Document:

Exhibit 10.3
 
AMENDED AND RESTATED
CHANGE OF CONTROL AGREEMENT
 

On April 30, 2008,
Ulric E. Cote (the “Employee”) and Conceptus, Inc., a Delaware corporation
(the “Company”) entered into a Change of Control Agreement (the “Prior
Agreement”), and the Company and the Employee wish to amend and restate the
Prior Agreement in its entirety, effective as of this 9th day of September,
2008 (the “Effective Date”), pursuant to the terms and conditions set forth in
this Amended and Restated Change of Control Agreement (the “Agreement”).

 

RECITALS
 

A.                                   It is expected that another company or
other entity may from time to time consider the possibility of acquiring the
Company or that a change of control may otherwise occur, with or without the
approval of the Company’s Board of Directors (the “Board”).  The Board recognizes that such consideration
can be a distraction to the Employee, an executive officer or director-level
employee of the Company, and can cause the Employee to consider alternative
employment opportunities.  The Board has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication and objectivity
of the Employee, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of the Company.

 

B.                                     The Board believes that it is in the best
interests of the Company and its stockholders to provide the Employee with an
incentive to continue his or her employment with the Company.

 

C.                                     The Board believes that it is imperative
to provide the Employee with certain benefits upon a Change of Control and,
under certain circumstances, upon termination of the Employee’s employment in
connection with a Change of Control, which benefits are intended to provide the
Employee with financial security and provide sufficient income and
encouragement to the Employee to remain with the Company notwithstanding the
possibility of a Change of Control.

 

D.                                    To accomplish the foregoing objectives,
the Board of Directors has directed the Company, upon execution of this
Agreement by the Employee, to agree to the terms provided in this Agreement.

 

E.                                      Certain capitalized terms used in the
Agreement are defined in Section 4 below.

 

AGREEMENT

 

In consideration of the
mutual covenants contained in this Agreement, and in consideration of the
continuing employment of Employee by the Company, the parties agree as follows:

 

 

1.                                       AT-WILL EMPLOYMENT.  The Company and the Employee acknowledge that
the Employee’s employment is and shall continue to be at-will, as defined under
applicable law.  If the Employee’s
employment terminates for any reason, including (without limitation) any
termination prior to a Change of Control, the Employee shall not be entitled to
any payments or benefits, other than as required under applicable law or as
provided by this Agreement, or as may otherwise be available in accordance with
the terms of the Company’s then existing employee plans and written policies in
effect at the time of termination.  The
terms of this Agreement shall terminate upon the earliest of (i) the date
on which Employee ceases to be employed as an executive officer or
director-level employee of the Company; (ii) the date that all obligations
of the parties hereunder have been satisfied, or (iii) two (2) years
after a Change of Control.  A termination
of the terms of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not affect the
payment or provision of compensation or benefits on account of a termination of
employment occurring prior to the termination of the terms of this Agreement.

 

2.                                       EQUITY AWARDS.

 

(a)                                  HOSTILE TAKEOVER.  Subject to Sections 5 and 6 below, in the
event of a Hostile Takeover and regardless of whether the Employee’s employment
with the Company is terminated in connection with the Hostile Takeover, each
stock option, stock appreciation right, restricted stock award, restricted
stock unit award or other equity-based award with respect to the Company’s
securities (collectively the “Equity Awards”) held by the Employee shall become
fully vested and/or immediately exercisable, as applicable, immediately prior
to the consummation of the transaction and with respect to the Equity Awards
which are in the form of stock options or stock appreciation rights, shall be
exercisable to the extent so vested in accordance with the provisions of the
agreement and plan pursuant to which such Equity Awards were granted.

 

(b)                                 CHANGE OF CONTROL.  Subject to Sections 5 and 6 below, in the
event of a Change of Control and regardless of whether the Employee’s
employment with the Company is terminated in connection with the Change of
Control, each Equity Award held by the Employee shall become vested and/or
immediately exercisable immediately prior to the consummation of the
transaction as to one hundred percent (100%) of the shares subject to such
Equity Award that have not otherwise vested as of such date.  The shares subject to each Equity Award that
remain unvested as of the effective date of the transaction shall thereafter
vest at the same rate (that is, the same number of shares shall vest during
each vesting period) that was in effect prior to the Change of Control, and
shall accordingly vest over a period that is one-half of the total vesting
period that would otherwise be then remaining under the terms of the agreement
pursuant to which each such Equity Award was granted, subject to any
acceleration based on the subsequent attainment of performance targets.

 

3.                                       CHANGE OF CONTROL.

 

(a)                                  TERMINATION FOLLOWING A CHANGE OF
CONTROL.  Subject to Sections 5 and 6
below, if the Employee’s employment with the Company is terminated at any 

 

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time within two (2) years
after a Change of Control, then the Employee shall be entitled to receive
severance benefits as follows:

 

(i)                                     VOLUNTARY RESIGNATION.  If the Employee voluntarily resigns from the
Company (other than as an Involuntary Termination (as defined below) or if the
Company terminates the Employee’s employment for Cause (as defined below)),
then the Employee shall not be entitled to receive severance payments under
this Agreement.  The Employee’s benefits
will be terminated under the Company’s then existing benefit plans and policies
in accordance with such plans and policies in effect on the date of termination
or as otherwise determined by the Board of Directors of the Company.

 

(ii)                                  INVOLUNTARY TERMINATION.  If the Employee’s employment terminates as a
result of an Involuntary Termination other than for Cause and the termination
constitutes a separation from service within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and the
regulations promulgated thereunder, including Treasury Regulation Section 1.409A-1(h) (a
“Separation from Service”), the Employee shall be entitled to receive the
following benefits:

 

(A)                              severance payments during the period from
the date of the Employee’s Separation from Service until the date 18 months
after the effective date of the termination (the “Severance Period”) equal to
the salary which the Employee was receiving immediately prior to the Change of
Control, which payments shall be paid during the Severance Period in accordance
with the Company’s standard payroll practices;

 

(B)                                monthly severance payments during the
Severance Period equal to 1/12th of the Employee’s “target bonus” (as defined
below) for the fiscal year in which the termination occurs (or the most recent
fiscal year for which a cash target bonus was determined if a cash target bonus
has not yet been determined for the fiscal year in which the termination
occurs).  For purposes of this Agreement,
the term “target bonus” shall mean a cash bonus equal to the Employee’s base
salary in effect immediately prior to the Change of Control multiplied by that
percentage of such base salary that is prescribed by the Company under its
Officer Incentive Plan as the percentage of such base salary payable to the
Employee as a cash bonus if the Company pays bonuses at one-hundred percent
(100%) of its operating plan;

 

(C)                                continuation of all health and life
insurance benefits through the end of the Severance Period substantially
identical to those to which the Employee was entitled immediately prior to the
termination, or to those being offered to officers of the Company, or a
successor corporation, if the Company’s benefit programs are changed during the
Severance Period;

 

(D)                               full and immediate vesting of each Equity
Award held by the Employee on the date of termination so that each such Equity
Award which is a stock option or a stock appreciation right shall be
exercisable in full and all shares subject to other Equity Awards shall be
fully vested on the termination date in accordance with the provisions of the
agreement and plan pursuant to which such Equity Awards were granted; and

 

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(E)                                 outplacement services with a total value
not to exceed $15,000, provided that such outplacement benefits shall end not
later than the last day of the second calendar year that begins after the date
of the Employee’s Separation from Service.

 

(iii)                               INVOLUNTARY TERMINATION FOR CAUSE.  If the Employee’s employment is terminated
for Cause, then the Employee shall not be entitled to receive severance
payments under this Agreement.  The
Employee’s benefits will be terminated under the Company’s then existing
benefit plans and policies in accordance with such plans and policies in effect
on the date of termination.

 

(b)                                 TERMINATION APART FROM A CHANGE OF
CONTROL.

 

(i)                                     In the event the Employee’s employment
terminates for any reason, either prior to the occurrence of a Change of
Control (other than an Anticipatory Termination) or after the two year period
following the effective date of a Change of Control, then the Employee shall
not be entitled to receive any severance payments under this Agreement.  The Employee’s benefits will be terminated
under the terms of the Company’s then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination or
as otherwise determined by the Board of Directors of the Company.

 

(ii)                                  Notwithstanding anything contained in
this Agreement to the contrary, if the Employee’s employment is terminated as a
result of an Anticipatory Termination, then (A) the Employee shall be
entitled to the severance payments and benefits described in Section 3(a)(ii) and
the Severance Period shall commence on the date of the Hostile Takeover or
Change of Control, (B) for purposes of determining the amount of the
severance benefits described in Sections 3(a)(ii)(A) and (B), the payments
shall be based on the salary which the Employee was receiving immediately prior
to the date of his or her termination of employment, and (C) in no event
shall this Section 3(b)(ii) create an extension of the exercise
period of an Equity Award which is a stock option or stock appreciation right
beyond the earlier of the latest date upon which the Equity Award could have
expired by its original terms under any circumstances or the tenth (10th) anniversary of the original date of grant of the
Equity Award.

