers, threatened in writing by oragainst Borrower or any of its Subsidiaries involving more than One MillionDollars ($1,000,000.00).

##  

## **5.5****                               No Material Deviation/Deterioration inFinancial Condition.**  Allconsolidated financial statements for Borrower and any of its Subsidiariesdelivered to Bank fairly present in all material respects Borrower’sconsolidated financial condition and Borrower’s consolidated results ofoperations.  There has not been 

 

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## any material deterioration in Borrower’s consolidatedfinancial condition since the date of the most recent financial statementssubmitted to Bank.

##  

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

##  

## **5.7****                               RegulatoryCompliance**.  Borrower is not an “investmentcompany” or a company “controlled” by an “investment company” under theInvestment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extendingcredit for margin stock (under Regulations T and U of the Federal Reserve Boardof Governors).  No Borrower nor anySubsidiaries is a “holding company” or an “affiliate” of a “holding company” ora “subsidiary company” of a “holding company” as each term is defined and usedin the Public Utility Holding Company Act of 2005.  Borrower has complied in all materialrespects with the Federal Fair Labor Standards Act.  Borrower has not violated any laws,ordinances or rules, the violation of which could reasonably be expected tohave a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets hasbeen used by Borrower or any Subsidiary or, to the best of Borrower’sknowledge, by previous Persons, in disposing, producing, storing, treating, ortransporting any hazardous substance other than legally.  Borrower and each of its Subsidiaries haveobtained all consents, approvals and authorizations of, made all declarationsor filings with, and given all notices to, all Government Authorities that arenecessary to continue their respective businesses as currently conducted.

##  

## **5.8****                               Subsidiaries;Investments**.  Other than as set forthin the Perfection Certificate, as of the date hereof, Borrower does not own anystock, partnership interest or other equity securities except for PermittedInvestments.

##  

## **5.9****                               TaxReturns and Payments; Pension Contributions**.  Borrower and its Subsidiaries have timelyfiled all required tax returns and reports, and Borrower and its Subsidiaries,if any, have timely paid all foreign, federal, state and local taxes,assessments, deposits and contributions owed by Borrower.  Borrower may defer payment of any contestedtaxes, provided that Borrower (a) in good faith contests its obligation topay the taxes by appropriate proceedings promptly and diligently instituted andconducted, (b) notifies Bank in writing of the commencement of, and anymaterial development in, the proceedings, (c) posts bonds or takes anyother steps required to prevent the governmental authority levying such contestedtaxes from obtaining a Lien upon any of the Collateral that is other than a “PermittedLien”.  Borrower is unaware of any claimsor adjustments proposed for any of Borrower’s prior tax years which couldresult in additional taxes becoming due and payable by Borrower in theaggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000).  Borrower has paid all amounts necessary tofund all present pension, profit sharing and deferred compensation plans inaccordance with their terms, and Borrower has not withdrawn from participationin, and has not permitted partial or complete termination of, or permitted theoccurrence of any other event with respect to, any such plan which couldreasonably be expected to result in any liability of Borrower, including anyliability to the Pension Benefit Guaranty Corporation or its successors or anyother governmental agency.

##  

## **5.10****                        Use ofProceeds**.  Borrower shall use theproceeds of the Credit Extensions solely as working capital and to fund itsgeneral business requirements and not for personal, family, household oragricultural purposes.

##  

## **5.11****                        FullDisclosure**.  No writtenrepresentation, warranty or other statement of Borrower in any certificate orwritten statement given to Bank, as of the date such representation, warranty,or other statement was made, taken together with all such written certificatesand written statements given to Bank, contains any untrue statement of amaterial fact or omits to state a material fact necessary to make thestatements contained in the certificates or statements not misleading (it beingrecognized by Bank that the projections and forecasts provided by Borrower ingood faith and based upon reasonable assumptions are not viewed as facts andthat actual results during the period or periods covered by such projectionsand forecasts may differ from the projected or forecasted results).

##  

**6****                                        ****AFFIRMATIVE COVENANTS**

** **

Borrower shall do all ofthe following:

 

## **6.1****                               GovernmentCompliance**.  Maintain its and all itsSubsidiaries’ legal existence and good standing in their respectivejurisdictions of formation and maintain qualification in each jurisdiction inwhich the 

 

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## failure to so qualify would reasonably be expected tohave a material adverse effect on Borrower’s business or operations.  Borrower shall comply, and have eachSubsidiary comply, with all laws, ordinances and regulations to which it issubject, the noncompliance with which could have a material adverse effect onBorrower’s business.

##  

## **6.2****                               FinancialStatements, Reports, Certificates**.

##  

(a)                                  Borrowershall provide Bank with the following:

 

(i) (A) weekly,and (B) upon each request for a Credit Extension, a Transaction Report;

 

(ii) within fifteen(15) days after the end of each month, (A) monthly accounts receivableagings, aged by invoice date, (B) monthly accounts payable agings, aged byinvoice date, and outstanding or held check registers, if any, and (C) monthlyreconciliations of accounts receivable agings (aged by invoice date),transaction reports, Deferred Revenue report, monthly cash report and generalledger;

 

(iii) withinforty-five (45) days after the end of each quarter a Compliance Certificatesigned by a Responsible Officer, certifying that as of the end of such quarter,Borrower was in full compliance with all of the terms and conditions of thisAgreement, and setting forth calculations showing compliance with the financialcovenants set forth in this Agreement and such other information as Bank shallreasonably request, including, without limitation, a statement that at the endof such quarter there were no held checks;

 

(iv) as soon asavailable, and in any event within forty-five (45) days after the end of eachfiscal quarter of Caliper, quarterly unaudited consolidated and consolidating(including each Borrower and any other Subsidiary of Caliper) financialstatements, including, without limitation, a company prepared consolidated andconsolidating balance sheet and income statement covering Caliper’sconsolidated (including each Borrower and any other Subsidiary of Caliper)operations during the period certified by a Responsible Officer and in a formacceptable to Bank;

 

(v) annually, whenpresented to Caliper’s board of directors, (A) annual operating budgets(including income statements, balance sheets and cash flow statements, bymonth) for the upcoming fiscal year of Borrower, and (B) annual financialprojections for the following fiscal year (presented on a quarterly basis),together with any related business forecasts used in the preparation of suchannual financial projections; and

 

(vi) as soon asavailable, and in any event within one hundred twenty (120) days following theend of Caliper’s fiscal year, annual audited consolidated and consolidating(including each Borrower and any other Subsidiary of Caliper) financialstatements certified by, and with an unqualified opinion of, independentcertified public accountants acceptable to Bank.

 

(b)                                 In the event that Borrower is or becomessubject to the reporting requirements under the Securities Exchange Act of1934, as amended, within five (5) days after filing, all reports on Form 10-K,10-Q and 8-K filed with the Securities and Exchange Commission or a linkthereto on Borrower’s or another website on the Internet.

 

(c)                                  In connection with the delivery of theCompliance Certificate required pursuant to Section 6.2(a)(iii) above,written notice of (i) any material change in the composition of theintellectual property, (ii) the registration of any copyright (including anysubsequent ownership right of Borrower in or to any copyright), patent(registered in the United States), or trademark not previously disclosed toBank, or (iii) Borrower’s knowledge of an event that materially adverselyaffects the value of the intellectual property.

 

## **6.3****                               AccountsReceivable**.

##  

(a)**                                 **Schedulesand Documents Relating to Accounts*.* Borrower shall deliver to Bank transactionreports and schedules of collections, as provided in Section 6.2, on Bank’sstandard forms; provided, however, that Borrower’s failure toexecute and deliver the same shall not affect or limit Bank’s Lien and otherrights in all of Borrower’s Accounts, nor shall Bank’s failure to advance orlend against a specific Account affect or limit Bank’s Lien and other rightstherein.  If requested by Bank, Borrowershall furnish Bank with copies (or, at Bank’s request, originals) of allcontracts, orders, invoices, and other similar documents, and all shippinginstructions, delivery receipts, bills of lading, and other evidence of delivery,for any goods the sale or disposition of 

 

10

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whichgave rise to such Accounts.  In addition,Borrower shall deliver to Bank, on its request, the originals of allinstruments, chattel paper, security agreements, guarantees and other documentsand property evidencing or securing any Accounts, in the same form as received,with all necessary endorsements, and copies of all credit memos.

 

(b)                                 Disputes.  Borrower shall promptly notify Bank of alldisputes or claims in excess of Two Hundred Fifty Thousand Dollars ($250,000)in the aggregate relating to Accounts. Borrower may forgive (completely or partially), compromise, or settleany Account for less than payment in full, or agree to do any of the foregoingso long as (i) Borrower does so in good faith, in a commerciallyreasonable manner, in the ordinary course of business, in arm’s-lengthtransactions, and reports the same to Bank in the regular reports provided toBank; (ii) no Default or Event of Default has occurred and is continuing;and (iii) after taking into account all such discounts, settlements andforgiveness, the total outstanding Advances will not exceed the AvailabilityAmount.

 

(c)                                  Collectionof Accounts. Borrower shall have the right to collect all Accounts, unless and untila Default or an Event of Default has occurred and is continuing.  All payments on, and proceeds of, Accountsshall be deposited directly by the applicable Account Debtor into a lockboxaccount, or such other “blocked account” as Bank may specify, pursuant to ablocked account agreement in form and substance satisfactory to Bank in itssole discretion.  Whether or not an Eventof Default has occurred and is continuing, Borrower shall hold all payments on,and proceeds of, Accounts in trust for Bank, and Borrower shall promptlydeliver all such payments and proceeds to Bank in their original form, dulyendorsed, to be applied to the Obligations pursuant to the terms of Section 9.5hereof; provided, however, that on any date in which NetLiquidity is greater than or equal to Five Hundred Thousand Dollars ($500,000),such payments and proceeds shall be transferred to an account maintained byBorrower at Bank.

 

(d)                                 Returns*.*  Provided no Event ofDefault has occurred and is continuing, if any Account Debtor returns anyInventory in an amount in excess of Two Hundred Fifty Thousand Dollars($250,000) in the aggregate to Borrower, Borrower shall promptly (i) determinethe reason for such return, (ii) issue a credit memorandum to the AccountDebtor in the appropriate amount, and (iii) provide a copy of such creditmemorandum to Bank, upon request from Bank. In the event any such attempted return occurs after the occurrence andduring the continuance of any Event of Default, Borrower shall hold thereturned Inventory in trust for Bank, and immediately notify Bank of thereturn of the Inventory.

