EXHIBIT 10.9
SERVICES AGREEMENT
This is a Services Agreement ("Agreement") between Buck Investment
Services, Inc., a Delaware corporation with offices at 000 Xxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 ("BIS"), and CH2M HILL Companies, Ltd., an Oregon
corporation with offices at 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx
00000 ("CH2M"), dated to be effective as of March 15, 1999.
1. Scope of Agreement. This Agreement sets forth the terms and
conditions under which BIS will assist with the implementation of, and serve as
broker and transfer agent with respect to, CH2M's internal market as further
outlined in Exhibit A (the "Services").
2. Term. The term of this Agreement will begin March 15, 1999, and will
end when terminated in accordance with the provisions hereof. BIS acknowledges
the unique nature of the services it is providing under this Agreement and the
difficulty CH2M would have in replacing BIS without ample notice. Accordingly,
BIS agrees that so long as CH2M is not in default or breach of any of its
obligations hereunder, BIS may terminate this Agreement only upon two- years'
written notice of such termination to CH2M. Notwithstanding the foregoing, BIS
may terminate this Agreement upon thirty (30) days prior written notice thereof
to CH2M in the event of a breach or default by CH2M of any of its material
obligations hereunder which shall include, without limitation, any failure or
refusal to pay any amount payable to BIS pursuant hereto as and when due
subject, however, to the provisions of Section 3(c) hereof.
Subject to the provisions of Section 3(a)(iv) hereof relating to
Termination Fees, CH2M may terminate this Agreement at the end of any calendar
quarter upon 30-days' written notice of such termination to BIS.
3. Fees and Expenses. (a) Fees. (i) Except where CH2M and BIS agree to
the contrary for particular projects or services, CH2M will pay BIS the fees
prescribed in Exhibit B.
(ii) Any services provided by BIS at the request of CH2M which
are in addition to the Services contemplated by Section 1 above (or any
functional specifications developed pursuant thereto), shall be provided on such
terms as may be mutually agreed upon by BIS and CH2M. If no such terms are
specified, however, such services will be provided BIS's then-current time and
computer charges, with reasonable and necessary out-of-pocket expenses
reimbursed at cost in accordance with Section 3(b) below (all of which shall be
in addition to the fees prescribed in Exhibit B or otherwise hereunder).
(iii) For the avoidance of doubt, any services required to be
provided by BIS as a result or consequence of any equity security constituting a
"Xxxxx Stock" as defined under the Securities Exchange Act of 1934 or any
regulation promulgated pursuant thereto which services would not be required if
such security did not constitute a "Xxxxx Stock" will be in addition to those
contemplated in Section 1 above and will be provided by BIS, to the extent
practicable, at its then-current time and computer charges, with reasonable and
necessary out-of-pocket expenses reimbursed at cost in accordance with the
provisions of (b) below.
(iv) In the event that CH2M elects to terminate this Agreement at
any time prior to December 31, 1999 in accordance with the provisions of Section
2 above or, in the event that this Agreement is terminated by BIS as a result of
the failure or refusal of CH2M to pay any amount payable to BIS hereunder as and
when due and, in any such event so long as BIS has not failed to perform any
obligation required of it pursuant hereto, on or before the effective date of
any such termination, CH2M shall pay to BIS a termination fee in an amount equal
to the difference between (a) $125,000, and (b) the aggregate of all fees paid
by CH2M pursuant to this Agreement prior to the effective date of such
termination.
(b) Expenses. In addition to the fees payable under this section,
CH2M will reimburse BIS for its reasonable and customary out-of-pocket expenses,
including travel, printing, postage, and dedicated telephone and computer lines,
incurred in connection with the performance of Services under this Agreement.
(c) Payment. Subject to the payment schedule provided in Exhibit B
and except for any termination payment required pursuant to Section 3(a)(iv)
above which shall be payable on demand, at the end of each month during the term
of this Agreement, BIS will send CH2M an invoice indicating the fees and any
expenses then payable under this Agreement in connection with the provision of
the Services. CH2M will pay BIS the fees and expenses shown on the invoice, or
pay any undisputed fees and expenses shown on the invoice and notify BIS in
writing of any questions or disputes regarding the invoice, within 30 days of
receiving the invoice. All amounts which are not disputed in good faith and in
writing as provided above, and which are not paid within 30 days of receipt of
the invoice will bear interest at the rate of 1 percent per month. All invoices
will be rendered and payments will be made in U.S. dollars in the United States.