 

(c)                                  CODE SECTION 409A.  Notwithstanding any provision to the contrary
in the Agreement, if the Employee is deemed by the Company at the time of his
or her Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the termination
benefits to which the Employee is entitled under this Agreement is required in
order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of
the Code, such portion of the Employee’s termination benefits shall not be
provided to the Employee prior to the earlier of (i) the expiration of the
six-month period measured from the date of the Employee’s Separation from
Service with the Company or (ii) the date of the Employee’s death.  Upon the first business day following the
expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral
period, all payments deferred pursuant to this Section 3(c) shall be
paid in a lump sum to the Employee (or the Employee’s estate or beneficiaries),
and any remaining payments due under the Agreement shall be paid as otherwise
provided herein.  For purposes of Section 409A
of the Code (including, without limitation, for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(iii)), the Employee’s right to receive 

 

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the installment payments
payable pursuant to this Agreement (the “Installment Payments”) shall be
treated as a right to receive a series of separate payments and, accordingly,
each Installment Payment shall at all times be considered a separate and
distinct payment.

 

4.                                       DEFINITION OF TERMS.  The following terms referred to in this Agreement
shall have the following meanings:

 

(a)                                  ANTICIPATORY TERMINATION.  “Anticipatory Termination” shall mean a
termination of the Employee’s employment prior to a Change of Control (other
than a termination for Cause) which is determined to (i) be at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Hostile Takeover or Change of Control and who
subsequently effectuates a Hostile Takeover or Change of Control  or (ii) have otherwise occurred in connection
with, or in anticipation of, a Hostile Takeover or Change of Control which
actually occurs, and in either (i) or (ii), such Hostile Takeover or
Change of Control constitutes a change in the ownership or effective control of
the Company or a change in the ownership of a substantial portion of the assets
of the Company, as described in Treasury Regulation Section 1.409A-3(i)(5).

 

(b)                                 CHANGE OF CONTROL.  “Change of Control” shall mean the occurrence
of any of the following events:

 

(i)                                     OWNERSHIP.  Any “Person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Act”) in one or more related transactions is or becomes the “Beneficial
Owner” (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s outstanding voting securities
without regard to whether the Board has approved such acquisition(s).

 

(ii)                                  MERGER/SALE OF ASSETS.  A merger or consolidation of the Company
whether or not approved by the Board of Directors of the Company, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets.

 

(iii)                               CHANGE IN BOARD COMPOSITION.  A change in the composition of the Board of
Directors of the Company, as a result of which fewer than a majority of the
directors are Incumbent Directors.  “Incumbent
Directors” shall mean directors who either (A) are directors of the
Company as of the Effective Date or (B) are elected, or nominated for
election, to the Board of Directors of the Company with the affirmative votes
of at least a majority of the Incumbent Directors at the time of such election
or nomination (but shall not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest relating to the
election of directors to the Company).

 

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(c)                                  CAUSE. 
“Cause” shall mean (i) gross negligence or willful misconduct in
the performance of the Employee’s duties to the Company where such gross
negligence or willful misconduct has resulted or is likely to result in
substantial and material damage to the Company or its subsidiaries, (ii) repeated
unexplained or unjustified absence from the Company, (iii) a material and
willful violation of any federal or state law; (iv) commission of any act
of fraud with respect to the Company; or (v) conviction of a felony or a
crime involving moral turpitude causing material harm to the standing and
reputation of the Company, in each case as determined in good faith by the
Board of Directors of the Company.

 

(d)                                 HOSTILE TAKEOVER.  “Hostile Takeover”  shall mean any transaction (or one or more
related transactions) pursuant to which any “Person” (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes the “Beneficial
Owner” (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s outstanding voting securities
without regard to whether the Board has approved such acquisition(s).

 

(e)                                  INVOLUNTARY TERMINATION.  “Involuntary Termination” means any
termination by the Company other than for Cause and the Employee’s voluntary
termination, upon 30 days prior written notice to the Company, following (i) any
reduction of the Employee’s base compensation, bonus opportunity or benefits
(other than equity or equity related benefits or reductions made in connection
with a general decrease in base salaries, bonus opportunities or benefits, as
applicable for most similarly situated executives of the successor
corporation); (ii) the Employee’s refusal to relocate to a location more
than 50 miles from the Company’s current location; (iii) any action by the
Company that results in a diminution in the Employee’s authority, duties and
responsibilities; (iv) a material breach by the Company of any of its
obligations hereunder and (v) any failure by a successor to assume and
perform the Company’s obligations hereunder.

 

5.                                       LIMITATION ON
PAYMENTS.  To the extent that any of the
payments or benefits provided for in this Agreement or otherwise to the
Employee (collectively the “Payments”) constitute “parachute payments” within
the meaning of Section 280G of the Code and, but for this Section 5,
would be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then such Payment shall be equal to the Reduced
Amount.  The “Reduced Amount” shall be
either (x) the largest portion of the Payments that would result in no
portion of the Payments being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payments, whichever amount,
after taking into account all applicable federal, state and local employment
taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in the Employee’s receipt, on an after-tax basis, of
the greater amount of the Payments notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. 
If a reduction in payments or benefits constituting “parachute payments”
is necessary so that the Payment equals the Reduced Amount, reduction shall
occur in the following order unless the Employee elects in writing a different
order (provided, however, that such election shall be subject to Company approval if
made on or after the effective date of the event that triggers the Payment):
reduction of cash payments; cancellation of accelerated vesting of Equity
Awards; reduction of employee benefits. 
In the event that acceleration of 

 

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vesting of Equity Awards is
to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of the Employee’s Equity Awards (i.e., earliest
granted Equity Awards cancelled last) unless the Employee elects in writing a
different order for cancellation.

 

The accounting firm engaged by the Company for
general audit purposes as of the day prior to the effective date of the Hostile
Takeover or Change of Control shall perform the foregoing calculations.  If the accounting firm so engaged by the
Company is serving as accountant or auditor for the individual, entity or group
effecting the Hostile Takeover or Change of Control, the Company shall appoint
a nationally recognized accounting firm to make the determinations required
hereunder.  The Company shall bear all
expenses with respect to the determinations by such accounting firm required to
be made hereunder.

 

The accounting firm
engaged to make the determinations hereunder shall provide its calculations,
together with detailed supporting documentation, to the Employee and the Company
within fifteen (15) calendar days after the date on which the Employee’s right
to a Payment is triggered (if requested at that time by the Employee or the
Company) or such other time as requested by the Employee or the Company.  If the accounting firm determines that no
Excise Tax is payable with respect to the Payments, either before or after the
application of the Reduced Amount, it shall furnish the Employee and the
Company with an opinion reasonably acceptable to the Employee that no Excise
Tax will be imposed with respect to such Payment.  Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon the
Employee and the Company.

 

6.                                       SUCCESSORS.  Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company’s business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession.  The terms of
this Agreement and all of the Employee’s rights hereunder shall inure to the
benefit of, and be enforceable by, the Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

 

7.                                       NOTICE. 
Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by U.S. registered or certified mail, return receipt
requested and postage prepaid.  Mailed
notices to the Employee shall be addressed to the Employee at the home address
which the Employee most recently communicated to the Company in writing.  In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.

 

8.                                       MISCELLANEOUS PROVISIONS.

 

(a)                                  NO DUTY TO MITIGATE.  The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor, except as otherwise provided
in this Agreement, shall any such payment be reduced by any earnings that the
Employee may receive from any other source.

 

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(b)                                 WAIVER. 
No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed
by the Employee and by an authorized officer of the Company (other than the
Employee).  No waiver by either party of
any breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.

 

(c)                                  WHOLE AGREEMENT.  No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.  This Agreement supersedes any agreement of
the same title or concerning similar subject matter dated prior to the date of
this Agreement, including, without limitation, the Prior Agreement, and by
execution of this Agreement both parties agree that any such predecessor
agreement shall be deemed null and void.

 

(d)                                 CHOICE OF LAW.  The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California without reference to conflict of laws provisions.

 

(e)                                  SEVERABILITY.  If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.

 

(f)                                    ARBITRATION.

 

(i)                                     Except as provided below, any controversy
or dispute which establishes a legal or equitable cause of action (“Claim”)
between the Employee and the Company arising out of, or relating to Employee’s
employment and/or this Agreement shall be submitted to final and binding
arbitration as the sole and exclusive remedy for such controversy or
dispute.   It is the parties’ intent that
issues of arbitrability of any dispute shall be decided by the Arbitrator.

 

(ii)                                  Regardless of whether the Federal
Arbitration Act would apply by operation of law, Employee and Company agree
that the right and duty to resolve any controversy or dispute by arbitration
shall be governed exclusively by the Federal Arbitration Act, as amended, and
arbitration shall take place according to the applicable rules of the
American Arbitration Association (“AAA”) in effect as of the date the demand
for arbitration is filed.  If for any
reason the Federal Arbitration Act is found not to apply or govern, this
agreement to arbitrate shall be governed by applicable state law.

 

(iii)                               The arbitration shall take place before
one arbitrator.  Such arbitrator shall be
provided through the AAA by mutual agreement of the parties to the arbitration;
provided that, absent such agreement, the arbitrator shall be selected in
accordance with the rules of AAA 

 

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then in effect. 
In either event, such arbitrator may not have any preexisting, direct or
indirect relationship with any party to the arbitration.