 

(e)                                  Verification*.*  Bank may, from timeto time, verify directly with the respective Account Debtors the validity,amount and other matters relating to the Accounts, either in the name ofBorrower or Bank or such other name as Bank may choose.

 

## (f)                                    NoLiability*.* Bank shall not be responsible or liable for any shortage or discrepancyin, damage to, or loss or destruction of, any goods, the sale or otherdisposition of which gives rise to an Account, or for any error, act, omission,or delay of any kind occurring in the settlement, failure to settle, collectionor failure to collect any Account, or for settling any Account in good faithfor less than the full amount thereof, nor shall Bank be deemed to beresponsible for any of Borrower’s obligations under any contract or agreementgiving rise to an Account.  Nothingherein shall, however, relieve Bank from liability for its own gross negligenceor willful misconduct.

##  

## **6.4****                               Remittanceof Proceeds**.  Except as otherwiseprovided in Section 6.3(c), deliver, in kind, all proceeds arising fromthe disposition of any Collateral to Bank in the original form in whichreceived by Borrower not later than the following Business Day after receipt byBorrower, to be applied to the Obligations pursuant to the terms of Section 9.4hereof; provided that, if no Default or Event of Default has occurredand is continuing, Borrower shall not be obligated to remit to Bank theproceeds of the sale of worn out or obsolete Equipment disposed of by Borrowerin good faith in an arm’s length transaction for an aggregate purchase price ofTwenty Five Thousand Dollars ($25,000) orless (for all such transactions in any fiscal year).  Borrower agrees that it will not commingleproceeds of Collateral (other than proceeds from Accounts or proceeds fromInventory sales in the ordinary course of business, in each case remitted toBank in accordance with Section 6.3(c) hereof) with any of Borrower’sother funds or property, but will hold such proceeds separate and apart fromsuch other funds and property and in an express trust for Bank.  Nothing in this Section limits therestrictions on disposition of Collateral set forth elsewhere in thisAgreement.

##  

**6.5****                              ****Taxes; Pensions**. Make, and cause each of its Subsidiaries, if any, to make, timelypayment of all foreign, federal, state and local taxes or assessments (otherthan taxes and assessments which Borrower is contesting 

 

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pursuantto the terms of Section 5.9 hereof), and shall deliver to Bank, on demand,appropriate certificates attesting to such payments, and pay all amountsnecessary to fund all present pension, profit sharing and deferred compensationplans in accordance with their terms.

 

## **6.6****                               Accessto Collateral; Books and Records**.  Atreasonable times, on one (1) Business Day’s notice (provided no notice isrequired if an Event of Default has occurred and is continuing), Bank, or itsagents, shall have the right, on a semi-annual basis (or more frequently afterthe occurrence of an Event of Default) to inspect the Collateral and the rightto audit and copy Borrower’s Books.  Theforegoing inspections and audits shall be at Borrower’s expense, and the chargetherefor shall be $750 per person per day (or such higher amount as shallrepresent Bank’s then-current standard charge for the same), plus reasonableout-of-pocket expenses.  In the eventBorrower and Bank schedule an audit more than ten (10) days in advance,and Borrower cancels or seeks to reschedules the audit with less than ten (10) dayswritten notice to Bank, then (without limiting any of Bank’s rights orremedies), Borrower shall pay Bank a fee of $1,000 plus any out-of-pocketexpenses incurred by Bank to compensate Bank for the anticipated costs andexpenses of the cancellation or rescheduling.

##  

## **6.7****                              ****Insurance**.  Keep itsbusiness and the Collateral insured for risks and in amounts standard forcompanies in Borrower’s industry and location and as Bank may reasonablyrequest.  Insurance policies shall be ina form, with companies, and in amounts that are satisfactory to Bank.  All property policies shall have a lender’sloss payable endorsement showing Bank as the sole lender loss payee and waivesubrogation against Bank, and all liability policies shall show, or haveendorsements showing, Bank as an additional insured.  All policies (or the loss payable andadditional insured endorsements) shall provide that the insurer must give Bankat least thirty (30) days notice before canceling, amending, or declining torenew its policy.  At Bank’s request,Borrower shall deliver certified copies of policies and evidence of all premiumpayments.  Proceeds payable under anypolicy shall, at Bank’s option, be payable to Bank on account of theObligations.  Notwithstanding theforegoing, (a) so long as no Event of Default has occurred and iscontinuing, Borrower shall have the option of applying the proceeds of anycasualty policy up to Two Hundred Fifty Thousand Dollars ($250,000), in theaggregate, toward the replacement or repair of destroyed or damaged property;provided that any such replaced or repaired property (i) shall be of equalor like value as the replaced or repaired Collateral and (ii) shall bedeemed Collateral in which Bank has been granted a first priority securityinterest, and (b) after the occurrence and during the continuance of anEvent of Default, all proceeds payable under such casualty policy shall, at theoption of Bank, be payable to Bank on account of the Obligations.  If Borrower fails to obtain insurance asrequired under this Section 6.7 or to pay any amount or furnish anyrequired proof of payment to third persons and Bank, Bank may make all or partof such payment or obtain such insurance policies required in this Section 6.7,and take any action under the policies Bank deems prudent.

##  

## **6.8****                               OperatingAccounts**.

##  

#### (a)                                  Maintain(i) its and its Subsidiaries’ primary depository, operating and securitiesaccounts with Bank and Bank’s affiliates, with all excess funds maintained ator invested through Bank or an affiliate of Bank****whichaccounts shall represent at least seventy-five percent (75%) of the dollarvalue of Borrower’s and such Subsidiaries accounts at all financialinstitutions; and (ii) at all times, maintain balance of not less thanThree Million Dollars ($3,000,000) in a designated deposit account at Bank.*** ***Anyguarantor shall maintain its primary depository, operating and securitiesaccounts with Bank, or SVB Securities.

####  

#### (b)                                 ProvideBank five (5) days prior-written notice before establishing any CollateralAccount at or with any bank or financial institution other than Bank or itsAffiliates.  In addition, for eachCollateral Account that Borrower at any time maintains, Borrower shall causethe applicable bank or financial institution (other than Bank) at or with whichany Collateral Account is maintained to execute and deliver a Control Agreementor other appropriate instrument with respect to such Collateral Account toperfect Bank’s Lien in such Collateral Account in accordance with the termshereunder.  The provisions of theprevious sentence shall not apply to deposit accounts exclusively used forpayroll, payroll taxes and other employee wage and benefit payments to or forthe benefit of Borrower’s employees and identified to Bank by Borrower as such.

####  

## **6.9****                               FinancialCovenants**.

##  

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

 

#### (a)                                  AdjustedQuick Ratio.  A ratio of Quick Assetsto Quick Liabilities of at least 0.95****to 1.0 for thequarter ending December 31, 2008 and for each fiscal quarter thereafter.

 

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#### (b)                                 MinimumEBITDA-Cap Ex.  Borrower’s EBITDAminus its capital expenditures, (“**EBITDA-Cap Ex**”)for the two (2) quarter period ending as of the last day of each quarter,shall be in an amount equal to: (i) losses not greater than (A) OneMillion Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31,2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for thequarter ending March 31, 2009; (C) Eight Million Seven HundredThousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) FiveMillion Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30,2009; (ii) Sixty Thousand Dollars ($60,000) for the quarter ending December 31,2009; (iii) losses not greater than (A) Two Million Dollars($2,000,000) for the quarter ending March 31, 2010; (B) Six MillionDollars ($6,000,000) for the quarter ending June 30, 2010; and (C) TwoMillion Dollars ($2,000,000) for the quarter ending September 30, 2010;and (iv) Three Million Eight Hundred Thousand Dollars ($3,800,000) for thequarter ending December 31, 2010.

####  

## **6.10****                        Protectionand Registration of Intellectual Property Rights**.  Borrower shall: (a) protect, defend andmaintain the validity and enforceability of its intellectual property in amanner consistent with prudent business practices; (b) promptly adviseBank in writing of infringements of its intellectual property; and (c) notallow any intellectual property material to Borrower’s business to beabandoned, forfeited or dedicated to the public without Bank’s written consent.

##  

## **6.11****                        LitigationCooperation**.  From the date hereofand continuing through the termination of this Agreement, make available toBank, without expense to Bank, Borrower and its officers, employees and agentsand Borrower’s Books, to the extent that Bank may deem them reasonablynecessary to prosecute or defend any third-party suit or proceeding institutedby or against Bank with respect to any Collateral or relating to Borrower.

##  

## **6.12****                        FurtherAssurances**.  Borrower shall executeany further instruments and take further action as Bank reasonably requests toperfect or continue Bank’s Lien in the Collateral or to effect the purposes ofthis Agreement.

##  

**6**.**13**                        **Creation/Acquisition of Subsidiaries**. In the event Borrower or any Subsidiary creates or acquires any Subsidiary,Borrower and such Subsidiary shall promptly notify Bank of the creation oracquisition of such new Subsidiary and, at the request of Bank, take all suchaction as may be reasonably required by Bank to cause each such Subsidiary tobecome a co-Borrower or guarantor under the Loan Documents and grant acontinuing pledge and security interest in and to the assets of such Subsidiary(substantially as described on Exhibit A hereto); and, at the request ofBank, Borrower shall grant and pledge to Bank a perfected security interest inthe stock, units or other evidence of ownership of each such Subsidiary.

 

**7****                                        ****NEGATIVE COVENANTS**

** **

Borrower shall not do anyof the following without Bank’s prior written consent:

 

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

##  

## **7.2****                               Changesin Business, Management, Ownership, Control, or Business Locations**.  (a) Engage in or permit any of itsSubsidiaries to engage in any business other than the businesses currentlyengaged in by Borrower and such Subsidiary, as applicable, or reasonablyrelated thereto; (b) liquidate or dissolve; or (c) enter into anytransaction or series of related transactions in which the stockholders ofBorrower immediately prior to the first such transaction own less than fiftyone percent (51%) of the voting stock of Borrower immediately after givingeffect to such transaction or related series of such transactions (other thanby the sale of Borrower’s equity securities in a public offering or to venturecapital investors so long as Borrower identifies to Bank the venture capitalinvestors prior to the closing of the transaction).  Borrower shall not, without at least ten (10) daysprior written notice to Bank: (1) add any new offices or businesslocations at which any material amount of Inventory or Equipment will belocated, (2) change its jurisdiction of organization, (3) change itsorganizational structure or type, 

 

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## (4) change its legal name, or (5) change any organizationalnumber (if any) assigned by its jurisdiction of organization.