4. Confidentiality. (a) General. CH2M and BIS may from time to time
communicate to the other proprietary, confidential or other information to
enable the other to perform its responsibilities under this Agreement. CH2M and
BIS will treat all such information as confidential, and will take all
reasonable precautions not to disclose any such information to any person
outside their respective organizations without the consent of the other,
including, but not limited to, all precautions taken by CH2M or BIS, as the case
may be, to safeguard the confidentiality of its own proprietary and confidential
business information. CH2M and BIS will also limit the use and distribution of
such information within their respective organizations to the extent necessary
and appropriate to perform the Services.
(b) Exceptions. The foregoing obligation of confidentiality will not
apply to information which is (i) in the public domain or comes into the public
domain through no fault of CH2M or BIS; (ii) known to CH2M or BIS, as the case
may be, before disclosure or subsequently independently developed by CH2M or BIS
without use of or reference to such information; (iii) disclosed to CH2M or BIS
by a third person under no obligation of confidentiality to CH2M or BIS; or (iv)
required by any governmental authority to ensure compliance with laws, rules or
regulations, in which case CH2M or BIS, as the case may be, will provide advance
notice to the other of the need for the disclosure, and will not disclose absent
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consent from the other, except to the extent required by law, legal process or
regulatory authority having jurisdiction over CH2M or BIS.
5. Independent Contractor Relationship. The relationship of BIS to
CH2M is that of an independent contractor, and nothing in this Agreement creates
an agency, master-servant, trust, fiduciary, or any other relationship between
BIS (or any of its officers, directors, or employees) and CH2M (or any of its
officers, directors or employees).
6. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breech thereof, will be settled by binding arbitration
conducted by the National Association of Securities Dealers, Inc. ("NASD") in
Denver, Colorado, in accordance with the Arbitration Rules of the NASD and
judgment upon the award rendered by the arbitrators may be entered in any court
of competent jurisdiction. It is hereby agreed and acknowledged that either
party may seek, and such arbitrators may grant, injunctive relief.
7. Complete Agreement; Governing Law. This Agreement, including
Exhibits A and B hereto and any function specifications developed (and mutually
agreed upon) pursuant hereto contain the entire agreement of the parties and
there are no promises, understandings, or agreements of any kind pertaining to
this Agreement other than stated herein. This Agreement will be construed and
enforced in accordance with the laws of the State of New York without regard to
the legislative or judicial conflicts of law rules of any state.
8. Assignment. Neither party may assign its rights or delegate its
duties under this Agreement without the prior written consent of the other party
hereto.
9. Limitation of Liability. Subject to the selection of remedies set
forth in Section 11 of this Agreement, BIS will be responsible to CH2M only for
BIS's (a) breach of a representation or warranty set forth in Section 10 of this
Agreement or other material failure to perform its obligations hereunder or, (b)
negligence in the performance of its obligations hereunder; or (c) wilful
misconduct on the part of BIS. Notwithstanding the foregoing, BIS will not be
responsible or liable to CH2M or any employee of CH2M for BIS's (i) failure to
perform any services other than those specifically agreed to pursuant to this
Agreement; (ii) actions or failures to act based on instructions or directions
from CH2M or with the concurrence of CH2M, or (iii) failure to provide the
Services listed on Exhibit A or outlined in any functional specifications
developed pursuant hereto or perform any other obligation pursuant hereto
primarily because of (a) any error or omission in data, documents, or
information provided by or on behalf of CH2M or (b) any failure on the part of
CH2M to provide any service or product required to be provided by it pursuant to
Exhibit A and upon which the Services to be provided by BIS are directly or
indirectly dependent.
10. Representations and Warranties. (a) BIS represents and warrants to
CH2M that at all times during the term of this Agreement -
(i) BIS is currently registered as a broker-dealer with the
Securities and Exchange Commission, the National Association of
Securities Dealers, Inc.
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and under the local laws of Peurto Rico, Washington D.C. and
all states of the United States except New Hampshire and
will be registered as a broker-dealer with the Securities
and Exchange Commission, the National Association of
Securities Dealers, Inc. and each U.S. State and Territory
necessary to effect all of the domestic securities
transactions on the CH2M Internal Market as described in the
CH2M HILL registration statement;
(ii) BIS will have sufficient registered
representatives and registered principals to effect all of the
domestic securities transactions on the CH2M Internal Market
as described in the CH2M registration statement;
(iii) Subject to the satisfaction by CH2M of its
obligations under and pursuant to Exhibit A, BIS will maintain
systems (including the database application described on
Exhibit A) sufficient to effect all of the domestic securities
transactions on the CH2M Internal Market; and
(iv) Subject to the satisfaction by CH2M of its
obligations under and pursuant to Exhibit A, systems
(including the database application described on Exhibit A)
will function properly on and after January 1, 2000; will
recognize and correctly manipulate any four-digit year; and
will apply pivot logic to any two-digit year entered into the
systems.