 

(iv)                              The arbitration shall be held at the
office of AAA nearest the Company facility to which Employee was assigned prior
to the dispute; provided, however, if such office is outside the state in which
Employee resides, Employee may cause the arbitration to be held within Employee’s
state of residence at a place mutually convenient to the parties thereto and arbitrator.

 

(v)                                 The costs of arbitration  to be paid shall not include any costs unique
to arbitration, nor exceed the amount such person would have had to pay in
court costs had the matter been pursued in court.  The Company shall be responsible for all other
cost payable to AAA in connection with the arbitration, including the cost and
fees of the arbitrator.  The arbitrator
shall make such orders with respect to attorneys’ fees and other costs and
expenses related to the arbitration as provided by applicable law.

 

(vi)                              The award or decision of the arbitrator
shall be rendered in writing; shall be final and binding on the parties; and
may be enforced by judgment or order of a court 
of competent jurisdiction.

 

(vii)                           The arbitrator shall have no authority to
amend or modify the terms and conditions of this Agreement, it being expressly
understood and agreed that the arbitrator shall have all such powers as a court
would have, sitting without a jury, to determine the validity and
enforceability of any of the provisions hereof.

 

(viii)                        Notwithstanding this Section (f),
the Company and the Employee shall have the right to seek from a court of
competent jurisdiction provisional non-monetary remedies including, but not
limited to, temporary restraining orders or preliminary injunctions before,
during or after arbitration to the extent such remedies are not available
through arbitration or cannot be obtained in a timely fashion through
arbitration.  The Company and the Employee
need not await the outcome of the arbitration before seeking provisional
remedies.  Seeking any such remedies
shall not be deemed to be a waiver of such person’s right to compel
arbitration.

 

(g)                                 LEGAL FEES AND EXPENSES.  The parties shall each bear their own
expenses, legal fees and other fees incurred in connection with this Agreement.

 

(h)                                 NO ASSIGNMENT OF BENEFITS.  The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or
other creditor’s process, and any action in violation of this subsection (h) shall
be void.

 

(i)                                     EMPLOYMENT TAXES.  All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

 

(j)                                     ASSIGNMENT BY COMPANY.  The Company may assign its rights under this
Agreement to an affiliate, and an affiliate may assign its rights under this
Agreement to another 

 

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affiliate of the Company
or to the Company; provided, however, that no assignment shall be made if the
net worth of the assignee is less than the net worth of the Company at the time
of assignment.  In the case of any such assignment,
the term “Company” when used in a section of this Agreement shall mean the
corporation that actually employs the Employee.

 

(k)                                  COUNTERPARTS.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

 

[Signature page follows]

 

10

 

IN WITNESS WHEREOF, each
of the parties has executed this Agreement, in the case of the Company by its
duly authorized officer, as of the day and year first above written.

 

 

	
  CONCEPTUS, INC.

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gregory Lichtwardt

  	
   

  	
  By:

  	
  /s/ Ulric E. Cote

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Executive Vice
  President

  	
   

  	
   

  	
  Sept 12, 2008

  

 

11EXHIBIT 10.1

 

SECOND AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (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 at
3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462 (“Bank”),
and (b) CALIPER LIFE SCIENCES, INC., a
Delaware corporation with a principal place of business located at 68 Elm
Street, Hopkinton, Massachusetts 01748 (“Caliper”), NOVASCREEN BIOSCIENCES CORPORATION, a Maryland corporation (“NovaScreen”), XENOGEN CORPORATION,
a Delaware corporation (“Xenogen”), XENOGEN BIOSCIENCES CORPORATION, an Ohio corporation (“Xenogen Biosciences”) and CALIPER LIFE
SCIENCES LTD., a company organized under the laws of Canada (“Caliper  Ltd.”)
(hereinafter, Caliper, NovaScreen, Xenogen, Xenogen Biosciences and Caliper
Ltd. are jointly and severally, individually and collectively, referred to as “Borrower”), amends and restates a certain Amended and
Restated Loan and Security Agreement by and among Borrower and Bank dated as of
February 15, 2008, as amended, and provides the terms on which Bank shall
lend to Borrower and Borrower shall repay Bank. The parties agree as follows:

 

1                                         ACCOUNTING AND OTHER TERMS

 

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

 

1.2                               Agented
Loan Arrangement.

 

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

 

(b)                                 Operation
of Loan Arrangement.

 

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

 

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

 

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

 

(c)                                  Credit
Extensions
Directly to Borrower.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2                                         LOAN AND TERMS OF PAYMENT

 

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

 

2.1.1                     Revolving
Advances.

 

(a)                                  Availability.  Subject to the terms and conditions of this
Agreement and to deduction of Reserves, Bank shall make Advances to Borrower up
to the Availability Amount.  Amounts borrowed under the Revolving Line may
be repaid, and prior to the Revolving Line Maturity Date, reborrowed, subject
to the applicable terms and conditions precedent herein.

 

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

 

2.1.2                     Letters of
Credit Sublimit.

 

(a)                                  As
part of the Revolving Line and subject to deduction of Reserves, Bank shall
issue or have issued Letters of Credit for Borrower’s account.  The face amount of outstanding Letters of
Credit (including 

 

2

 

drawn but unreimbursed
Letters of Credit and any Letter of Credit Reserve) may not exceed Five Million
Dollars ($5,000,000) inclusive of Credit Extensions relating to Sections 2.1.3
and 2.1.4.  Such aggregate amounts
utilized hereunder shall at all times reduce the amount otherwise available for
Advances under the Revolving Line.  If,
on the Revolving Line Maturity Date or after the occurrence and during the
continuance of an Event of Default  there are any
outstanding Letters of Credit, then on such date Borrower shall provide to Bank
cash collateral in an amount equal to 105% of the face amount of all such
Letters of Credit plus all interest, fees, and costs due or to become due in
connection therewith (as estimated by Bank in its good faith business
judgment), to secure all of the Obligations relating to said Letters of
Credit.  All Letters of Credit shall be
in form and substance acceptable to Bank in its sole discretion and shall be
subject to the terms and conditions of Bank’s standard Application and Letter
of Credit Agreement (the “Letter of Credit
Application”).  Borrower
agrees to execute any further documentation in connection with the Letters of
Credit as Bank may reasonably request.  Borrower further agrees to be bound by the regulations
and interpretations of the issuer of any Letters of Credit guarantied by Bank
and opened for Borrower’s account or by Bank’s interpretations of any Letter of
Credit issued by Bank for Borrower’s account, and Borrower understands and
agrees that Bank shall not be liable for any error, negligence, or mistake,
whether of omission or commission, in following Borrower’s instructions or
those contained in the Letters of Credit or any modifications, amendments, or
supplements thereto.

 

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

 

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

 

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

 

2.1.3                     Foreign
Exchange Sublimit.  As part of the
Revolving Line and subject to the deduction of Reserves, Borrower may enter
into foreign exchange contracts with Bank under which Borrower commits to
purchase from or sell to Bank a specific amount of Foreign Currency (each, a “FX Forward Contract”) on a specified date (the “Settlement Date”).  FX
Forward Contracts shall have a Settlement Date of at least one (1) FX
Business Day after the contract date and shall be subject to a reserve of ten
percent (10%) of each outstanding FX Forward Contract in a maximum aggregate
amount equal to Five Hundred Thousand Dollars ($500,000) (the “FX Reserve”).  The
aggregate amount of FX Forward Contracts at any one time plus Credit Extensions
made pursuant to Sections 2.1.2 and 2.1.4 may not exceed ten (10) times
the maximum aggregate amount of the FX Reserve. 
Any amounts needed to fully reimburse Bank will be treated as Advances
under the Revolving Line and will accrue interest at the interest rate
applicable to Advances.

 

2.1.4                     Cash
Management Services Sublimit. 
Borrower may use up to Five Million Dollars ($5,000,000) inclusive of
Credit Extensions relating to Sections 2.1.2 and 2.1.3 (the “Cash Management Services Sublimit”) of the Revolving Line
for Bank’s cash management services which may include merchant services, direct
deposit of payroll, business credit card, and check cashing services identified
in Bank’s various cash management services agreements (collectively, the “Cash Management Services”). 
The dollar amount of any Cash Management Services provided under this
sublimit will reduce the amount otherwise available under the Revolving
Line.  Any amounts used or reserved by
Borrower for any Cash Management Services will reduce the amount otherwise
available for Credit Extensions under the Revolving Line.  Any amounts Bank pays on behalf of Borrower
for any Cash Management Services will be treated as Advances under the
Revolving Line and will accrue interest at the interest rate applicable to
Advances.

 

3

 

2.2                               Overadvances. 
If, at any time the sum of (a) the outstanding amount of any
Advances (including any amounts used for Cash Management Services) plus (b) the
face amount of any outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve), plus (c) the
FX Reserve exceeds the lesser of either the Revolving Line or the Borrowing
Base (such excess amount being an “Overadvance”),
Borrower shall immediately pay to Bank in cash such Overadvance.  Without limiting Borrower’s obligation to
repay Bank any amount of the Overadvance, Borrower agrees to pay Bank interest
on the outstanding amount of any Overadvance, on demand, at the Default Rate.