##  

## **7.3****                               Mergersor Acquisitions**.  Merge orconsolidate, or permit any of its Subsidiaries to merge or consolidate, withany other Person, or acquire, or permit any of its Subsidiaries to acquire, allor substantially all of the capital stock or property of another Person.  A Subsidiary may merge or consolidate intoanother Subsidiary or into Borrower.

##  

## **7.4****                               Indebtedness**.  Create, incur, assume, or be liable for anyIndebtedness, or permit any Subsidiary to do so, other than PermittedIndebtedness.

##  

## **7.5****                               Encumbrance**.  Create, incur, or allow any Lien on anyof  its property, or assign or convey anyright to receive income, including the sale of any Accounts, or permit any ofits Subsidiaries to do so, except for Permitted Liens, permit any Collateralnot to be subject to the first priority security interest granted herein, orenter into any agreement, document, instrument or other arrangement (exceptwith or in favor of Bank) with any Person which directly or indirectlyprohibits or has the effect of prohibiting Borrower or any Subsidiary fromassigning, mortgaging, pledging, granting a security interest in or upon, orencumbering any of Borrower’s or any Subsidiary’s intellectual property, exceptas is otherwise permitted in Section 7.1 hereof and the definition of “PermittedLien” herein.

##  

## **7.6****                               Maintenanceof Collateral Accounts**.  Maintain anyCollateral Account except pursuant to the terms of Section 6.8(b) hereof.

##  

## **7.7**                               **Investments; Distributions**. (a) Directly or indirectly make any Investment other than PermittedInvestments, or permit any of its Subsidiaries to do so; or (b) pay anydividends or make any distribution or payment or redeem, retire or purchase anycapital stock provided that (i) Borrower may convert any of itsconvertible securities into other securities pursuant to the terms of suchconvertible securities or otherwise in exchange thereof, (ii) Borrower maypay dividends solely in common stock; and (iii) Borrower may repurchasethe stock of former employees or consultants pursuant to stock repurchaseagreements so long as an Event of Default does not exist at the time of suchrepurchase and would not exist after giving effect to such repurchase, providedsuch repurchase does not exceed in the aggregate of Fifty Thousand Dollars($50,000) per fiscal year.

##  

## **7.8****                               Transactionswith Affiliates**.  Directly orindirectly enter into or permit to exist any material transaction with anyAffiliate of Borrower, except for transactions that are in the ordinary courseof Borrower’s business, upon fair and reasonable terms that are no lessfavorable to Borrower than would be obtained in an arm’s length transactionwith a non-affiliated Person.

##  

## **7.9****                               SubordinatedDebt**.  (a) Make or permit anypayment on any Subordinated Debt, except under the terms of the subordination,intercreditor, or other similar agreement to which such Subordinated Debt issubject, or (b) amend any provision in any document relating to theSubordinated Debt which would increase the amount thereof or adversely affectthe subordination thereof to Obligations owed to Bank.

##  

## **7.10****                        Compliance**.  Become an “investment company” or a companycontrolled by an “investment company”, under the Investment Company Act of1940, as amended, or undertake as one of its important activities extendingcredit to purchase or carry margin stock (as defined in Regulation U of theBoard of Governors of the Federal Reserve System), or use the proceeds of anyCredit Extension for that purpose; fail to meet the minimum fundingrequirements of ERISA, permit a Reportable Event or non-exempt ProhibitedTransaction, as defined in ERISA, to occur; fail to comply with the FederalFair Labor Standards Act or violate any other law or regulation, if the violationcould reasonably be expected to have a material adverse effect on Borrower’sbusiness, or permit any of its Subsidiaries to do so; withdraw or permit anySubsidiary to withdraw from participation in, permit partial or completetermination of, or permit the occurrence of any other event with respect to,any present pension, profit sharing and deferred compensation plan which couldreasonably be expected to result in any liability of Borrower, including anyliability to the Pension Benefit Guaranty Corporation or its successors or anyother governmental agency.

##  

**8****                                        ****EVENTS OF DEFAULT**

 

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

 

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## **8.1****                               PaymentDefault**.  Borrower fails to (a) makeany payment of principal or interest on any Credit Extension on its due date,or (b) pay any other Obligations within three (3) Business Days aftersuch Obligations are due and payable. During the cure period, the failure to cure the payment default is notan Event of Default (but no Credit Extension will be made during the cureperiod);

##  

## **8.2****                               CovenantDefault**.

##  

(a) Borrower failsor neglects to perform any obligation in Sections 6.2, 6.4, 6.5, 6.6, 6.7, 6.8,6.9, 6.10, or 6.11, or violates any covenant in Section 7; or

 

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

##  

## **8.3****                               MaterialAdverse Change**.  A Material AdverseChange occurs;

##  

## **8.4****                               Attachment**.  (a) Any material portion of Borrower’sassets is attached, seized, levied on, or comes into possession of a trustee orreceiver and the attachment, seizure or levy is not removed in ten (10) days;(b) the service of process upon Bank (or Bank’s Affiliate) seeking to attach,by trustee or similar process, any funds of Borrower, or of any entity undercontrol of Borrower (including a Subsidiary) on deposit with Bank; (c) Borroweris enjoined, restrained, or prevented by court order from conducting a materialpart of its business; (d) a judgment or other claim in excess of OneMillion Dollars ($1,000,000) becomes a Lien on any of Borrower’s assets; or (e) anotice of lien, levy, or assessment is filed against any of Borrower’s assetsby any government agency and not paid within ten (10) days after Borrowerreceives notice.  These are not Events ofDefault if stayed or if a bond is posted pending contest by Borrower (but noCredit Extensions shall be made during the cure period);

##  

## **8.5****                               Insolvency**.  (a) Borrower is unable to pay its debts(including trade debts) as they become due or otherwise becomes insolvent; (b) Borrowerbegins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begunagainst Borrower and not dismissed or stayed within forty five (45) days (butno Credit Extensions shall be made while of any of the conditions described inclause (a) exist and/or until any Insolvency Proceeding is dismissed);

##  

## **8.6****                               OtherAgreements**.  There is a default inany agreement to which Borrower or any guarantor is a party with a third partyor parties resulting in a right by such third party or parties, whether or notexercised, to accelerate the maturity of any Indebtedness in an amount inexcess of One Million Dollars ($1,000,000) or that could have a materialadverse effect on Borrower’s business;

##  

## **8.7****                               Judgments**.  A judgment or judgments for the payment ofmoney in an amount, individually or in the aggregate, of at least One MillionDollars ($1,000,000) (not covered by independent third-party insurance) shallbe rendered against Borrower and shall remain unsatisfied and unstayed for aperiod of thirty (30) days after the entry thereof (provided that no CreditExtensions will be made prior to the satisfaction or stay of such judgment);

##  

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

##  

## **8.9****                               SubordinatedDebt**.  A default or breach occursunder any agreement between Borrower and any creditor of Borrower that signed asubordination, intercreditor, or other similar agreement with Bank, or anycreditor that has signed such an agreement with Bank breaches any terms of suchagreement.

 

15

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**9****                                        ****BANK’S RIGHTS AND REMEDIES**

##  

## **9.1****                               Rightsand Remedies**.  While an Event of Defaultoccurs and continues Bank may, without notice or demand, do any or all of thefollowing:

##  

#### (a)                                  declareall Obligations immediately due and payable (but if an Event of Defaultdescribed in Section 8.5 occurs all Obligations are immediately due andpayable without any action by Bank);

####  

#### (b)                                 stopadvancing money or extending credit for Borrower’s benefit under this Agreementor under any other agreement between Borrower and Bank;

####  

#### (c)                                  demandthat Borrower (i) deposits cash with Bank in an amount equal to theaggregate amount of any Letters of Credit remaining undrawn, as collateralsecurity for the repayment of any future drawings under such Letters of Credit,and Borrower shall forthwith deposit and pay such amounts, and (ii) pay inadvance all Letter of Credit fees scheduled to be paid or payable over theremaining term of any Letters of Credit;

####  

#### (d)                                 terminateany FX Forward Contracts;

####  

#### (e)                                  settleor adjust disputes and claims directly with Account Debtors for amounts onterms and in any order that Bank considers advisable, notify any Person owingBorrower money of Bank’s security interest in such funds, and verify the amountof such account;

####  

#### (f)                                    makeany payments and do any acts it considers necessary or reasonable to protectthe Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral ifBank requests and make it available as Bank designates.  Bank may enter premises where the Collateral islocated, take and maintain possession of any part of the Collateral, and pay,purchase, contest, or compromise any Lien which appears to be prior or superiorto its security interest and pay all expenses incurred. Borrower grants Bank alicense to enter and occupy any of its premises, without charge, to exerciseany of Bank’s rights or remedies;

####  

#### (g)                                 applyto the Obligations any (i) balances and deposits of Borrower it holds, or (ii) anyamount held by Bank owing to or for the credit or the account of Borrower;

####  

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

####  

#### (i)                                     placea “hold” on any account maintained with Bank and/or deliver a notice ofexclusive control, any entitlement order, or other directions or instructionspursuant to any Control Agreement or similar agreements providing control ofany Collateral;

####  

#### (j)                                     demandand receive possession of Borrower’s Books; and

####  

#### (k)                                  exerciseall rights and remedies available to Bank under the Loan Documents or at law orequity, including all remedies provided under the Code (including disposal ofthe Collateral pursuant to the terms thereof).

####  

## **9.2****                               Powerof Attorney**.  Borrower herebyirrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon theoccurrence and during the continuance of an Event of Default, to: (a) endorseBorrower’s name on any checks or other forms of payment or security; (b) signBorrower’s name on any invoice or bill of lading for any Account or draftsagainst Account Debtors; (c) settle and adjust disputes and claims aboutthe Accounts directly with Account Debtors, for amounts and on terms Bankdetermines reasonable; (d) make, settle, and adjust all claims underBorrower’s insurance policies; (e) pay, contest or settle any Lien,charge, encumbrance, security interest, and adverse claim in or to theCollateral, or any judgment based thereon, or otherwise take any action toterminate or discharge the same; and (f) transfer the Collateral into thename of Bank or a third party as the Code permits.  Borrower hereby appoints Bank as its lawfulattorney-in-fact to sign Borrower’s name on any documents necessary to perfector continue the perfection of any security interest regardless of whether anEvent of Default has occurred until all Obligations have been satisfied in fulland Bank is under no further obligation to make Credit Extensions 

 

16

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## hereunder.  Bank’sforegoing appointment as Borrower’s attorney in fact, and all of Bank’s rightsand powers, coupled with an interest, are irrevocable until all Obligationshave been fully repaid and performed and Bank’s obligation to provide CreditExtensions terminates.