(b) CH2M represents and warrants to BIS that at all times
during the term of this Agreement -
(i) All shares issued, purchased or sold on the
Internal Market will be issued, purchased or sold in
transactions registered under the Securities Act of 1933 and
each applicable state securities law or will be exempt from
registration; and
(ii) All systems and applications for which CH2M is
responsible (as set forth on Exhibit A) will function properly
after on and after January 1, 2000; will recognize and
correctly manipulate any four-digit year; and will apply pivot
logic to any two-digit year entered into the systems.
(c) Before the first trade on the Internal Market, and at
least annually thereafter, CH2M will provide BIS with an opinion or memorandum
of CH2M's securities counsel setting forth CH2M's basis for determining that
such transactions are required to be registered (and the current status of such
registrations) or are exempt from registration in each such jurisdiction.
11. Selection of Remedies. This Section sets forth the sole and
exclusive remedies of CH2M for any matters for which BIS is liable pursuant to
this Agreement.
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(a) Correction of Errors. BIS will make its services available
without cost to correct any error or omission caused by BIS, provided such error
or omission is brought to BIS's attention within 60 days of the date upon which
the error or omission is, or should have been, discovered. Processing will
conclusively be deemed correct if BIS is not informed of an error or omission
within the aforementioned period.
(b) Direct Financial Loss. BIS will make whole CH2M for any
direct financial loss caused by any error or omission of BIS, provided such
error or omission is brought to BIS's attention within 60 days of the date upon
which the error or omission is, or should have been, discovered.
(c) CH2M Records. BIS will make its services available without
cost to correct any errors in CH2M records caused by BIS.
(d) License. In the event BIS fails or refuses to perform its
material obligations hereunder without providing the two-years' prior written
notice required by Section 2 hereof, in addition to any other remedies CH2M may
have hereunder, CH2M will have a fully-paid, perpetual license to use all of the
systems used by BIS to perform the Services (including the database application
described on Exhibit A).
(e) EXCLUSION OF OTHER REMEDIES. IN NO EVENT WILL BIS BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION
DAMAGES RELATING TO LOSS OF PROFITS, GOODWILL, OR DATA), WITHOUT REGARD TO THE
LEGAL THEORY OF SUCH DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, ARISING OUT OF OR RELATED TO SUCH SERVICES.
12. Indemnity Against Certain Claims. CH2M will indemnify and hold
harmless BIS and its affiliates (and their respective officers, directors,
employees, and agents) from and against any claims, causes of action, penalties,
liabilities, damages, settlements, costs, and expenses (including reasonable
attorneys' fees) incurred by or brought against BIS, its affiliates or any of
their respective officers, directors, employees, shareholders or agents,
(including but not limited to claims of the officers, directors, shareholders,
employees and agents of CH2M), arising out of or related to:
(a) the valuation, suitability or other investment
characteristics of CH2M stock, or the investment decision by any person
to buy or sell or refrain from buying or selling such stock;
(b) the failure of the Internal Market or the Internal Market
Rules to provide liquidity for shareholders of CH2M (other than as a
result of a breach by BIS of a representation of warranty contained in
section 10(a));
(c) breach of any representation or warranty given by CH2M
under this Agreement; or
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(d) the failure of CH2M, any security of CH2M, or the Internal
Market to comply in any respect with any law, rule or regulation
applicable thereto including, without limitation, Federal and state
securities laws.
(e) any other claim or cause of action brought by any third
party which is not attributable to the negligence, recklessness or
willful misconduct of BIS or its affiliates (or their respective
officers, directors, employees, or agents).
BIS will promptly notify CH2M of any such claim, lawsuit or proceeding. CH2M
may, at its expense, assume and control the defense and settlement of any such
claim, lawsuit, or proceeding, in which case BIS will cooperate with such
defense and settlement and have no further liability in connection with such
claim, lawsuit, or proceeding.