 

2.3                               Payment
of Interest on the Credit Extensions.

 

(a)                                  Interest
Rate; Advances.  Subject to Section 2.3(b),
the principal amount outstanding under the Revolving Line shall accrue interest
at a floating per annum rate equal to: (x) if Borrower’s unrestricted cash
is equal to or greater than Twenty Million Dollars ($20,000,000.00), one
percentage point (1.00%) above the Prime Rate, or (y) if Borrower’s
unrestricted cash is less than Twenty Million Dollars ($20,000,000.00), two
percentage points (2.00%) above the Prime Rate, which interest shall be payable
monthly in accordance with Section 2.3(f) below.  Any changes to the applicable interest rate
due as set forth in (x) or (y) above, shall be effective on the first
day of the month following such event.

 

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

 

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

 

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

 

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

 

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

 

2.4                               Fees.  Borrower shall pay to Bank:

 

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

 

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

 

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

 

4

 

(d)                                 Unused
Revolving 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, in
an amount equal to one-half of one percent (0.50%) per annum of the average
unused portion of the Revolving Line, as determined by Bank.  The unused portion of the Revolving Line, for
the purposes of this calculation, shall include amounts reserved under the Cash
Management Services Sublimit for products provided and under the Foreign
Exchange Sublimit for FX Forward Contracts (as described in Section 2.1.3).  Borrower shall not
be entitled to any credit, rebate or repayment of any Unused Revolving Line
Facility Fee previously earned by Bank pursuant to this Section notwithstanding
any termination of the within Agreement, or suspension or termination of Bank’s
obligation to make loans and advances hereunder; and

 

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

 

2.5                               Withholding.  Payments received by Bank from Borrower
hereunder will be made free and clear of any withholding taxes.  Specifically, however, if at any time any
governmental authority, applicable law, regulation or international agreement
requires Borrower to make any such withholding or deduction from any such  payment or other sum payment hereunder to
Bank, Borrower hereby covenants and agrees that the amount due from Borrower
with respect to such payment or other sum payable hereunder will be increased
to the extent necessary to ensure that, after the making of such required
withholding or deduction, Bank receives a net sum equal to the sum which it
would have received had no withholding or deduction been required and Borrower
shall pay the full amount withheld or deducted to the relevant governmental
authority.  Borrower will, upon request,
furnish Bank with proof satisfactory to Bank indicating that Borrower has made
such withholding payment provided, however, that Borrower need not make any
withholding payment if the amount or validity of such withholding payment is
contested in good faith by appropriate and timely proceedings and as to which
payment in full is bonded or reserved against by Borrower.  The agreements and obligations of Borrower
contained in this Section 2.5 shall survive the termination of this
Agreement.

 

3                                         CONDITIONS OF LOANS

 

3.1                               Conditions
Precedent to Initial Credit Extension. 
Bank’s obligation to make the initial Credit Extension hereunder is
subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate, including,
without limitation:

 

(a)                                  Borrower
shall have delivered duly executed original signatures to the Loan Documents to
which it is a party;

 

(b)                                 Borrower
shall have delivered duly executed original signatures to the Control
Agreements;

 

(c)                                  Each
Borrower shall have delivered its Operating Documents and a good standing
certificate of such Borrower certified by the Secretary of State (or
equivalent) of the applicable state or jurisdiction of incorporation or organization
of such Borrower, dated as of a date no earlier than thirty (30) days prior to
the Effective Date;

 

(d)                                 Borrower
shall have delivered duly executed original signatures to the completed
Borrowing Resolutions for each Borrower;

 

(e)                                  Borrower
shall have delivered a Subordination Agreement duly executed by any holder of
Subordinated Debt, if any, as required by Bank, in favor of Bank;

 

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

 

(g)                                 Borrower
shall have delivered the Perfection Certificate(s) executed by each
Borrower;

 

5

 

(h)                                 Borrower
shall have delivered a landlord’s consent executed by each landlord of Borrower
as required by Bank, in favor of Bank;

 

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

 

(j)                                     Borrower
shall have delivered a legal opinion of Borrower’s counsel as to authority and
enforceability, dated as of the Effective Date together with the duly executed
original signatures thereto;

 

(k)                                  Borrower
shall have delivered evidence satisfactory to Bank that the insurance policies
required by Section 6.7 hereof are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements in favor of Bank; and

 

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

 

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

 

(a)                                  timely
receipt of an executed Transaction Report;

 

(b)                                 the
representations and warranties in Section 5 shall be true, accurate and
complete in all material respects on the date of the Transaction Report and on
the Funding Date of each Credit Extension; provided, however,
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the
text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true, accurate
and complete in all material respects as of such date, and no Default or Event
of Default shall have occurred and be continuing or result from the Credit
Extension.  Each Credit Extension is
Borrower’s representation and warranty on that date that the representations
and warranties in Section 5 remain true, accurate and complete in all
material respects; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material
respects as of such date; and

 

(c)                                  Bank
determines in good faith, based upon information available to it and in its
reasonable judgment, that there has not been any material impairment in the
general affairs, management, results of operation, financial condition or the
prospect of repayment of the Obligations, or any material adverse deviation by
Borrower from the most recent business plan of Borrower presented to and
accepted by Bank.

 

3.3                               Covenant
to Deliver.

 

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

 

3.4                               Procedures
for Borrowing.  Subject to the prior
satisfaction of all other applicable conditions to the making of an Advance set
forth in this Agreement, to obtain an Advance (other than Advances under Sections
2.1.2 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 on
the Funding Date of the Advance. 
Together with such notification, Borrower must promptly deliver to Bank
by electronic mail or facsimile a completed Transaction Report executed by a
Responsible Officer or his or her designee. 
Bank shall credit Advances to the Designated Deposit Account.  Bank may make Advances under this Agreement
based on instructions from a Responsible Officer or his or her designee or
without instructions if the Advances are necessary to meet Obligations which
have become due.  Bank may rely on any
telephone notice given by a person whom Bank believes is a Responsible Officer
or designee.

 

4                                         CREATION OF SECURITY
INTEREST

 

4.1                               Grant
of Security Interest.  Borrower
hereby grants Bank, to secure the payment and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Bank, the
Collateral, 

 

6

 

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

 

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

 

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

 

5                                         REPRESENTATIONS AND
WARRANTIES

 

Borrower
represents and warrants as follows at all times unless expressly provided
below:

 

5.1                               Due Organization; Authorization; Power and Authority.  Borrower and each of its Subsidiaries are
duly existing and in good standing as Registered Organizations in their
respective jurisdictions of formation and are qualified and licensed to do
business and are in good standing in any jurisdiction in which the conduct of
their business or their ownership of property requires that they be qualified
except where the failure to do so could not reasonably be expected to have a
material adverse effect on Borrower’s business. 
In connection with this Agreement, Borrower has delivered to Bank a
completed certificate substantially in the form provided by Bank to Borrower,
entitled “Perfection Certificate”. 
Borrower represents and warrants to Bank that (a) Borrower’s exact
legal name is that indicated on the Perfection Certificate and on the signature
page hereof; (b) Borrower is an organization of the type and is
organized in the jurisdiction set forth in the Perfection Certificate; (c) the
Perfection Certificate accurately sets forth Borrower’s organizational
identification number or accurately states that Borrower has none; (d) the
Perfection Certificate accurately sets forth Borrower’s place of business, or,
if more than one, its chief executive office as well as Borrower’s mailing
address (if different than its chief executive office); (e) Borrower (and
each of its predecessors) has not, in the past five (5) years, changed its
jurisdiction of formation, organizational structure or type, or any
organizational number assigned by its jurisdiction; and (f) all other
information set forth on the Perfection Certificate pertaining to Borrower and
each of its Subsidiaries is accurate and complete in all material
respects.  If Borrower is not now a
Registered Organization but later becomes one, Borrower shall promptly notify
Bank of such occurrence and provide Bank with Borrower’s organizational
identification number.

 

The execution, delivery
and performance by Borrower of the Loan Documents to which it is a party have
been duly authorized, and do not (i) conflict with any of Borrower’s
organizational documents, (ii) contravene, conflict with, constitute a
default 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 any
of its Subsidiaries or any of their property or assets may be bound or
affected, (iv) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority
(except such Governmental Approvals which have already been obtained and are in
full force and effect) or (v) constitute an event of default under any
material agreement by which Borrower is bound. 
Borrower is not in default under any agreement to which it is a party or
by which Borrower or any of its Subsidiaries may be bound in which the default
could reasonably be expected to have a material adverse effect on Borrower’s
business.

 

5.2                               Collateral.  Borrower has good title to, has rights in, and
the power to transfer each item of Collateral upon which it purports to grant a
Lien hereunder, free and clear of any and all Liens except Permitted
Liens.  Borrower has no deposit accounts
other than the deposit accounts with Bank and deposit accounts described in the
Perfection Certificate delivered to Bank in connection herewith  or of which Borrower has given Bank notice  

 

7

 

and taken such actions as are necessary to give Bank a
perfected security interest therein.  The
Accounts are bona fide, existing obligations of the Account Debtors.