##  

## **9.3****                               ProtectivePayments**.  If Borrower fails toobtain the insurance called for by Section 6.7 or fails to pay any premiumthereon or fails to pay any other amount which Borrower is obligated to payunder this Agreement or any other Loan Document, Bank may obtain such insuranceor make such payment, and all amounts so paid by Bank are Bank Expenses andimmediately due and payable, bearing interest at the then highest applicablerate, and secured by the Collateral. Bank will make reasonable efforts to provide Borrower with notice ofBank obtaining such insurance at the time it is obtained or within a reasonabletime thereafter.  No payments by Bank aredeemed an agreement to make similar payments in the future or Bank’s waiver ofany Event of Default.

##  

## **9.4****                               Applicationof Payments and Proceeds**.  Unless anEvent of Default has occurred and is continuing and subject to Section 6.3(c) hereof,Bank may apply any funds in its possession, whether from Borrower accountbalances, payments, or proceeds realized as the result of any collection ofAccounts or other disposition of the Collateral, first, to Bank Expenses,including without limitation, the reasonable costs, expenses, liabilities,obligations and attorneys’ fees incurred by Bank in the exercise of its rightsunder this Agreement; second, to the interest due upon any of the Obligations;and third, to the principal of the Obligations and any applicable fees andother charges, in such order as Bank shall determine in its solediscretion.  Any surplus shall be paid toBorrower or other Persons legally entitled thereto; Borrower shall remainliable to Bank for any deficiency.  If anEvent of Default has occurred and is continuing, Bank may apply any funds inits possession, whether from Borrower account balances, payments, proceedsrealized as the result of any collection of Accounts or other disposition ofthe Collateral, or otherwise, to the Obligations in such order as Bank shalldetermine in its sole discretion.  Anysurplus shall be paid to Borrower or to other Persons legally entitled thereto;Borrower shall remain liable to Bank for any deficiency.  If Bank, in its good faith business judgment,directly or indirectly enters into a deferred payment or other credittransaction with any purchaser at any sale of Collateral, Bank shall have theoption, exercisable at any time, of either reducing the Obligations by theprincipal amount of the purchase price or deferring the reduction of theObligations until the actual receipt by Bank of cash therefor.

##  

## **9.5****                               Bank’sLiability for Collateral**.  So long asBank complies with reasonable banking practices regarding the safekeeping ofthe Collateral in the possession or under the control of Bank, Bank shall notbe liable or responsible for: (a) the safekeeping of the Collateral; (b) anyloss or damage to the Collateral; (c) any diminution in the value of theCollateral; or (d) any act or default of any carrier, warehouseman,bailee, or other Person.  Borrower bearsall risk of loss, damage or destruction of the Collateral.

##  

## **9.6****                               NoWaiver; Remedies Cumulative**.  Bank’sfailure, at any time or times, to require strict performance by Borrower of anyprovision of this Agreement or any other Loan Document shall not waive, affect,or diminish any right of Bank thereafter to demand strict performance andcompliance herewith or therewith.  Nowaiver hereunder shall be effective unless signed by Bank and then is onlyeffective for the specific instance and purpose for which it is given.  Bank’s rights and remedies under thisAgreement and the other Loan Documents are cumulative.  Bank has all rights and remedies provided underthe Code, by law, or in equity.  Bank’sexercise of one right or remedy is not an election, and Bank’s waiver of anyEvent of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, oracquiescence.

##  

## **9.7****                               DemandWaiver**.  Borrower waives demand,notice of default or dishonor, notice of payment and nonpayment, notice of anydefault, nonpayment at maturity, release, compromise, settlement, extension, orrenewal of accounts, documents, instruments, chattel paper, and guarantees heldby Bank on which Borrower is liable.

##  

**10****                                 ****NOTICES**

** **

All notices, consents,requests, approvals, demands, or other communication (collectively, “**Communication**”), other than Advance requests made pursuantto Section 3.4, by any party to this Agreement or any other Loan Documentmust be in writing and be delivered or sent by facsimile at the addresses orfacsimile numbers listed below.  Bank orBorrower may change its notice address by giving the other party written noticethereof.  Each such Communication shallbe deemed to have been validly served, given, or delivered: (a) upon theearlier of actual receipt and three (3) Business Days after deposit in theU.S. mail, registered or certified mail, return receipt requested, with properpostage prepaid; (b) upon transmission, when sent by facsimile orelectronic mail transmission (with such facsimile or electronic mail promptlyconfirmed by delivery of a copy by personal delivery or United States mail asotherwise provided in this Section 10); (c) one (1) Business Dayafter deposit with a 

 

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reputableovernight courier with all charges prepaid; or (d) when delivered, ifhand-delivered by messenger, all of which shall be addressed to the party to benotified and sent to the address or facsimile number indicated below.  Advance requests made pursuant to Section 3.4must be in writing and may be in the form of electronic mail, delivered to Bankby Borrower at the e-mail address of Bank provided below and shall be deemed tohave been validly served, given, or delivered when sent (with such electronicmail promptly confirmed by delivery of a copy by personal delivery or UnitedStates mail as otherwise provided in this Section 10).  Bank or Borrower may change its address,facsimile number, or electronic mail address by giving the other party writtennotice thereof in accordance with the terms of this Section 10.

 

If to Borrower:                   Caliper LifeSciences, Inc.
|            | 68 Elm Street                                |
|-----------------|----------------------------------------------|
|            | Hopkinton,  Massachusetts 01748              |
|            | Attn: Peter McAree,  Chief Financial Officer |
|            | Fax: (508) 497-2726                          |
|            | Email:  Peter.Mcaree@caliperls.com |
|            |                                         |
| with a copy to: | Caliper Life  Sciences, Inc.            |
|            | 850 Marina Village  Parkway                  |
|            | Alameda, California  94501-1038              |
|            | Attn: Steve Creager,  General Counsel        |
|            | Fax: (650) 623-0505                          |
|            | Email:  Stephen.Creager@caliperls.com        |
|            |                                         |
| If to Bank:     | Silicon Valley Bank                          |
|            | One Newton Executive  Park, Suite 200   |
|            | 2221 Washington Street                       |
|            | Newton, Massachusetts  02462                 |
|            | Attn:   Mr.  Ryan Ravenscroft |
|            | Fax:   (617) 969-5962              |
|            | Email: rravenscroft@svb.com             |
|            |                                         |
| with a copy to: | Riemer &  Braunstein LLP            |
|            | Three Center Plaza                           |
|            | Boston, Massachusetts  02108                 |
|            | Attn: Charles W.  Stavros, Esquire           |
|            | Fax: (617) 880-3477                          |
|            | Email:  cstavros@riemerlaw.com               |

 

**11****                                 ****CHOICE OF LAW, VENUE ANDJURY TRIAL WAIVER AND JUDICIAL REFERENCE**

** **

Massachusetts law governs the Loan Documents (otherthan the Securities Account Control Agreements executed in connection with theAmended and Restated Loan and Security Agreement, by and among Borrower andBank), without regard to principles of conflicts of law.  Borrower and Bank each submit to theexclusive jurisdiction of the State and Federal courts in Massachusetts;provided, however, that nothing in this Agreement shall be deemed to operate topreclude Bank from bringing suit or taking other legal action in any otherjurisdiction to realize on the Collateral or any other security for theObligations, or to enforce a judgment or other court order in favor ofBank.  Borrower expressly submits andconsents in advance to such jurisdiction in any action or suit commenced in anysuch court, and Borrower hereby waives any objection that it may have basedupon lack of personal jurisdiction, improper venue, or forum non conveniens andhereby consents to the granting of such legal or equitable relief as is deemedappropriate by such court.  Borrowerhereby waives personal service of the summons, complaints, and other processissued in such action or suit and agrees that service of such summons,complaints, and other process may be made by registered or certified mailaddressed to Borrower at the address set forth in Section 10 of thisAgreement and that service so made shall be deemed completed upon the earlierto occur of Borrower’s actual receipt thereof or three (3) days afterdeposit in the U.S. mails, proper postage prepaid. NOTWITHSTANDING ANYTHING TOTHE CONTRARY SET FORTH HEREINABOVE, BANK SHALL SPECIFICALLY HAVE THE RIGHT TOBRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTSOF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TOREALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINSTBORROWER OR ITS PROPERTY.

 

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**TO THE EXTENT PERMITTED BY APPLICABLE LAW,BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSEOF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS ORANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALLOTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTERINTO THIS AGREEMENT.  EACH PARTY HASREVIEWED THIS WAIVER WITH ITS COUNSEL.**

 

**12****                                 ****GENERAL PROVISIONS**

** **

## **12.1****                        TerminationPrior to Maturity Date**.  ThisAgreement may be terminated prior to the Revolving Line Maturity Date byBorrower, effective three (3) Business Days after written notice oftermination is given to Bank or if Bank’s obligation to fund Credit Extensionsterminates pursuant to the terms of Section 2.1.1(c).  Notwithstanding any such termination, Bank’slien and security interest in the Collateral shall continue until Borrowerfully satisfies its Obligations.  If suchtermination is at Borrower’s election, Borrower shall pay to Bank, in additionto the payment of any other expenses or fees then-owing, a termination fee inan amount equal to (i) from the Effective Date through and including thefirst anniversary of the Effective Date, one-half of one percent of theRevolving Line (i.e. One Hundred Twenty Five Thousand Dollars ($125,000)), and (ii) thereafter,$0.00; provided that no termination fee shall be charged if the credit facilityhereunder is replaced with a new facility from another division of SiliconValley Bank.  Upon payment in full of theObligations and at such time as Bank’s obligation to makeCredit Extensions has terminated, Bank shall release its liens and securityinterests in the Collateral and all rights therein shall revert to Borrower.