13. Notices. Notices under this Agreement shall be made in writing
and be delivered to each party personally, by certified mail - return receipt
requested, or by facsimile to the address for each party shown at the beginning
of this Agreement or to such other address as a party may notify the other
parties that it desires notices to be sent.
14. Designation of Project Coordinators. Each party will designate
to the other a Project Coordinator and a person who will be the contact person
for all information technology issues associated with the performance of this
Agreement. The parties may designate substitute or replacement Project
Coordinators or IT Coordinators at any time. Each party will make its Project
Coordinator and IT Coordinator available for planning sessions, status meetings,
telephone consultation and otherwise all as reasonably required to facilitate
the implementation of this Agreement.
15. Proprietary Rights; Work Product. (a) The parties hereto
acknowledge and agree that (i) all CH2M-related data and information provided
by CH2M for use in connection with the provision of the Services is and shall
remain the property of CH2M; and (ii) the data-base table structure created or
developed in connection with the implementation of this Agreement or the
provision of the Services contemplated hereby shall belong to, and may be used
by or for the benefit of each of BIS and CH2M; (iii) the data base
administration system developed by BIS in connection with the provision of the
Services and all additions, improvements and modifications made thereto
(together with all proprietary rights therein including, but not limited to,
trade secrets, copyrights, trademarks, service marks, trade names,
specifications, techniques, know-how, methods, algorithms, procedures and
documentation in or relating thereto), belong exclusively to BIS, even if CH2M
assists BIS in, or pays BIS for, such additions, improvements, or modifications;
and (iv) all inter/intra net front-end (web design and code development) and all
additions, improvements and modifications made thereto(together with all
proprietary rights therein including, but not limited to, trade secrets,
copyrights, trademarks, service marks, trade names, specifications, techniques,
know-how, methods, algorithms, procedures and documentation in or relating
thereto), belong exclusively to CH2M, even if BIS assists CH2M in developing
such additions, improvements, or modifications.
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(b) The provisions of Section 15(a) are subject to the
perpetual license, if any, granted pursuant to the provisions of Section 11(d)
hereof.
16. Consulting Services of Buck Consultants, Inc. This Agreement does
not govern any of the terms or conditions under which Buck Consultants, Inc.
provides actuarial other consulting services to CH2M.
17. Survival. The provisions of Sections 4, 6, 7, 9, 11, 12 and 15
hereof will survive the expiration or termination of this Agreement.
18. Force Majeure. Delay in performance or non-performance of any
obligation contained herein shall be excused to the extent such failure or
non-performance is caused by force majeure. For purposes of this Agreement,
"force majeure" shall mean any cause or agency preventing performance of an
obligation which is beyond the reasonable control of either party hereto,
including without limitation, fire, flood, sabotage, shipwreck, embargo, strike,
explosion, labor trouble, accident, riot, acts of governmental authority
(including, without limitation, acts based on laws or regulations now in
existence as well as those enacted in the future), acts of God, and delays or
failure in obtaining raw materials or transportation. A party affected by force
majeure shall promptly provide notice to the other, explaining the nature and
expected duration thereof, and shall act diligently to remedy the interruption
or delay if it is reasonably capable of being remedied. In the event of a force
majeure situation, performance of Services or acceptance of Services which have
been suspended shall not be required to be made up on the resumption of
performance to the extent impracticable.
19. Modifications. This Agreement may be amended only by a writing
signed by all parties hereto.
(remainder of page intentionally left blank)
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Intending to be legally bound, Buck Investment Services, Inc. and CH2M HILL
Companies, Ltd. have caused this Agreement to be executed by duly authorized
officers on the dates shown below.
BUCK INVESTMENT SERVICES, INC.
/s/ Xxxx X. Xxxxxxxx
Date: --------------------------------------------
Xxxx X. Xxxxxxxx
President
CH2M HILL COMPANIES. LTD.
/s/ Xxxx Xxxxxx
Date: --------------------------------------------
Xxxx Xxxxxx
Treasurer
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EXHIBIT A
DESCRIPTION OF SERVICES
Limited Secondary Market Brokerage
BIS will act as the exclusive U.S. broker and effect all securities transactions
on CH2M's Internal Market (in the United States and mutually agreed upon foreign
jurisdictions) in accordance with CH2M's Internal Market Rules in effect from
time to time. BIS will not be required to effect any transaction which would
subject BIS to the regulation of any non-U.S. securities administrator or would,
in the sole and exclusive judgment of BIS, be likely to constitute a violation
of any state, Federal or NASD law, rule or regulation. Such brokerage activities
will be conducted in accordance with applicable rules and regulations of the
Securities Exchange Commission and the National Association of Securities
Dealers, Inc. Notwithstanding the foregoing, BIS will not serve as broker (but
may serve as transfer agent) with respect to (i) transactions between the CH2M
Treasury and the CH2M Internal Market; and (ii) transactions involving the use
of CH2M securities as consideration for corporate acquisitions by CH2M.