 

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

 

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

 

Borrower is the sole owner of its intellectual
property, except for (i) licenses granted to its customers and/or
licensees in the ordinary course of business, and (ii) certain patents
that are jointly owned by the Borrower and other third parties who have
collaborated with the Borrower on technical development projects.  As of the date hereof, each patent is valid
and enforceable and no part of the intellectual property has been judged
invalid or unenforceable, in whole or in part, and to the best of Borrower’s
knowledge, no claim has been made that any part of the intellectual property
violates 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 other
agreement with respect to which Borrower is the licensee (a) that
prohibits or otherwise restricts Borrower from granting a security interest in
Borrower’s interest in such license or agreement or any other property, or (b) for
which a default under or termination of could interfere with the Bank’s right
to sell any Collateral.  Borrower shall
provide written notice to Bank within ten (10) days of entering or
becoming bound by any such material license or agreement (other than
over-the-counter software that is commercially available to the public).  Borrower shall take such steps as Bank
requests to obtain the consent of, or waiver by, any person whose consent or
waiver is necessary for (x) all such licenses or contract rights to be
deemed “Collateral” and for Bank to have a security interest in it that might
otherwise be restricted or prohibited by law or by the terms of any such
license or agreement (such consent or authorization may include a licensor’s
agreement to a contingent assignment of the license to Bank if Bank determines
that is necessary in its good faith judgment), whether now existing or entered
into in the future, and (y) Bank to have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with
Bank’s rights and remedies under this Agreement and the other Loan Documents.

 

5.3                               Accounts
Receivable.

 

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

 

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

 

5.4                               Litigation.  Other than as disclosed on the Perfection
Certificate, as of the date hereof, there are no actions or proceedings pending
or, to the knowledge of the Responsible Officers, threatened in writing by or
against Borrower or any of its Subsidiaries involving more than One Million
Dollars ($1,000,000.00).

 

5.5                               No Material Deviation/Deterioration in
Financial Condition.  All
consolidated financial statements for Borrower and any of its Subsidiaries
delivered to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of
operations.  There has not been 

 

8

 

any material deterioration in Borrower’s consolidated
financial condition since the date of the most recent financial statements
submitted to Bank.

 

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

 

5.7                               Regulatory
Compliance.  Borrower is not an “investment
company” or a company “controlled” by an “investment company” under the
Investment Company Act of 1940, as amended. 
Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations T and U of the Federal Reserve Board
of Governors).  No Borrower nor any
Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or
a “subsidiary company” of a “holding company” as each term is defined and used
in the Public Utility Holding Company Act of 2005.  Borrower has complied in all material
respects with the Federal Fair Labor Standards Act.  Borrower has not violated any laws,
ordinances or rules, the violation of which could reasonably be expected to
have a material adverse effect on its business. 
None of Borrower’s or any of its Subsidiaries’ properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower’s
knowledge, by previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally.  Borrower and each of its Subsidiaries have
obtained all consents, approvals and authorizations of, made all declarations
or filings with, and given all notices to, all Government Authorities that are
necessary to continue their respective businesses as currently conducted.

 

5.8                               Subsidiaries;
Investments.  Other than as set forth
in the Perfection Certificate, as of the date hereof, Borrower does not own any
stock, partnership interest or other equity securities except for Permitted
Investments.

 

5.9                               Tax
Returns and Payments; Pension Contributions.  Borrower and its Subsidiaries have timely
filed 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 contested
taxes, provided that Borrower (a) in good faith contests its obligation to
pay the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (b) notifies Bank in writing of the commencement of, and any
material development in, the proceedings, (c) posts bonds or takes any
other steps required to prevent the governmental authority levying such contested
taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien”.  Borrower is unaware of any claims
or adjustments proposed for any of Borrower’s prior tax years which could
result in additional taxes becoming due and payable by Borrower in the
aggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000).  Borrower has paid all amounts necessary to
fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms, and Borrower has not withdrawn from participation
in, and has not permitted partial or complete termination of, or permitted the
occurrence of any other event with respect to, any such plan which could
reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any
other governmental agency.

 

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

 

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

 

6                                         AFFIRMATIVE COVENANTS

 

Borrower shall do all of
the following:

 

6.1                               Government
Compliance.  Maintain its and all its
Subsidiaries’ legal existence and good standing in their respective
jurisdictions of formation and maintain qualification in each jurisdiction in
which the 

 

9

 

failure to so qualify would reasonably be expected to
have a material adverse effect on Borrower’s business or operations.  Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, the noncompliance with which could have a material adverse effect on
Borrower’s business.

 

6.2                               Financial
Statements, Reports, Certificates.

 

(a)                                  Borrower
shall 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 receivable
agings, aged by invoice date, (B) monthly accounts payable agings, aged by
invoice date, and outstanding or held check registers, if any, and (C) monthly
reconciliations of accounts receivable agings (aged by invoice date),
transaction reports, Deferred Revenue report, monthly cash report and general
ledger;

 

(iii) within
forty-five (45) days after the end of each quarter a Compliance Certificate
signed 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 this
Agreement, and setting forth calculations showing compliance with the financial
covenants set forth in this Agreement and such other information as Bank shall
reasonably request, including, without limitation, a statement that at the end
of such quarter there were no held checks;

 

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

 

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

 

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

 

(b)                                 In the event that Borrower is or becomes
subject to the reporting requirements under the Securities Exchange Act of
1934, 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 link
thereto on Borrower’s or another website on the Internet.

 

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

 

6.3                               Accounts
Receivable.

 

(a)                                  Schedules
and Documents Relating to Accounts.  Borrower shall deliver to Bank transaction
reports and schedules of collections, as provided in Section 6.2, on Bank’s
standard forms; provided, however, that Borrower’s failure to
execute and deliver the same shall not affect or limit Bank’s Lien and other
rights in all of Borrower’s Accounts, nor shall Bank’s failure to advance or
lend against a specific Account affect or limit Bank’s Lien and other rights
therein.  If requested by Bank, Borrower
shall furnish Bank with copies (or, at Bank’s request, originals) of all
contracts, orders, invoices, and other similar documents, and all shipping
instructions, delivery receipts, bills of lading, and other evidence of delivery,
for any goods the sale or disposition of 

 

10

 

which
gave rise to such Accounts.  In addition,
Borrower shall deliver to Bank, on its request, the originals of all
instruments, chattel paper, security agreements, guarantees and other documents
and 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 all
disputes 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 settle
any Account for less than payment in full, or agree to do any of the foregoing
so long as (i) Borrower does so in good faith, in a commercially
reasonable manner, in the ordinary course of business, in arm’s-length
transactions, and reports the same to Bank in the regular reports provided to
Bank; (ii) no Default or Event of Default has occurred and is continuing;
and (iii) after taking into account all such discounts, settlements and
forgiveness, the total outstanding Advances will not exceed the Availability
Amount.

 

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

 

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

 

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

 

(f)                                    No
Liability. 
Bank shall not be responsible or liable for any shortage or discrepancy
in, damage to, or loss or destruction of, any goods, the sale or other
disposition 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, collection
or failure to collect any Account, or for settling any Account in good faith
for less than the full amount thereof, nor shall Bank be deemed to be
responsible for any of Borrower’s obligations under any contract or agreement
giving rise to an Account.  Nothing
herein shall, however, relieve Bank from liability for its own gross negligence
or willful misconduct.

 

6.4                               Remittance
of Proceeds.  Except as otherwise
provided in Section 6.3(c), deliver, in kind, all proceeds arising from
the disposition of any Collateral to Bank in the original form in which
received by Borrower not later than the following Business Day after receipt by
Borrower, to be applied to the Obligations pursuant to the terms of Section 9.4
hereof; provided that, if no Default or Event of Default has occurred
and is continuing, Borrower shall not be obligated to remit to Bank the
proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower
in good faith in an arm’s length transaction for an aggregate purchase price of
Twenty Five Thousand Dollars ($25,000) or
less (for all such transactions in any fiscal year).  Borrower agrees that it will not commingle
proceeds of Collateral (other than proceeds from Accounts or proceeds from
Inventory sales in the ordinary course of business, in each case remitted to
Bank in accordance with Section 6.3(c) hereof) with any of Borrower’s
other funds or property, but will hold such proceeds separate and apart from
such other funds and property and in an express trust for Bank.  Nothing in this Section limits the
restrictions on disposition of Collateral set forth elsewhere in this
Agreement.

 

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

 

11

 

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

 

6.6                               Access
to Collateral; Books and Records.  At
reasonable times, on one (1) Business Day’s notice (provided no notice is
required if an Event of Default has occurred and is continuing), Bank, or its
agents, shall have the right, on a semi-annual basis (or more frequently after
the occurrence of an Event of Default) to inspect the Collateral and the right
to audit and copy Borrower’s Books.  The
foregoing inspections and audits shall be at Borrower’s expense, and the charge
therefor shall be $750 per person per day (or such higher amount as shall
represent Bank’s then-current standard charge for the same), plus reasonable
out-of-pocket expenses.  In the event
Borrower and Bank schedule an audit more than ten (10) days in advance,
and Borrower cancels or seeks to reschedules the audit with less than ten (10) days
written notice to Bank, then (without limiting any of Bank’s rights or
remedies), Borrower shall pay Bank a fee of $1,000 plus any out-of-pocket
expenses incurred by Bank to compensate Bank for the anticipated costs and
expenses of the cancellation or rescheduling.

