EXHIBIT 10.61
September 17, 2003
The Berwind Company, LLC
c/o Berwind Corporation
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer
RE: APPOINTMENT OF BERWIND NOMINEE TO THE CALIPER BOARD AND BERWIND NON-VOTING
PARTICIPANT RIGHTS ON THE CALIPER BOARD
Ladies/Gentlemen:
Reference is made to that certain Stock Purchase Agreement among Caliper
Technologies Corp. ("Caliper"), The Berwind Company, LLC ("Berwind") and Berwind
Corporation dated as of June 9, 2003 (as amended by Amendment No. 1 thereto
dated July 10, 2003, the "Stock Purchase Agreement"). This letter agreement
shall set forth the terms and conditions of (i) Berwind's limited waiver of the
requirements of Section 6.2 of the Stock Purchase Agreement, pursuant to which
Caliper was required to cause a nominee of Berwind, who is reasonably acceptable
to Caliper, to be appointed to the Caliper Board of Directors (the "Caliper
Board") within 60 days following the closing under the Stock Purchase Agreement,
and (ii) Caliper's agreement that a senior management executive of Berwind, who
shall be designated by Berwind and reasonably acceptable to Caliper, shall have
the right to attend and participate, but not vote at, meetings of the Caliper
Board.
BACKGROUND. Pursuant to Section 6.2 of the Stock Purchase Agreement Caliper was
required to cause a nominee of Berwind, who is reasonably acceptable to Caliper,
to be appointed to the Caliper Board of Directors within 60 days following the
closing under the Stock Purchase Agreement. By letter dated July 22, 2003,
Berwind notified Caliper that its nominee to be appointed to the Board was Mr.
Van Billet, the Vice President and Chief Financial Officer of Berwind. However,
Mr. Billet may not be considered an "independent director" for purposes of the
Caliper Board under Nasdaq Rule 4200(a)(14)(A). Because the addition of an
additional director who is not considered to be "independent" under applicable
Nasdaq rules would cause the Caliper Board to be evenly divided between
"independent" directors and directors not considered to be "independent",
Berwind has agreed to accommodate Caliper and waive the requirement of Section
6.2 of the Stock Purchase Agreement for a period of time of up to December 31,
2004, subject to the terms and conditions hereof. In consideration of Berwind's
agreement to provide such accommodation and waiver, Caliper has agreed, subject
to the terms and conditions hereof: (i) that Mr. Van Billet or another person
designated from time to time by Berwind who is reasonably acceptable to Caliper
(the "Berwind Non-Voting Participant") shall have the right to attend meetings
of the Caliper Board as a non-voting participant; (ii) that
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Caliper shall use its reasonable best efforts to cause as promptly as practical
the composition of the Caliper Board to be such as to allow the Berwind
Non-Voting Participant to be a Caliper Board member while still maintaining a
majority of "independent" directors on the Caliper Board, and upon such event
shall cause the Berwind Non-Voting Participant to be appointed to the Caliper
Board as promptly as practical and (iii) that Caliper shall in any event cause
the Berwind Non-Voting Participant to be a Caliper Board member by December 31,
2004.
AGREEMENT. Based on the foregoing, Caliper and Berwind hereby agree as follows:
1. Subject to the terms and conditions of this letter agreement, Berwind
agrees to waive the requirement set forth in Section 6.2 of the Stock
Purchase Agreement for Caliper to cause the appointment of the person
nominated to the Caliper Board by Berwind within 60 days after the
closing under the Stock Purchase Agreement, retroactive to September
12, 2003. Caliper agrees in exchange therefor (i) to use its reasonable
best efforts to cause, as promptly as practical, the composition of the
Caliper Board to be such as to allow the Berwind Non-Voting Participant
to be a Caliper Board member while still maintaining a majority of
"independent" directors on the Caliper Board, and upon such event
Caliper shall cause the Berwind Non-Voting Participant to be appointed
to the Caliper Board as promptly as practical (but no later than 60
days from such event) and (ii) that it shall in any event cause the
Berwind Non-Voting Participant to be a Caliper Board member by December
31, 2004. Caliper also agrees that in the event outside counsel
reasonably acceptable to both Berwind and Caliper determines that the
Berwind Non-Voting Participant can be appointed to the Caliper Board as
an "independent" director Caliper shall cause the Berwind Non-Voting
Participant to be appointed to the Caliper Board within 60 days of such
determination. Berwind agrees that the exercise of reasonable best
efforts by Caliper shall not require Caliper, prior to December 31,
2004, either (x) to request the resignation of, or decline to nominate
for re-election by Caliper's stockholders, any director not considered
to be "independent," (y) to increase the size of the Caliper Board, or
(z) to offer any potential Caliper Board member any compensation not
consistent with current practice.