##  

## **12.2****                        Successorsand Assigns**.  This Agreement bindsand is for the benefit of the successors and permitted assigns of eachparty.  Borrower may not assign thisAgreement or any rights or obligations under it without Bank’s prior writtenconsent (which may be granted or withheld in Bank’s reasonablediscretion).  Bank has the right, withoutthe consent of or notice to Borrower, to sell, transfer, negotiate, or grantparticipation in all or any part of, or any interest in, Bank’s obligations,rights, and benefits under this Agreement and the other Loan Documents.

##  

## **12.3****                        Indemnification**.  Borrower agrees to indemnify, defend and holdBank and its directors, officers, employees, agents, attorneys, or any otherPerson affiliated with or representing Bank harmless against: (a) allobligations, demands, claims, and liabilities (collectively, “**Claims**”) asserted by any other party in connection with thetransactions contemplated by the Loan Documents; and (b) all losses orBank Expenses incurred, or paid by Bank from, following, or arising fromtransactions between Bank and Borrower (including reasonable attorneys’ feesand expenses), except for Claims and/or losses directly caused by Bank’s grossnegligence or willful misconduct.

##  

## **12.4****                        Time ofEssence**.  Time is of the essence forthe performance of all Obligations in this Agreement.

##  

## **12.5****                        Severabilityof Provisions**.  Each provision ofthis Agreement is severable from every other provision in determining theenforceability of any provision.

##  

## **12.6****                        Amendmentsin Writing; Integration**.  Allamendments to this Agreement must be in writing signed by both Bank andBorrower.  This Agreement and the LoanDocuments represent the entire agreement about this subject matter andsupersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, andnegotiations between the parties about the subject matter of this Agreement andthe Loan Documents merge into this Agreement and the Loan Documents.

##  

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

##  

## **12.8****                        Survival**.  All covenants, representations and warrantiesmade in this Agreement continue in full force until this Agreement hasterminated pursuant to its terms and all Obligations (other than inchoateindemnity obligations and any other obligations which, by their terms, are tosurvive the termination of this Agreement) have been satisfied.  The obligation of Borrower in Section 12.3to indemnify Bank shall survive until the statute of limitations with respectto such claim or cause of action shall have run.

 

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## **12.9****                        Confidentiality**.  In handling any confidential information,Bank shall exercise the same degree of care that it exercises for its ownproprietary information, but disclosure of information may be made: (a) toBank’s Subsidiaries or Affiliates; (b) to prospective transferees orpurchasers of any interest in the Credit Extensions (provided, however, Bank shalluse commercially reasonable efforts to obtain such prospective transferee’s orpurchaser’s agreement to the terms of this provision); (c) as required bylaw, regulation, subpoena, or other order; (d) to Bank’s regulators or asotherwise required in connection with Bank’s examination or audit; and (e) asBank considers appropriate in exercising remedies under this Agreement.  Confidential information does not includeinformation that either: (i) is in the public domain or in Bank’spossession when disclosed to Bank, or becomes part of the public domain afterdisclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bankdoes not know that the third party is prohibited from disclosing theinformation.

##  

## **12.10****                 Attorneys’ Fees,Costs and Expenses**.  In any action orproceeding between Borrower and Bank arising out of or relating to the LoanDocuments, Bank shall be entitled to recover its reasonable attorneys’ fees andother costs and expenses incurred, in addition to any other relief to which itmay be entitled.

##  

## **12.11****                 BorrowerLiability. **As detailed in Article 1,each Borrower has appointed Caliper as Agent for each Borrower for all purposeshereunder, including with respect to requesting Credit Extensionshereunder.  Each Borrower hereunder shallbe obligated, jointly and severally, to repay all Credit Extensions madehereunder, regardless of which Borrower actually receives said CreditExtension, as if each Borrower hereunder directly received all CreditExtensions.  Each Borrower waives any suretyshipdefenses available to it under the Code or any other applicable law.  Each Borrower waives any right to requireBank to: (i) proceed against any Borrower or any other person; (ii) proceedagainst or exhaust any security; or (iii) pursue any other remedy.  Bank may exercise or not exercise any rightor remedy it has against any Borrower or any security it holds (including theright to foreclose by judicial or non-judicial sale) without affecting anyBorrower’s liability.  Notwithstandingany other provision of this Agreement or other related document, each Borrowerirrevocably waives all rights that it may have at law or in equity (including,without limitation, any law subrogating Borrower to the rights of Bank underthis Agreement) to seek contribution, indemnification or any other form ofreimbursement from any other Borrower, or any other Person now or hereafterprimarily or secondarily liable for any of the Obligations, for any paymentmade by Borrower with respect to the Obligations in connection with thisAgreement or otherwise and all rights that it might have to benefit from, or toparticipate in, any security for the Obligations as a result of any paymentmade by Borrower with respect to the Obligations in connection with thisAgreement or otherwise.  Any agreementproviding for indemnification, reimbursement or any other arrangementprohibited under this Section shall be null and void.  If any payment is made to a Borrower incontravention of this Section, such Borrower shall hold such payment in trustfor Bank and such payment shall be promptly delivered to Bank for applicationto the Obligations, whether matured or unmatured.

##  

## **12.12****                 Right of Set Off**.   Borrower hereby grants to Bank, a lien,security interest and right of set off as security for all Obligations to Bank,whether now existing or hereafter arising upon and against all deposits,credits, collateral and property, now or hereafter in the possession, custody,safekeeping or control of Bank or any entity under the control of Bank (includinga Bank subsidiary) or in transit to any of them.  At any time after the occurrence and duringthe continuance of an Event of Default, without demand or notice, Bank may setoff the same or any part thereof and apply the same to any liability or obligationof Borrower even though unmatured and regardless of the adequacy of any othercollateral securing the Obligations.  ANYAND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECTTO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITSRIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OFBORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

##  

## **12.13****                 Amended and Restated Loan and SecurityAgreement**.  This Agreement amends and restates in itsentirety a certain Amended and Restated Loan and Security Agreement by andamong Borrower and Bank dated as of February 15, 2008, as amended.

##  

## **12.14****                 Confirmations andRatifications by Borrower**.  Borrowerhereby ratifies, confirms and reaffirms, all and singular, the terms anddisclosures contained in the Perfection Certificate, and acknowledges, confirmsand agrees that the disclosures and information Borrower provided to Bank ineach Perfection Certificate has not changed as of the date of this Agreement.

 

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**13****                                 ****DEFINITIONS**

##  

## **13.1****                        Definitions**.  As used in this Agreement, the followingterms have the following meanings:

##  

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

 

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

 

“**Advance**” or “**Advances**” means an advance (or advances) under the RevolvingLine.

 

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

 

“**Agent**” isdefined in Section 1.2(a).

 

“**Agreement**” isdefined in the preamble hereof.

 

“**Availability Amount**”is (a) the lesser of (i) the Revolving Line or (ii) theBorrowing Base minus (b) the amount of all outstanding Letters of Credit(including drawn but unreimbursed Letters of Credit plus an amount equal to theLetter of Credit Reserves), minus (c) the FX Reserve, and minus (d) theoutstanding principal balance of any Advances (including any amounts used forCash Management Services).

 

“**Bank**” isdefined in the preamble hereof.

 

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

 

“**Borrower**” isdefined in the preamble hereof.

 

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

 

“**Borrowing Base**”is (a) eighty percent (80%) of Eligible Accounts plus (b) the lesserof seventy percent (70%) of Borrower’s unrestricted cash at Bank or TwelveMillion Dollars ($12,000,000); provided, that on each of the first three(3) Business Days and each of the last three (3) Business Days ofeach fiscal quarter of the Borrower, the Borrowing Base is (a) eightypercent (80%) of Eligible Accounts plus (b) the lesser of ninety percent(90%) of Borrower’s unrestricted cash at Bank or Twelve Million Dollars($12,000,000), in each case as determined by Bank from Borrower’s most recentBorrowing Base Certificate, provided, however, that Bank maydecrease the foregoing percentages****and/or amounts****in its good faith business judgment based on events,conditions, contingencies, or risks which, as determined by Bank, may adverselyaffect the value of the Collateral.

 

“**Borrowing Base Certificate**”is that certain certificate included within each Transaction Report.

 

“**Borrowing Resolutions**”are, with respect to any Person, those resolutions adopted by such Person’sboard of directors or other appropriate body and delivered by such Person toBank approving the Loan Documents to which such Person is a party and thetransactions contemplated thereby, together with a certificate executed by itssecretary on behalf of such Person certifying that (a) such Person has theauthority to execute, deliver, and perform its obligations under each of theLoan Documents to which it is a party, (b) that attached to suchcertificate is a true, correct, and complete copy of the resolutions then infull force and effect authorizing and ratifying the execution, delivery, andperformance by such Person of the Loan Documents to which it is a party, (c) thename(s) of the Person(s) authorized to execute the Loan Documents onbehalf of such Person, together with a sample of the true signature(s) ofsuch Person(s), and (d) that Bank may conclusively rely on suchcertificate unless and until such Person shall have delivered to Bank a furthercertificate canceling or amending such prior certificate.

 

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

 

“**Caliper**” isdefined in the preamble hereof.

 

“**Caliper LTD**” isdefined in the preamble hereof.

 

“**Cash Equivalents andMarketable Securities**” means (a) marketable direct obligationsissued or unconditionally guaranteed by the United States or any agency or anyState thereof having maturities of not more than one (1) year from thedate of acquisition; (b) commercial paper maturing no more than one (1) yearafter its creation and having the highest rating from either Standard &Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) Bank’scertificates of deposit issued maturing no more than one (1) year afterissue, and (d) any marketable securities owned and held by Caliper in compliancewith Caliper’s approved investment guidelines as of the Effective Date (a copyof which has been delivered to Bank).

 

“**Cash Management Services**”is defined in Section 2.1.4.

 

“**Cash Management ServicesSublimit**”****is defined in Section 2.1.4.

 

“**Code**”  means (i)** **the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth of  Massachusetts; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth of  Massachusetts, the term “**Code**” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes on the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions and (ii) with respect to Canadian Borrower or any tangible assets located in Canada, the Personal Property Security Act (Ontario) as amended and as may be further amended and in effect from time to time; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Personal Property Security Act in effect in a provincial jurisdiction other than Ontario, the term “Code” shall mean the Personal Property Security Act as enacted and in effect in such other province solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

 

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

 

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

 

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

 

“**Communication**”is defined in Section 10.