 

6.7                               Insurance.  Keep its
business and the Collateral insured for risks and in amounts standard for
companies in Borrower’s industry and location and as Bank may reasonably
request.  Insurance policies shall be in
a form, with companies, and in amounts that are satisfactory to Bank.  All property policies shall have a lender’s
loss payable endorsement showing Bank as the sole lender loss payee and waive
subrogation against Bank, and all liability policies shall show, or have
endorsements showing, Bank as an additional insured.  All policies (or the loss payable and
additional insured endorsements) shall provide that the insurer must give Bank
at least thirty (30) days notice before canceling, amending, or declining to
renew its policy.  At Bank’s request,
Borrower shall deliver certified copies of policies and evidence of all premium
payments.  Proceeds payable under any
policy shall, at Bank’s option, be payable to Bank on account of the
Obligations.  Notwithstanding the
foregoing, (a) so long as no Event of Default has occurred and is
continuing, Borrower shall have the option of applying the proceeds of any
casualty policy up to Two Hundred Fifty Thousand Dollars ($250,000), in the
aggregate, toward the replacement or repair of destroyed or damaged property;
provided that any such replaced or repaired property (i) shall be of equal
or like value as the replaced or repaired Collateral and (ii) shall be
deemed Collateral in which Bank has been granted a first priority security
interest, and (b) after the occurrence and during the continuance of an
Event of Default, all proceeds payable under such casualty policy shall, at the
option of Bank, be payable to Bank on account of the Obligations.  If Borrower fails to obtain insurance as
required under this Section 6.7 or to pay any amount or furnish any
required proof of payment to third persons and Bank, Bank may make all or part
of such payment or obtain such insurance policies required in this Section 6.7,
and take any action under the policies Bank deems prudent.

 

6.8                               Operating
Accounts.

 

(a)                                  Maintain
(i) its and its Subsidiaries’ primary depository, operating and securities
accounts with Bank and Bank’s affiliates, with all excess funds maintained at
or invested through Bank or an affiliate of Bank  which
accounts shall represent at least seventy-five percent (75%) of the dollar
value of Borrower’s and such Subsidiaries accounts at all financial
institutions; and (ii) at all times, maintain balance of not less than
Three Million Dollars ($3,000,000) in a designated deposit account at Bank.   Any
guarantor shall maintain its primary depository, operating and securities
accounts with Bank, or SVB Securities.

 

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

 

6.9                               Financial
Covenants.

 

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

 

(a)                                  Adjusted
Quick Ratio.  A ratio of Quick Assets
to Quick Liabilities of at least 0.95  to 1.0 for the
quarter ending December 31, 2008 and for each fiscal quarter thereafter.

 

12

 

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

 

6.10                        Protection
and Registration of Intellectual Property Rights.  Borrower shall: (a) protect, defend and
maintain the validity and enforceability of its intellectual property in a
manner consistent with prudent business practices; (b) promptly advise
Bank in writing of infringements of its intellectual property; and (c) not
allow any intellectual property material to Borrower’s business to be
abandoned, forfeited or dedicated to the public without Bank’s written consent.

 

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

 

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

 

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 or
acquisition of such new Subsidiary and, at the request of Bank, take all such
action as may be reasonably required by Bank to cause each such Subsidiary to
become a co-Borrower or guarantor under the Loan Documents and grant a
continuing pledge and security interest in and to the assets of such Subsidiary
(substantially as described on Exhibit A hereto); and, at the request of
Bank, Borrower shall grant and pledge to Bank a perfected security interest in
the stock, units or other evidence of ownership of each such Subsidiary.

 

7                                         NEGATIVE COVENANTS

 

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

 

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

 

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

 

13

 

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

 

7.3                               Mergers
or Acquisitions.  Merge or
consolidate, or permit any of its Subsidiaries to merge or consolidate, with
any other Person, or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person.  A Subsidiary may merge or consolidate into
another Subsidiary or into Borrower.

 

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

 

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

 

7.6                               Maintenance
of Collateral Accounts.  Maintain any
Collateral 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 Permitted
Investments, or permit any of its Subsidiaries to do so; or (b) pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock provided that (i) Borrower may convert any of its
convertible securities into other securities pursuant to the terms of such
convertible securities or otherwise in exchange thereof, (ii) Borrower may
pay dividends solely in common stock; and (iii) Borrower may repurchase
the stock of former employees or consultants pursuant to stock repurchase
agreements so long as an Event of Default does not exist at the time of such
repurchase and would not exist after giving effect to such repurchase, provided
such repurchase does not exceed in the aggregate of Fifty Thousand Dollars
($50,000) per fiscal year.

 

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

 

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

 

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

 

8                                         EVENTS OF DEFAULT

 

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

 

14

 

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

 

8.2                               Covenant
Default.

 

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

 

8.3                               Material
Adverse Change.  A Material Adverse
Change occurs;

 

8.4                               Attachment.  (a) Any material portion of Borrower’s
assets is attached, seized, levied on, or comes into possession of a trustee or
receiver and the attachment, seizure or levy is not removed in ten (10) days;
(b) the service of process upon Bank (or Bank’s Affiliate) seeking to attach,
by trustee or similar process, any funds of Borrower, or of any entity under
control of Borrower (including a Subsidiary) on deposit with Bank; (c) Borrower
is enjoined, restrained, or prevented by court order from conducting a material
part of its business; (d) a judgment or other claim in excess of One
Million Dollars ($1,000,000) becomes a Lien on any of Borrower’s assets; or (e) a
notice of lien, levy, or assessment is filed against any of Borrower’s assets
by any government agency and not paid within ten (10) days after Borrower
receives notice.  These are not Events of
Default if stayed or if a bond is posted pending contest by Borrower (but no
Credit Extensions shall be made during the cure period);

 

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

 

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

 

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

 

8.8                               Misrepresentations.  Borrower or any Person acting for Borrower
makes any representation, warranty, or other statement now or later in this
Agreement, any Loan Document or in any writing delivered to Bank or to induce
Bank to enter 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                               Subordinated
Debt.  A default or breach occurs
under any agreement between Borrower and any creditor of Borrower that signed a
subordination, intercreditor, or other similar agreement with Bank, or any
creditor that has signed such an agreement with Bank breaches any terms of such
agreement.

 

15

 

9                                         BANK’S RIGHTS AND REMEDIES

 

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

 

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

 

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

 

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

 

(d)                                 terminate
any FX Forward Contracts;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

hereunder.  Bank’s
foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights
and powers, coupled with an interest, are irrevocable until all Obligations
have been fully repaid and performed and Bank’s obligation to provide Credit
Extensions terminates.

 

9.3                               Protective
Payments.  If Borrower fails to
obtain the insurance called for by Section 6.7 or fails to pay any premium
thereon or fails to pay any other amount which Borrower is obligated to pay
under this Agreement or any other Loan Document, Bank may obtain such insurance
or make such payment, and all amounts so paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then highest applicable
rate, and secured by the Collateral. 
Bank will make reasonable efforts to provide Borrower with notice of
Bank obtaining such insurance at the time it is obtained or within a reasonable
time thereafter.  No payments by Bank are
deemed an agreement to make similar payments in the future or Bank’s waiver of
any Event of Default.

 

9.4                               Application
of Payments and Proceeds.  Unless an
Event 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 account
balances, payments, or proceeds realized as the result of any collection of
Accounts or other disposition of the Collateral, first, to Bank Expenses,
including without limitation, the reasonable costs, expenses, liabilities,
obligations and attorneys’ fees incurred by Bank in the exercise of its rights
under this Agreement; second, to the interest due upon any of the Obligations;
and third, to the principal of the Obligations and any applicable fees and
other charges, in such order as Bank shall determine in its sole
discretion.  Any surplus shall be paid to
Borrower or other Persons legally entitled thereto; Borrower shall remain
liable to Bank for any deficiency.  If an
Event of Default has occurred and is continuing, Bank may apply any funds in
its possession, whether from Borrower account balances, payments, proceeds
realized as the result of any collection of Accounts or other disposition of
the Collateral, or otherwise, to the Obligations in such order as Bank shall
determine in its sole discretion.  Any
surplus shall be paid to Borrower or 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 credit
transaction with any purchaser at any sale of Collateral, Bank shall have the
option, exercisable at any time, of either reducing the Obligations by the
principal amount of the purchase price or deferring the reduction of the
Obligations until the actual receipt by Bank of cash therefor.

 

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

 

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

 

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

 

10                                  NOTICES

 

All notices, consents,
requests, approvals, demands, or other communication (collectively, “Communication”), other than Advance requests made pursuant
to Section 3.4, by any party to this Agreement or any other Loan Document
must be in writing and be delivered or sent by facsimile at the addresses or
facsimile numbers listed below.  Bank or
Borrower may change its notice address by giving the other party written notice
thereof.  Each such Communication shall
be deemed to have been validly served, given, or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the
U.S. mail, registered or certified mail, return receipt requested, with proper
postage prepaid; (b) upon transmission, when sent by facsimile or
electronic mail transmission (with such facsimile or electronic mail promptly
confirmed by delivery of a copy by personal delivery or United States mail as
otherwise provided in this Section 10); (c) one (1) Business Day
after deposit with a 

 

17

 

reputable
overnight courier with all charges prepaid; or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated below.  Advance requests made pursuant to Section 3.4
must be in writing and may be in the form of electronic mail, delivered to Bank
by Borrower at the e-mail address of Bank provided below and shall be deemed to
have been validly served, given, or delivered when sent (with such electronic
mail promptly confirmed by delivery of a copy by personal delivery or United
States 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 written
notice thereof in accordance with the terms of this Section 10.