Employee Stock Purchase Plan Administration
BIS and CH2M will develop and agree upon functional specifications for the
administration of CH2M's employee stock purchase plan which functional
specifications will effectively define and limit the services to be provided by
BIS pursuant hereto. Under those functional specifications, BIS will calculate
discount and shares purchased and maintain records for each participant based on
CH2M payroll extracts provided by CH2M after each semi-monthly payroll date. BIS
will provide CH2M such reports as it may reasonably request from time to time.
BIS will calculate expense associated with such plan under Financial Accounting
Standard 123 using assumptions and methodology approved by CH2M. BIS will assist
CH2M prepare employee communications related to the tax consequences of such
plan and will render advice to CH2M's communications team, but BIS will not be
responsible for developing other communications materials.
Transfer Agent and Stock Administration
Effective January 1, 2000, BIS will act as CH2M's transfer agent and maintain
CH2M's stockholder records and provide CH2M such reports as CH2M may request
from time to time. BIS will provide CH2M reports indicating those shareholders
of CH2M who are identified by CH2M as subject to section 16(b) of the Securities
Exchange Act of 1934 and transactions involving Rule 144 promulgated under such
Act. In each case, BIS may rely upon counsel to CH2M regarding the
identification of individuals who are subject to section 16(b) and Rule 144.
Information Technology
The services described above will be based on a Microsoft SQL Server 7.0
database and Access 97 database application that will reside on CH2M servers,
which servers will remain the
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exclusive property of CH2M. BIS and CH2M will jointly develop and agree upon
business requirements and systems architecture for such application.
BIS will be responsible for database and database application design and code
development; CH2M will provide reasonable assistance inc such design and code
development. CH2M will be responsible for Intranet applications design
(including designing the look and feel of the web site, logos and banners,
navigation bars or tools, page layout, and object placement) and code
development (including coding HTML pages, CGI scripts, Java applets or other
applications); BIS will provide reasonable assistance in such design and code
development. CH2M will be responsible for design and code development relating
to the integration of the Intranet site with the database application; BIS will
provide reasonable assistance in such design and code development.
CH2M will be responsible for server administration and system security and
backup; BIS will be responsible for database administration and will have the
sole authority to alter or write to the database application. CH2M will also be
responsible for update and maintenance of (and will have sole ownership of) all
indicative or demographic data in its human resources information system, which
indicative or demographic data will be linked to the database application. CH2M
will have read-only access to the data in the database, provided, however, that
CH2M may write to a pending transactions table or database.
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EXHIBIT B
SCHEDULE OF FEES
CH2M will pay BIS the following fees and expenses:
Implementation (Set-Up) Fees in 1999
In consideration for, and subject to the implementation (Set-Up) by BIS of the
Internal Market, CH2M will pay BIS implementation fees during 1999 of $125,000
($31,250 upon execution of this Agreement; $31,250 on June 30, 1999; $31,250 on
September 30, 1999; and $31,250 on December 31, 1999; and
Administrative Service Fees in 2000
Beginning in 2000, CH2M will pay BIS a quarterly fee of $55,000 (offset by any
brokerage commissions which BIS receives for Internal Market brokerage
transactions). In the event that such brokerage commissions exceed $55,000, BIS
will use the excess to defray the (non-BIS- related) costs of CH2M maintaining
the Internal Market.
For each year from and after 2000 during the term of this Agreement (including
any year comprising any portion of the two-year notice of termination required
to be given by BIS pursuant to Section 2 hereof) CH2M will pay BIS such fees as
may be mutually agreed or, in the absence of such Agreement, fees in an amount
equal to 110% of the fees payable by CH2M for and in respect of the immediately
preceding year. The failure of the parties to reach an agreement as to fees
payable hereunder on or before March 15 of any year during the term hereof for
which such fees are to be determined shall, without further action by either
party, be deemed to constitute a notice of termination hereof by BIS which
notice shall be deemed to have been so give effective on January 1 of such year.
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