 

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

 

“**Contingent Obligation**”is, for any Person, any direct or indirect liability, contingent or not, ofthat Person for (a) any indebtedness, lease, dividend, letter of credit orother obligation of another such as an obligation directly or indirectlyguaranteed, endorsed, co-made, discounted or sold with recourse by that Person,or for which that Person is directly or indirectly liable; (b) anyobligations for undrawn letters of credit for the account of that Person; and (c) allobligations from any interest rate, currency or commodity swap agreement,interest rate cap or collar agreement, or other agreement or arrangementdesignated to protect a Person against fluctuation in interest rates, currencyexchange rates or commodity prices; but “Contingent Obligation” does notinclude endorsements in the ordinary course of business.  The amount of a Contingent Obligation is thestated or determined amount of the primary obligation for which the ContingentObligation is made or, if not determinable, the maximum reasonably anticipatedliability for it determined by the Person in good faith; but the amount may notexceed the maximum of the obligations under any guarantee or other supportarrangement.

 

22

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

 

“**Credit Extension**”is any Advance, Letter of Credit, FX Forward Contract, amount utilized for CashManagement Services, or any other extension of credit by Bank for Borrower’sbenefit.

 

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

 

“**Default**” meansany event which with notice or passage of time or both, would constitute anEvent of Default.

 

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

 

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

 

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

 

“**Designated Deposit Account**”is Borrower’s deposit account, account number 3300540681, maintained with Bank.

 

“**Dollars***,*”**“**dollars**” and “**$**” each meanlawful money of the United States.

 

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

 

“**EBITDA**” shallmean (a) Net Income, plus (b) Interest Expense, plus (c) to theextent deducted in the calculation of Net Income, depreciation expense,amortization expense, restructuring expense and non-cash stock-basedcompensation expense, plus (d) income tax expense.

 

“**Effective Date**”is defined in the preamble hereof.

 

“**Eligible Accounts**”are Accounts which arise in the ordinary course of Borrower’s business thatmeet all Borrower’s representations and warranties in Section 5.3.  Bank reserves the right at any time and fromtime to time after the Effective Date upon notice to Borrower, to adjust any ofthe criteria set forth below and to establish new criteria in its good faithbusiness judgment.  Without limiting thefact that the determination of which Accounts are eligible for borrowing is amatter of Bank’s good faith judgment, the following (“Minimum EligibilityRequirements”) are the minimum requirements for an Account to be an EligibleAccount.  Unless Bank agrees otherwise inwriting, Eligible Accounts shall not include:

 
| (a)    |   | Accounts for which the Account Debtor has not been  invoiced or where goods or services have not yet been rendered to the Account  Debtor (sometimes called memo billings or pre-billings);                                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                        |
| (b)    |   | Accounts that the Account Debtor has not paid within  ninety (90) days of invoice date;                                                                                                                                     |
|   |   |                                                                                                                                                                                                                        |
| (c)    |   | Accounts owing from  an Account Debtor, fifty percent (50%) or more of whose Accounts have not  been paid within ninety (90) days of invoice date;                                                                          |
|   |   |                                                                                                                                                                                                                        |
| (d)    |   | Accounts billed and/or payable outside the United  States;                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                        |
| (e)    |   | Accounts with credit balances over ninety (90) days  from invoice date;                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                        |
| (f)    |   | Accounts owing from an Account Debtor, including  Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of  all Accounts, for the amounts that exceed that percentage, unless Bank  approves in writing; |

 

23

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| (g)    |   | Accounts subject to contractual arrangements between  Borrower and an Account Debtor where payments shall be scheduled or due  according to completion or fulfillment requirements where the Account Debtor  has a right of offset for damages suffered as a result of Borrower’s failure  to perform in accordance with the contract (sometimes called contracts  accounts receivable, progress billings, milestone billings, or fulfillment  contracts); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (h)    |   | Accounts owing from an Account Debtor the amount of  which may be subject to withholding based on the Account Debtor’s  satisfaction of Borrower’s complete performance (but only to the extent of  the amount withheld; sometimes called retainage billings);                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (i)    |   | Accounts owing from an Account Debtor which does not  have its principal place of business in the United States or Canada except  for Eligible Foreign Accounts;                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (j)    |   | Accounts owing from the United States or any  department, agency, or instrumentality thereof except for Accounts of the  United States if Borrower has assigned its payment rights to Bank and the  assignment has been acknowledged under the Federal Assignment of Claims Act  of 1940, as amended;                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (k)    |   | Accounts owing from an Account Debtor to the extent  that Borrower is indebted or obligated in any manner to the Account Debtor  (as creditor, lessor, supplier or otherwise - sometimes called “contra”  accounts, accounts payable, customer deposits or credit accounts), with the  exception of customary credits, adjustments and/or discounts given to an  Account Debtor by Borrower in the ordinary course of its business;                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (l)    |   | Accounts for demonstration or promotional equipment,  or in which goods are consigned, or sold on a “sale guaranteed”, “sale or  return”, “sale on approval”, “bill and hold”, or other terms if Account  Debtor’s payment may be conditional;                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (m)    |   | Accounts that represent non-trade receivables or  that are derived by means other than in the ordinary course of Borrower’s  business;                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (n)    |   | Accounts for which the Account Debtor is Borrower’s  Affiliate, officer, employee, or agent;                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (o)    |   | Accounts in which the Account Debtor disputes liability  or makes any claim (but only up to the disputed or claimed amount), or if the  Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent,  or goes out of business;                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (p)    |   | Accounts owing from an Account Debtor with respect  to which Borrower has received Deferred Revenue (but only to the extent of  such Deferred Revenue);                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (q)    |   | Accounts subject to chargebacks or other payment  deductions taken by an Account Debtor;                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (r)    |   | Accounts for which Bank in its good faith business  judgment determines collection to be doubtful; and                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (s)    |   | other Accounts Bank  deems ineligible in the exercise of its good faith business judgment.                                                                                                                                                                                                                                                                                                                                                                      |

 

“**Eligible Foreign Accounts**”are Accounts billed from the United States for which the Account Debtor does nothave its principal place of business in the United States or Canada but areotherwise Eligible Accounts that Bank approves in writing.

 

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

 

“**ERISA**” is theEmployee Retirement Income Security Act of 1974, and its regulations.

 

“**Event of Default**”is defined in Section 8.

 

24

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

 

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

 

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

 

“**FX Business Day**”is any day when (a) Bank’s Foreign Exchange Department is conducting itsnormal business and (b) the Foreign Currency being purchased or sold byBorrower is available to Bank from the entity from which Bank shall buy or sellsuch Foreign Currency.

 

“**FX Forward Contract**”****is defined in Section 2.1.3.

 

“**FX Reserve**”****is defined in Section 2.1.3.

 

“**GAAP**” means (i) withrespect to Caliper Ltd., generally accepted accounting principles set forth inthe opinions and pronouncements of the Canadian Institute of CharteredAccountants or in such other statements by such other Person as may be approvedby a significant segment of the accounting profession in Canada, which areapplicable to the circumstances as of the date of determination and (ii) withrespect to Borrower (other than Caliper Ltd.), generally accepted accountingprinciples set forth in the opinions and pronouncements of the AccountingPrinciples Board of the American Institute of Certified Public Accountants andstatements and pronouncements of the Financial Accounting Standards Board or insuch other statements by such other Person as may be approved by a significantsegment of the accounting profession, which are applicable to the circumstancesas of the date of determination.

 

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

 

“**Indebtedness**”is (a) indebtedness for borrowed money or the deferred price of propertyor services, such as reimbursement and other obligations for surety bonds andletters of credit, (b) obligations evidenced by notes, bonds, debenturesor similar instruments, (c) capital lease obligations, and (d) ContingentObligations.

 

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

 

“**Interest Expense**”means for any fiscal period, interest expense (whether cash or non-cash)determined in accordance with GAAP for the relevant period ending on such date,including, in any event, interest expense with respect to any Credit Extensionand other Indebtedness of Borrower and its Subsidiaries, if any, including,without limitation or duplication, all commissions, discounts, or relatedamortization and other fees and charges with respect to letters of credit andbankers’ acceptance financing and the net costs associated with interest rateswap, cap, and similar arrangements, and the interest portion of any deferredpayment obligation (including leases of all types).

 

“**Inventory**” isall “inventory” as defined in the Code in effect on the date hereof with suchadditions to such term as may hereafter be made, and includes withoutlimitation all merchandise, raw materials, parts, supplies, packing and shippingmaterials, work in process and finished products, including without limitationsuch inventory as is temporarily out of Borrower’s custody or possession or intransit and including any returned goods and any documents of titlerepresenting any of the above.

 

“**Investment**” isany beneficial ownership interest in any Person (including stock, partnershipinterest or other securities), and any loan, advance or capital contribution toany Person.

 

25

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

 

“**Letter of CreditApplication**” is defined in Section 2.1.2(a).

 

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

 

“**Lien**” is amortgage, lien, deed of trust, charge, pledge, security interest or otherencumbrance.

 

“**Loan Documents**”are, collectively, this Agreement, the Perfection Certificate, any note, ornotes or guaranties executed by Borrower or any guarantor, and any otherpresent or future agreement between Borrower any guarantor and/or for thebenefit of Bank in connection with this Agreement, all as amended, restated, orotherwise modified.

 

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

 

“**Minimum EligibilityRequirements**” is defined in the defined term “Eligible Accounts”.

 

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

 

“**Net Liquidity**”is, on any date of measurement, Borrower’s unrestricted cash at Bank minus(a) the amount of all outstanding Letters of Credit (including drawn butunreimbursed Letters of Credit plus an amount equal to the Letter of Credit Reserves),minus (b) the FX Reserve, and minus (c) the outstanding principalbalance of any Advances (including any amounts used for Cash ManagementServices).

 

“**NovaScreen**”is defined in the preamble hereof.

 

“**Obligations**”are Borrower’s obligation to pay when due any debts, principal, interest, BankExpenses and other amounts Borrower owes Bank now or later, whether under thisAgreement, the Loan Documents, or otherwise, including, without limitation, allobligations relating to letters of credit, cash management services, andforeign exchange contracts, if any, and including interest accruing afterInsolvency Proceedings begin and debts, liabilities, or obligations of Borrowerassigned to Bank, and the performance of Borrower’s duties under the Loan Documents.

 

“**Operating Documents**”are, for any Person, such Person’s formation documents, as certified with theSecretary of State of such Person’s state of formation on a date that is noearlier than thirty (30) days prior to the Effective Date, and, (a) if suchPerson is a corporation, its bylaws in current form, (b) if such Person isa limited liability company, its limited liability company agreement (orsimilar agreement), and (c) if such Person is a partnership, itspartnership agreement (or similar agreement), each of the foregoing with allcurrent amendments or modifications thereto.