 

If to Borrower:                   Caliper Life
Sciences, Inc.

	
   

  	
  68 Elm Street

  
	
   

  	
  Hopkinton,
  Massachusetts 01748

  
	
   

  	
  Attn: 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 AND
JURY TRIAL WAIVER AND JUDICIAL REFERENCE

 

Massachusetts law governs the Loan Documents (other
than the Securities Account Control Agreements executed in connection with the
Amended and Restated Loan and Security Agreement, by and among Borrower and
Bank), without regard to principles of conflicts of law.  Borrower and Bank each submit to the
exclusive jurisdiction of the State and Federal courts in Massachusetts;
provided, however, that nothing in this Agreement shall be deemed to operate to
preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of
Bank.  Borrower expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any
such court, and Borrower hereby waives any objection that it may have based
upon lack of personal jurisdiction, improper venue, or forum non conveniens and
hereby consents to the granting of such legal or equitable relief as is deemed
appropriate by such court.  Borrower
hereby waives personal service of the summons, complaints, and other process
issued in such action or suit and agrees that service of such summons,
complaints, and other process may be made by registered or certified mail
addressed to Borrower at the address set forth in Section 10 of this
Agreement and that service so made shall be deemed completed upon the earlier
to occur of Borrower’s actual receipt thereof or three (3) days after
deposit in the U.S. mails, proper postage prepaid. NOTWITHSTANDING ANYTHING TO
THE CONTRARY SET FORTH HEREINABOVE, BANK SHALL SPECIFICALLY HAVE THE RIGHT TO
BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS
OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST
BORROWER OR ITS PROPERTY.

 

18

 

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

 

12                                  GENERAL PROVISIONS

 

12.1                        Termination
Prior to Maturity Date.  This
Agreement may be terminated prior to the Revolving Line Maturity Date by
Borrower, effective three (3) Business Days after written notice of
termination is given to Bank or if Bank’s obligation to fund Credit Extensions
terminates pursuant to the terms of Section 2.1.1(c).  Notwithstanding any such termination, Bank’s
lien and security interest in the Collateral shall continue until Borrower
fully satisfies its Obligations.  If such
termination is at Borrower’s election, Borrower shall pay to Bank, in addition
to the payment of any other expenses or fees then-owing, a termination fee in
an amount equal to (i) from the Effective Date through and including the
first anniversary of the Effective Date, one-half of one percent of the
Revolving 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 facility
hereunder is replaced with a new facility from another division of Silicon
Valley Bank.  Upon payment in full of the
Obligations and at such time as Bank’s obligation to make
Credit Extensions has terminated, Bank shall release its liens and security
interests in the Collateral and all rights therein shall revert to Borrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

12.8                        Survival.  All covenants, representations and warranties
made in this Agreement continue in full force until this Agreement has
terminated pursuant to its terms and all Obligations (other than inchoate
indemnity obligations and any other obligations which, by their terms, are to
survive the termination of this Agreement) have been satisfied.  The obligation of Borrower in Section 12.3
to indemnify Bank shall survive until the statute of limitations with respect
to such claim or cause of action shall have run.

 

19

 

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

 

12.10                 Attorneys’ Fees,
Costs and Expenses.  In any action or
proceeding between Borrower and Bank arising out of or relating to the Loan
Documents, Bank shall be entitled to recover its reasonable attorneys’ fees and
other costs and expenses incurred, in addition to any other relief to which it
may be entitled.

 

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

 

12.12                 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 (including
a Bank subsidiary) or in transit to any of them.  At any time after the occurrence and during
the continuance of an Event of Default, without demand or notice, Bank may set
off the same or any part thereof and apply the same to any liability or obligation
of Borrower even though unmatured and regardless of the adequacy of any other
collateral securing the Obligations.  ANY
AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS
RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

12.13                 Amended and Restated Loan and Security
Agreement.  This Agreement amends and restates in its
entirety a certain Amended and Restated Loan and Security Agreement by and
among Borrower and Bank dated as of February 15, 2008, as amended.

 

12.14                 Confirmations and
Ratifications by Borrower.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in the Perfection Certificate, and acknowledges, confirms
and agrees that the disclosures and information Borrower provided to Bank in
each Perfection Certificate has not changed as of the date of this Agreement.

 

20

 

13                                  DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

“Agent” is
defined in Section 1.2(a).

 

“Agreement” is
defined in the preamble hereof.

 

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

 

“Bank” is
defined in the preamble hereof.

 

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

 

“Borrower” is
defined in the preamble hereof.

 

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

 

“Borrowing Base”
is (a) eighty percent (80%) of Eligible Accounts plus (b) the lesser
of seventy percent (70%) of Borrower’s unrestricted cash at Bank or Twelve
Million Dollars ($12,000,000); provided, that on each of the first three
(3) Business Days and each of the last three (3) Business Days of
each fiscal quarter of the Borrower, the Borrowing Base is (a) eighty
percent (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 recent
Borrowing Base Certificate, provided, however, that Bank may
decrease 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 adversely
affect 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’s
board of directors or other appropriate body and delivered by such Person to
Bank approving the Loan Documents to which such Person is a party and the
transactions contemplated thereby, together with a certificate executed by its
secretary on behalf of such Person certifying that (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the
Loan Documents to which it is a party, (b) that attached to such
certificate is a true, correct, and complete copy of the resolutions then in
full force and effect authorizing and ratifying the execution, delivery, and
performance by such Person of the Loan Documents to which it is a party, (c) the
name(s) of the Person(s) authorized to execute the Loan Documents on
behalf of such Person, together with a sample of the true signature(s) of
such Person(s), and (d) that Bank may conclusively rely on such
certificate unless and until such Person shall have delivered to Bank a further
certificate canceling or amending such prior certificate.

 

21

 

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

 

“Caliper” is
defined in the preamble hereof.

 

“Caliper LTD” is
defined in the preamble hereof.

 

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

 

“Cash Management Services”
is defined in Section 2.1.4.

 

“Cash Management Services
Sublimit”  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” is
any and all properties, rights and assets of Borrower described on Exhibit A.

 

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

 

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

 

“Communication”
is defined in Section 10.

 

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

 

“Contingent Obligation”
is, for any Person, any direct or indirect liability, contingent or not, of
that Person for (a) any indebtedness, lease, dividend, letter of credit or
other obligation of another such as an obligation directly or indirectly
guaranteed, endorsed, co-made, discounted or sold with recourse by that Person,
or for which that Person is directly or indirectly liable; (b) any
obligations for undrawn letters of credit for the account of that Person; and (c) all
obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; but “Contingent Obligation” does not
include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the
stated or determined amount of the primary obligation for which the Contingent
Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not
exceed the maximum of the obligations under any guarantee or other support
arrangement.

 

22

 

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

 

“Credit Extension”
is any Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash
Management Services, or any other extension of credit by Bank for Borrower’s
benefit.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“EBITDA” shall
mean (a) Net Income, plus (b) Interest Expense, plus (c) to the
extent deducted in the calculation of Net Income, depreciation expense,
amortization expense, restructuring expense and non-cash stock-based
compensation 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 that
meet all Borrower’s representations and warranties in Section 5.3.  Bank reserves the right at any time and from
time to time after the Effective Date upon notice to Borrower, to adjust any of
the criteria set forth below and to establish new criteria in its good faith
business judgment.  Without limiting the
fact that the determination of which Accounts are eligible for borrowing is a
matter of Bank’s good faith judgment, the following (“Minimum Eligibility
Requirements”) are the minimum requirements for an Account to be an Eligible
Account.  Unless Bank agrees otherwise in
writing, 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

 

	
  (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 not
have its principal place of business in the United States or Canada but are
otherwise Eligible Accounts that Bank approves in writing.

 

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

 

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

 

“Event of Default”
is defined in Section 8.

 

24

 

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

 

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

 

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

 

“FX Business Day”
is any day when (a) Bank’s Foreign Exchange Department is conducting its
normal business and (b) the Foreign Currency being purchased or sold by
Borrower is available to Bank from the entity from which Bank shall buy or sell
such Foreign Currency.

 

“FX Forward Contract”  is defined in Section 2.1.3.

 

“FX Reserve”  is defined in Section 2.1.3.

 

“GAAP” means (i) with
respect to Caliper Ltd., generally accepted accounting principles set forth in
the opinions and pronouncements of the Canadian Institute of Chartered
Accountants or in such other statements by such other Person as may be approved
by a significant segment of the accounting profession in Canada, which are
applicable to the circumstances as of the date of determination and (ii) with
respect to Borrower (other than Caliper Ltd.), generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant
segment of the accounting profession, which are applicable to the circumstances
as of the date of determination.