2. Until such time as Berwind shall have its nominee appointed or elected
to the Caliper Board as set forth in paragraph 1 above, Berwind shall
have the right to have the Berwind Non-Voting Participant attend
Caliper Board meetings as a non-voting participant, subject to the
following terms and conditions:
a) The Berwind Non-Voting Participant shall keep all matters
discussed during meetings of the Caliper Board strictly
confidential, unless and until any such matters have been
publicly disclosed by Caliper; provided that he/she shall be
entitled to disclose the information to Berwind and its
affiliates and Berwind shall be, and shall cause its
affiliates to be, bound by the foregoing confidentiality
obligation. If any of Berwind, its affiliates or the Berwind
Non-Voting Participant is required by law or governmental
regulation or by subpoena or other valid legal process to
disclose any such confidential matter to any person, then
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Berwind will immediately provide Caliper with written notice
of the applicable law, regulation or process so that Caliper
may seek a protective order or other appropriate remedy.
b) Berwind hereby agrees that certain matters involving pending
or potential litigation discussed during meetings of the
Caliper Board may need to be protected by attorney/client
privilege, as determined by Caliper's General Counsel in his
reasonable discretion, and that the Berwind Non-Voting
Participant shall not be entitled to attend any portion of any
meeting of the Caliper Board during which such matters are to
be discussed.
c) Berwind hereby agrees to that from time to time certain
matters may be discussed during meetings of the Caliper Board
that involve contractual or other legal relationships or
conflicts between Caliper and Berwind (such as, for example,
claims for indemnification that Caliper may have against
Berwind under the terms of the Stock Purchase Agreement), and
that the Berwind Non-Voting Participant shall not be entitled
to attend any portion of any meeting of the Caliper Board
during which such matters are to be discussed.
d) Berwind hereby agrees to that from time to time the members of
the Caliper Board who are considered to be "independent" may
meet alone in executive session, and that the Berwind
Non-Voting Participant shall not be entitled to attend any
such executive session meetings of the "independent" members
of the Caliper Board.
e) Berwind hereby acknowledges that it is aware that the United
States securities laws prohibit any person who has received
from an issuer material, non-public information from
purchasing or selling securities of such issuer or from
communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell securities. Berwind
agrees that it shall be solely responsible for any securities
laws violations of the Berwind Non-Voting Participant or any
other Berwind employee, affiliate or agent with respect to
actions taken by the Berwind Non-Voting Participant or such
Berwind employee, affiliate or agent based on information
discussed during any meeting of the Caliper Board.
3. Caliper agrees that it will indemnify the Berwind Non-Voting
Participant in the same circumstances and to the same extent that
Caliper is obligated to indemnify any of the members of the Caliper
Board, including but not limited to under the charter, bylaws and any
indemnity agreement, as if the Berwind Non-Voting Participant was a
director of Caliper.
4. The Berwind Non-Voting Participant will have similar rights to be a
non-voting participant in two committees of the Caliper Board, subject
to the same terms and conditions set forth in paragraph 2 above.
Berwind agrees that the Berwind Non-Voting
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Participant shall not be entitled to participate in any portion of a
meeting of a committee comprised entirely of "independent" directors
when such committee is meeting without the presence of any members of
the Caliper Board who are not considered to be "independent" or without
the presence of any employees of Caliper. The committees of the Caliper
Board upon which the Berwind Non-Voting Participant will be entitled to
participate shall be agreed upon between the Berwind Non-Voting
Participant and the Chairman of the Caliper Board.
5. The Berwind Non-Voting Participant will be compensated in substantially
the form and amount as if he/she was a Caliper Board member; provided,
however, that Caliper shall not be required to extend any compensation
to any Berwind Non-Voting Participant if such compensation would be in
excess of the amount that Caliper would be required to extend if the
Berwind Non-Voting Participant remained the same person throughout the
term of this letter agreement. In addition, Berwind agrees that at such
time as the Berwind Non-Voting Participant is first appointed or
elected to the Caliper Board, such person shall not be entitled to
receive any additional compensation due to such person's initial
appointment or election to the Caliper Board (such as an initial grant
of options) to the extent such person has previously received such
compensation in his or her capacity as the Berwind Non-Voting
Participant. Such compensation shall be set forth in a consulting
agreement in form and substance acceptable to the Berwind Non-Voting
Participant and Caliper.
6. The rights and obligations of Berwind and Caliper set forth in this
letter will terminate and be of no further force and effect on the
earlier to occur of (i) the date that a person nominated by Berwind is
appointed or elected to the Caliper Board, in which event Section 6.2
of the Stock Purchase Agreement shall govern the parties' continuing
rights and obligations with respect to representation on the Caliper
Board, and (ii) such date as the number of shares of Caliper Common
Stock owned by Berwind represents less than 5% of the issued and
outstanding shares of Caliper Common Stock.
7. If any provision of this letter agreement or the application of any
such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision hereof. This letter agreement may be
executed in several counterparts, each of which shall constitute an
original and all of which, when taken together, shall constitute one
agreement. The exchange of a fully executed letter agreement (in
counterparts or otherwise) by fax shall be sufficient to bind the
parties to the terms and conditions of this letter agreement.
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If this letter agreement correctly sets forth the terms and conditions of our
agreement regarding the subject matter hereof, please execute each copy of this
letter agreement in the space provided below and return a fully executed copy of
this letter to Caliper.
Sincerely,
CALIPER TECHNOLOGIES CORP.
By: /s/ Daniel L. Kisner
-----------------------------------
Name: Daniel L. Kisner, M.D.
Title: Chairman
Agreed and accepted this 17th day of September, 2003.
THE BERWIND COMPANY LLC
By: /s/ Van Billet
----------------------------------
Name: Van Billet
Title: Vice President and
Chief Financial Officer