 

“**Payment**” meansall checks, wire transfers and other items of payment received by Bank(including proceeds of Accounts and payment of all the Obligations in full) forcredit to Borrower’s outstanding Credit Extensions or, if the balance of theCredit Extensions has been reduced to zero, for credit to its Deposit Accounts.

 

“**Perfection Certificate**”is: (a) with respect to Caliper, that certain Perfection Certificate datedas of the date hereof, executed by Caliper in favor of Bank, (b) withrespect to NovaScreen, that certain Perfection Certificate dated as of the datehereof, executed by NovaScreen in favor of Bank, (c) with respect toXenogen, that certain Perfection Certificate dated as of the date hereof,executed by Xenogen in favor of Bank, (d) with respect to XenogenBiosciences, that certain Perfection Certificate dated as of the date hereof,executed by Xenogen Biosciences in favor of Bank; and (e) with respect toCaliper LTD, that certain Perfection Certificate dated as of the date hereof,executed by Caliper LTD in favor of Bank.

 

26

----

 

“**Permitted Indebtedness**”is:

 

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

 

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

 

(c)                                  SubordinatedDebt, if any;

 

(d)                                 unsecuredIndebtedness to trade creditors incurred in theordinary course of business;

 

(e)                                  Indebtednesssecured by Permitted Liens;

 

(f)                                    otherunsecured Indebtedness that does not, in the aggregate, exceed One MillionDollars ($1,000,000.00) outstanding at any time; and

 

(g)                                 extensions,refinancings, modifications, amendments and restatements of any items ofPermitted Indebtedness (a) through (f) above, provided that theprincipal amount thereof is not increased or the terms thereof are not modifiedto impose more burdensome terms upon Borrower or its Subsidiary, as the casemay be.

 

“**Permitted Investments**”are:

 

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

 

(b)                                 CashEquivalents and Marketable Securities;

 

(c)                                  Investmentsconsisting of (i) travel advances and employee relocation loans and otheremployee loans and advances in the ordinary course of business, and (ii) loansto employees, officers or directors relating to the purchase of equitysecurities of Borrower or its Subsidiaries pursuant to employee stock purchaseplans or agreements approved by Borrower’s Board of Directors; and

 

(d)                                 jointventures or strategic alliances in the ordinary course of Borrower’s businessconsisting of the non-exclusive licensing of technology, the development oftechnology or the providing of technical support, provided that any cashinvestments by Borrower do not exceed One Million Dollars ($1,000,000.00) inthe aggregate in any fiscal year.

 

“**Permitted Liens**”are:

 

(a)                                  Liensexisting on the Effective Date and shown on the Perfection Certificate orarising under this Agreement and the other Loan Documents;

 

(b)                                 Liensfor taxes, fees, assessments or other government charges or levies, either notdelinquent or being contested in good faith and for which Borrower maintainsadequate reserves on its Books, if they have no priority over any ofBank’s Liens;

 

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

 

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

 

(e)                                  leasesor subleases of real property granted in the ordinary course of business, andleases, subleases, licenses or sublicenses of property (other than realproperty or intellectual property) granted in the ordinary course of Borrower’sbusiness, if the leases, subleases, licenses and sublicenses do notprohibit granting Bank a security interest;

 

(f)                                    licensesof intellectual property granted to third parties in the ordinary course ofbusiness;

 

27

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(g)                                 Liensin favor of Sotax Corporation (“Sotax”) and US Bank National Association (“USBank”) in an amount not to exceed One Million Dollars ($1,000,000) plus accruedinterest thereon, deposited by Sotax with US Bank pursuant to a certainIndemnification Escrow Agreement dated as of November 10, 2008, by anamong Borrower, Sotax and US Bank.

 

(h)                                 Liensarising from judgments, decrees or attachments in circumstances notconstituting an Event of Default under Section 8.4 or 8.7.

 

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

 

“**Prime Rate**” isthe greater of (i) four and one-half of one percent (4.50%) and (ii) Bank’smost recently announced “prime rate,” even if it is not Bank’s lowest rate.

 

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

 

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

 

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

 

“**Requirement of Law**”is as to any Person, the organizational or governing documents of such Person,and any law (statutory or common), treaty, rule or regulation ordetermination of an arbitrator or a court or other Governmental Authority, in eachcase applicable to or binding upon such Person or any of its property or towhich such Person or any of its property is subject.

 

“**Reserves**”means, as of any date of determination after consultation with Borrower, suchamounts as Bank may from time to time establish and revise in good faith,reducing the amount of Advances, Letters of Credit and other financialaccommodations which would otherwise be available to Borrower under the lendingformulas:  (a) to reflect events,conditions, contingencies or risks which, as determined by Bank in good faith,do or may affect (i) the Collateral or any other property which issecurity for the Obligations or its value (including without limitation anyincrease in delinquencies of Accounts), (ii) the assets or business ofBorrower or any guarantor, or (iii) the security interests and otherrights of Bank in the Collateral (including the enforceability, perfection andpriority thereof); or (b) to reflect Bank’s good faith belief that anycollateral report or financial information furnished by or on behalf ofBorrower or any guarantor to Bank is or may have been incomplete, inaccurate ormisleading in any material respect; or (c) in respect of any state offacts which Bank determines in good faith constitutes an Event of Default ormay, with notice or passage of time or both, constitute an Event of Default.

 

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

 

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

 

“**Revolving Line MaturityDate**”****is November 30, 2010.

 

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

 

“**Settlement Date**”****is defined in Section 2.1.3.

 

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

 

28

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“**Subordination Agreement**”is any agreement, in form and substance acceptable to Bank in its solediscretion, as required by Bank in its sole discretion, subordinatingSubordinated Debt to the Bank.

 

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

 

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

 

“**Transaction Report**”is the Bank’s standard reporting package provided by Bank to Borrower, a formof which is attached as Exhibit C hereto.

 

“**Transfer**” isdefined in Section 7.1.

 

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

 

“**Unused Revolving LineFacility Fee**” is****defined in Section 2.4(d).

 

 “**Xenogen**” is defined in the preamble hereof.

 

“**Xenogen Biosciences**”is defined in the preamble hereof.

 

[Signature page follows.]

 

29

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**IN WITNESS WHEREOF**, the partieshereto have caused this Agreement to be executed as a sealed instrument underthe laws of the Commonwealth of Massachusetts as of the Effective Date.

 

BORROWER:

 

CALIPER LIFE SCIENCES, INC.

 
| By:    | /s/ Peter F. McAree           |   |
|--------|-------------------------------|--------|
| Name:  | Peter F. McAree               |
| Title: | Senior Vice President and CFO |

 

NOVASCREEN BIOSCIENCES CORPORATION

 
| By:    | /s/ Peter F. McAree     |   |
|--------|-------------------------|--------|
| Name:  | Peter F. McAree         |
| Title: | Vice President, Finance |

 

XENOGEN CORPORATION

 
| By:    | /s/ Peter F. McAree     |   |
|--------|-------------------------|--------|
| Name:  | Peter F. McAree         |
| Title: | Vice President, Finance |

 

XENOGEN BIOSCIENCES CORPORATION

 
| By:    | /s/ Peter F. McAree           |   |
|--------|-------------------------------|--------|
| Name:  | Peter F. McAree               |
| Title: | Senior Vice President and CFO |

 

CALIPER LIFE SCIENCES LTD.

 
| By:    | /s/ Peter F. McAree     |   |
|--------|-------------------------|--------|
| Name:  | Peter F. McAree         |
| Title: | Vice President, Finance |

 

BANK:

 

SILICON VALLEY BANK

 
| By     | /s/ Ryan Ravenscroft |   |
|--------|----------------------|--------|
| Name:  | Ryan Ravenscroft     |   |
| Title: | Vice President       |   |

 

 

Effective Date: March 6, 2009

 

 

[Signature page to Loanand Security Agreement]

 

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**EXHIBIT A**

** **

The Collateral consistsof all of Borrower’s right, title and interest in and to the following personalproperty:

 

All goods, Accounts (including health-carereceivables), Equipment, Inventory, contract rights or rights to payment ofmoney, leases, license agreements, franchise agreements, General Intangibles(except as provided below), commercial tort claims, documents, instruments(including any promissory notes), chattel paper (whether tangible orelectronic), cash, deposit accounts, certificates of deposit, fixtures, lettersof credit rights (whether or not the letter of credit is evidenced by awriting), securities, and all other investment property, supportingobligations, and financial assets, whether now owned or hereafter acquired, whereverlocated; and

 

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

 

Notwithstanding theforegoing, the Collateral does not include any of the following, whether nowowned or hereafter acquired (a) more than 65% of the presently existingand hereafter arising issued and outstanding shares of capital stock owned byBorrower of any Foreign Subsidiary (other than Caliper Ltd.) which sharesentitle the holder thereof to vote for directors or any other matter, (b) licenseagreements solely for the use of Intellectual Property of a third party, withrespect to which license Borrower is the licensee, (c) any copyrightrights, copyright applications, copyright registrations and like protections ineach work of authorship and derivative work, whether published or unpublished, (d) anypatents, patent applications and like protections, including improvements,divisions, continuations, renewals, reissues, extensions, andcontinuations-in-part of the same, trademarks, service marks and, to the extentpermitted under applicable law, any applications therefor, whether registeredor not, and the goodwill of the business of Borrower connected with andsymbolized thereby, (e) any know-how, operating manuals, trade secretrights, rights to unpatented inventions, and (f) any claims for damage byway of any past, present, or future infringement of any of the foregoing;provided, however, the Collateral shall include all Accounts, license androyalty fees and other revenues, proceeds, or income arising out of or relatingto any of the foregoing.

 

Pursuant to the terms ofa certain negative pledge arrangement with Bank, Borrower has agreed not toencumber any of its copyright rights, copyright applications, copyrightregistrations and like protections in each work of authorship and derivativework, whether published or unpublished, any patents, patent applications andlike protections, including improvements, divisions, continuations, renewals,reissues, extensions, and continuations-in-part of the same, trademarks,service marks and, to the extent permitted under applicable law, anyapplications therefor, whether registered or not, and the goodwill of thebusiness of Borrower connected with and symbolized thereby, know-how, operatingmanuals, trade secret rights, rights to unpatented inventions, and any claimsfor damage by way of any past, present, or future infringement of any of theforegoing, without Bank’s prior written consent.