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

“Minimum Eligibility
Requirements” is defined in the defined term “Eligible Accounts”.

 

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

 

“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 but
unreimbursed Letters of Credit plus an amount equal to the Letter of Credit Reserves),
minus (b) the FX Reserve, and minus (c) the outstanding principal
balance of any Advances (including any amounts used for Cash Management
Services).

 

“NovaScreen”
is defined in the preamble hereof.

 

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

 

“Operating Documents”
are, for any Person, such Person’s formation documents, as certified with the
Secretary of State of such Person’s state of formation on a date that is no
earlier than thirty (30) days prior to the Effective Date, and, (a) if such
Person is a corporation, its bylaws in current form, (b) if such Person is
a limited liability company, its limited liability company agreement (or
similar agreement), and (c) if such Person is a partnership, its
partnership agreement (or similar agreement), each of the foregoing with all
current amendments or modifications thereto.

 

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

 

“Perfection Certificate”
is: (a) with respect to Caliper, that certain Perfection Certificate dated
as of the date hereof, executed by Caliper in favor of Bank, (b) with
respect to NovaScreen, that certain Perfection Certificate dated as of the date
hereof, executed by NovaScreen in favor of Bank, (c) with respect to
Xenogen, that certain Perfection Certificate dated as of the date hereof,
executed by Xenogen in favor of Bank, (d) with respect to Xenogen
Biosciences, that certain Perfection Certificate dated as of the date hereof,
executed by Xenogen Biosciences in favor of Bank; and (e) with respect to
Caliper 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’s
Indebtedness to Bank under this Agreement and the other Loan Documents;

 

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

 

(c)                                  Subordinated
Debt, if any;

 

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

 

(e)                                  Indebtedness
secured by Permitted Liens;

 

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

 

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

 

“Permitted Investments”
are:

 

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

 

(b)                                 Cash
Equivalents and Marketable Securities;

 

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

 

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

 

“Permitted Liens”
are:

 

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

 

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

 

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

 

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

 

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

 

(f)                                    licenses
of intellectual property granted to third parties in the ordinary course of
business;

 

27

 

(g)                                 Liens
in favor of Sotax Corporation (“Sotax”) and US Bank National Association (“US
Bank”) in an amount not to exceed One Million Dollars ($1,000,000) plus accrued
interest thereon, deposited by Sotax with US Bank pursuant to a certain
Indemnification Escrow Agreement dated as of November 10, 2008, by an
among Borrower, Sotax and US Bank.

 

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

 

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

 

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

 

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

 

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

 

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

 

“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 or
determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

 

“Reserves”
means, as of any date of determination after consultation with Borrower, such
amounts as Bank may from time to time establish and revise in good faith,
reducing the amount of Advances, Letters of Credit and other financial
accommodations which would otherwise be available to Borrower under the lending
formulas:  (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 is
security for the Obligations or its value (including without limitation any
increase in delinquencies of Accounts), (ii) the assets or business of
Borrower or any guarantor, or (iii) the security interests and other
rights of Bank in the Collateral (including the enforceability, perfection and
priority thereof); or (b) to reflect Bank’s good faith belief that any
collateral report or financial information furnished by or on behalf of
Borrower or any guarantor to Bank is or may have been incomplete, inaccurate or
misleading in any material respect; or (c) in respect of any state of
facts which Bank determines in good faith constitutes an Event of Default or
may, 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 and
Vice President, Finance of Borrower.

 

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

 

“Revolving Line Maturity
Date”  is November 30, 2010.

 

“Securities Account”
is any “securities account” as defined in the Code with such additions to such
term 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 or
hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or
other similar agreement in form and substance satisfactory to Bank entered into
between Bank and the other creditor), on terms acceptable to Bank.

 

28

 

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

 

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

 

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

 

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

 

“Transfer” is
defined in Section 7.1.

 

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

 

“Unused Revolving Line
Facility 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

 

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

 

BORROWER:

 

CALIPER LIFE SCIENCES, INC.

 

	
  By:

  	
  /s/ 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 Loan
and Security Agreement]

 

 

EXHIBIT A

 

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

 

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

 

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

 

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

 

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

 

1

 

EXHIBIT B

 

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 Life
Sciences, Inc., NovaScreen Biosciences Corporation, Xenogen Corporation,
Xenogen Biosciences Corporation and Caliper Life Sciences, Ltd. (individually
and collectively, jointly and severally, “Borrower”) certify that under the
terms and conditions of the Loan and Security Agreement between Borrower and
Bank (the “Agreement”), (1) Borrower is in complete compliance for the
period ending
                              
with all required covenants except as noted below, (2) there are no Events
of Default, (3) all representations and warranties in the Agreement are
true and correct in all material respects on this date except as noted below;
provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by materiality
in the text thereof; and provided, further that those representations and
warranties expressly referring to a specific date shall be true, accurate and
complete in all material respects as of such date, (4) Borrower, and each
of its Subsidiaries, has timely filed all required tax returns and reports, and
Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise
permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no
Liens have been levied or claims made against Borrower relating to unpaid
employee payroll or benefits of which Borrower has not previously provided
written notification to Bank.  Attached
are the required documents supporting the certification.  The undersigned certifies that these are
prepared in accordance with GAAP consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is
delivered.  Capitalized terms used but
not otherwise defined herein shall have the meanings given them in the
Agreement.

 

Please
indicate compliance status by circling Yes/No under “Complies” column.

 

	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarterly
  consolidated and consolidating financial statements with Compliance
  Certificate

  	
   

  	
  Quarterly
  within 45 days

  	
   

  	
  Yes 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

  

 

The
following intellectual property was registered after the Effective Date (if no
registrations, state “None”)

 

	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  	
   

  
	
  Maintain at all times, tested quarterly:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Quick Ratio

  	
   

  	
  0.95:1.00

  	
   

  	
  :1.0

  	
   

  	
  Yes o  No o

  	
   

  
	
  Minimum EBITDA minus Cap Ex*

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  Yes o  No o

  	
   

  

 

                                                *See Section 6.9(b) of
the Loan and Security Agreement

 

1

 

                                                The following
financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate.

 

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

 

 

	
  CALIPER LIFE SCIENCES,
  INC.

  	
   

  	
  BANK
  USE ONLY

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  Received by:

  	
   

  
	
  Name:

  	
  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

 

Schedule 1 to Compliance
Certificate

 

Financial Covenants of Borrower

 

Dated:

 

In
the event of a conflict between this Schedule and the Loan Agreement, the terms
of the Loan Agreement shall control.

 

I.                                         ADJUSTED
QUICK RATIO (Section 6.9(a))

 

Required: A
ratio of Quick Assets to Quick Liabilities of at least: 0.95  to 1.0 for the quarter ending March 31, 2009 and for
each fiscal quarter thereafter

 

	
  A.

  	
   

  	
  Aggregate
  value of the unrestricted cash and Cash Equivalents and Marketable Securities
  of Borrower

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Aggregate
  value of the net billed accounts receivable and Unbilled Accounts of Borrower

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Quick
  Assets (the sum of lines A and B)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Aggregate
  value of Obligations to Bank

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Aggregate
  value of liabilities of Borrower (including all Indebtedness) that matures
  within one (1) year and current portion of Subordinated Debt permitted
  by Bank to be paid by Borrower

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F

  	
   

  	
  Aggregate
  value of (i) Deferred Revenue, (ii) real estate related
  restructuring expenses, and (iii) customer deposits

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Quick
  Liabilities (the sum of lines D and E minus line F)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Adjusted
  Quick Ratio (line C divided by line G)

  	
   

  	
   

  

 

Is
line H equal to or greater than 0.95 to 1.0

 

                                                o  No, not in compliance                                                                                                                                                                                                                                                             o  Yes, in compliance

 

3

 

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

 

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

 

	
  A.

  	
  Net
  Income

  	
  $

  
	
   

  	
   

  	
   

  
	
  B.

  	
  Interest
  Expense

  	
  $

  
	
   

  	
   

  	
   

  
	
  C.

  	
  To
  the extent included in the determination of Net Income:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.             Depreciation expense

  	
  $

  
	
   

  	
   

  	
   

  
	
   

  	
  2.             Amortization expense

  	
  $

  
	
   

  	
   

  	
   

  
	
   

  	
  3.             Non-cash stock-based compensation
  expense and restructuring expense

  	
  $

  
	
   

  	
   

  	
   

  
	
  D.

  	
  income
  tax expense

  	
  $

  
	
   

  	
   

  	
   

  
	
  E.

  	
  EBITDA
  (line A, plus line B, plus line C.1, plus line C.2, plus line C.3, and plus
  line D)

  	
  $

  
	
   

  	
   

  	
   

  
	
  F.

  	
  capital
  expenditures

  	
  $

  
	
   

  	
   

  	
   

  
	
  G.

  	
  EBIDTA
  minus CAP EX (line E minus line F)

  	
  $

  

 

Is
line G equal to or greater than $[                                                                                                                                                         ]?

 

                                                                                                o  No, not in compliance                                                                                                                                                                                                                                                             o  Yes, in compliance

 

1

 

EXHIBIT C

 

Transaction Report

 

(Bank to provide)

 

1

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