 

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**EXHIBIT B**

** **

**COMPLIANCE CERTIFICATE**

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

 

The undersigned authorized officers of Caliper LifeSciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation,Xenogen Biosciences Corporation and Caliper Life Sciences, Ltd. (individuallyand collectively, jointly and severally, “Borrower”) certify that under theterms and conditions of the Loan and Security Agreement between Borrower andBank (the “Agreement”), (1) Borrower is in complete compliance for theperiod ending                              with all required covenants except as noted below, (2) there are no Eventsof Default, (3) all representations and warranties in the Agreement aretrue and correct in all material respects on this date except as noted below;provided, however, that such materiality qualifier shall not be applicable toany representations and warranties that already are qualified or modified by materialityin the text thereof; and provided, further that those representations andwarranties expressly referring to a specific date shall be true, accurate andcomplete in all material respects as of such date, (4) Borrower, and eachof its Subsidiaries, has timely filed all required tax returns and reports, andBorrower has timely paid all foreign, federal, state and local taxes,assessments, deposits and contributions owed by Borrower except as otherwisepermitted pursuant to the terms of Section 5.9 of the Agreement, and (5) noLiens have been levied or claims made against Borrower relating to unpaidemployee payroll or benefits of which Borrower has not previously providedwritten notification to Bank.  Attachedare the required documents supporting the certification.  The undersigned certifies that these areprepared in accordance with GAAP consistently applied from one period to thenext except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that noborrowings may be requested at any time or date of determination that Borroweris not in compliance with any of the terms of the Agreement, and thatcompliance is determined not just at the date this certificate isdelivered.  Capitalized terms used butnot otherwise defined herein shall have the meanings given them in theAgreement.

 

**Pleaseindicate compliance status by circling Yes/No under “Complies” column.**

 
| **Reporting Covenant**                                                                      | ** ** | **Required**                          | ** ** | **Complies**     |
|---------------------------------------------------------------------------------------------|------------|---------------------------------------|------------|------------------|
| ** **                                                                                  | ** ** | ** **                            | ** ** | ** **       |
| Quarterly  consolidated and consolidating financial statements with Compliance  Certificate |       | Quarterly  within 45 days             |       | Yes o  No o |
| Annual  consolidated and consolidating financial statement (CPA Audited) + CC               |       | FYE  within120 days                   |       | Yes o  No o |
| 10-Q,  10-K and 8-K                                                                         |       | Within  5 days after filing with SEC  |       | Yes o  No o |
| A/R & A/P Agings; Deferred Revenue report, cash report                             |       | Monthly  within 15 days               |       | Yes o  No o |
| Transaction Reports                                                                         |       | Weekly  and with each Advance request |       | Yes o  No o |
| Board approved  projections                                                                 |       | Annually, as revised                  |       | Yes o  No o |

 

Thefollowing intellectual property was registered after the Effective Date (if noregistrations, state “None”)

 
| **Financial Covenant**                       | ** ** | **Required**  | ** ** | **Actual** | ** ** | **Complies**                   | ** ** |
|----------------------------------------------|------------|---------------|------------|------------|------------|--------------------------------|------------|
| **Maintain at all times, tested quarterly:** | ** ** | ** **    | ** ** | ** ** | ** ** | ** **                     | ** ** |
| **Minimum Quick Ratio**                      | ** ** | **0.95:1.00** | ** ** | **:1.0**   | ** ** | **Yes****o****  No****o** | ** ** |
| **Minimum EBITDA minus Cap Ex***             | ** ** | **$**         | ** ** | **$**      | ** ** | **Yes****o****  No****o** | ** ** |

 

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                                                *See Section 6.9(b) ofthe Loan and Security Agreement

 

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                                                The followingfinancial covenant analyses and information set forth in Schedule 1 attachedhereto are true and accurate as of the date of this Certificate.

 

                                                The followingare the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptionsto note.”)

 

 
| CALIPER LIFE SCIENCES,  INC.        | ** **                     | **BANK  USE ONLY** |
|-------------------------------------|--------------------------------|--------------------|
|                                | ** **                     | ** **         |
| By                                  |                           | ** **         | Received by: | ** ** |
| Name:                               | Peter F. McAree                | ** **         | AUTHORIZED SIGNER |
| Title:                              | Senior Vice President  and CFO | ** **         | Date: | ** ** |
|                                | ** **                     | ** **         |
| NOVASCREEN BIOSCIENCES  CORPORATION | ** **                     | Verified:          | ** ** |
|                                | ** **                     | AUTHORIZED SIGNER  |
| By                                  |                           | ** **         | Date: | ** ** |
| Name:                               | Peter F. McAree                | ** **         | ** ** |
| Title:                              | Vice President, Finance        | ** **         | Compliance Status:                                                                                                                                          Yes o    No o |
|                                | ** **                     | ** **         |
| XENOGEN CORPORATION                 | ** **                     | ** **         |
|                                | ** **                     | ** **         |
| By                                  |                           | ** **         | ** ** |
| Name:                               | Peter F. McAree                | ** **         | ** ** |
| Title:                              | Vice President, Finance        | ** **         | ** ** |
|                                | ** **                     | ** **         |
| XENOGEN BIOSCIENCES  CORPORATION    | ** **                     | ** **         |
|                                | ** **                     | ** **         |
| By                                  |                           | ** **         | ** ** |
| Name:                               | Peter F. McAree                | ** **         | ** ** |
| Title:                              | Senior Vice President  and CFO | ** **         | ** ** |
|                                | ** **                     | ** **         |
| CALIPER LIFE SCIENCES  LTD.         | ** **                     | ** **         |
|                                | ** **                     | ** **         |
| By                                  |                           | ** **         | ** ** |
| Name:                               | Peter F. McAree                | ** **         | ** ** |
| Title:                              | Vice President, Finance        | ** **         | ** ** |
|                                     |                                |                    |  |  |  |  |  |

 

2

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**Schedule 1 to ComplianceCertificate**

 

**Financial Covenants of Borrower**

 

Dated:

 

Inthe event of a conflict between this Schedule and the Loan Agreement, the termsof the Loan Agreement shall control.

 

**I.**                                         **ADJUSTEDQUICK RATIO**(Section 6.9(a))

 

**Required:**Aratio of Quick Assets to Quick Liabilities of at least: 0.95****to 1.0 for the quarter ending March 31, 2009 and foreach fiscal quarter thereafter

 
| A.     |   | Aggregate  value of the unrestricted cash and Cash Equivalents and Marketable Securities  of Borrower                                                                                              |   | $      |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   |   |                                                                                                                                                                                               |   |   |
| B.     |   | Aggregate  value of the net billed accounts receivable and Unbilled Accounts of Borrower                                                                                                           |   | $      |
|   |   |                                                                                                                                                                                               |   |   |
| C.     |   | Quick  Assets (the sum of lines A and B)                                                                                                                                                           |   | $      |
|   |   |                                                                                                                                                                                               |   |   |
| D.     |   | Aggregate  value of Obligations to Bank                                                                                                                                                            |   | $      |
|   |   |                                                                                                                                                                                               |   |   |
| E.     |   | Aggregate  value of liabilities of Borrower (including all Indebtedness) that matures  within one (1) year and current portion of Subordinated Debt permitted  by Bank to be paid by Borrower |   | $      |
|   |   |                                                                                                                                                                                               |   |   |
| F      |   | Aggregate  value of (i) Deferred Revenue, (ii) real estate related  restructuring expenses, and (iii) customer deposits                                                             |   |   |
|   |   |                                                                                                                                                                                               |   |   |
| G.     |   | Quick  Liabilities (the sum of lines D and E minus line F)                                                                                                                                         |   | $      |
|   |   |                                                                                                                                                                                               |   |   |
| H.     |   | Adjusted  Quick Ratio (line C divided by line G)                                                                                                                                                   |   |   |

 

Isline H equal to or greater than 0.95 to 1.0

 

                                                oNo, not in compliance                                                                                                                                                                                                                                                             oYes, in compliance

 

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**II.**                                     **MINIMUM****EBITDA minus CAP-EX**(Section 6.9(b)

 

Required:Borrower’s EBITDAminus its capital expenditures, (“**EBITDA-Cap Ex**”)for the two (2) quarter period ending as of the last day of each quarter,shall be in an amount equal to: (i) losses not greater than (A) OneMillion Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31,2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for thequarter ending March 31, 2009; (C) Eight Million Seven HundredThousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) FiveMillion Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30,2009; (ii) Sixty Thousand Dollars ($60,000) for the quarter ending December 31,2009; (iii) losses not greater than (A) Two Million Dollars($2,000,000) for the quarter ending March 31, 2010; (B) Six MillionDollars ($6,000,000) for the quarter ending June 30, 2010; and (C) TwoMillion Dollars ($2,000,000) for the quarter ending September 30, 2010;and (iv) Three Million Eight Hundred Thousand Dollars ($3,800,000) for thequarter ending December 31, 2010.

 
| A.     | Net  Income                                                                                                                                     | $      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                            |   |
| B.     | Interest  Expense                                                                                                                               | $      |
|   |                                                                                                                                            |   |
| C.     | To  the extent included in the determination of Net Income:                                                                                     |   |
|   |                                                                                                                                            |   |
|   | 1.             Depreciation expense                                                 | $      |
|   |                                                                                                                                            |   |
|   | 2.             Amortization expense                                                 | $      |
|   |                                                                                                                                            |   |
|   | 3.             Non-cash stock-based compensation  expense and restructuring expense | $      |
|   |                                                                                                                                            |   |
| D.     | income  tax expense                                                                                                                             | $      |
|   |                                                                                                                                            |   |
| E.     | EBITDA  (line A, plus line B, plus line C.1, plus line C.2, plus line C.3, and plus  line D)                                                    | $      |
|   |                                                                                                                                            |   |
| F.     | capital  expenditures                                                                                                                           | $      |
|   |                                                                                                                                            |   |
| G.     | EBIDTA  minus CAP EX (line E minus line F)                                                                                                      | $      |

 

Isline G equal to or greater than $[                                                                                                                                                         ]?

 

                                                                                                oNo, not in compliance                                                                                                                                                                                                                                                             oYes, in compliance

 

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**EXHIBIT C**

 

**Transaction Report**

 

(Bank to provide)

 

1

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