NON-COMPETE AGREEMENT
This NON-COMPETE AGREEMENT (this "Agreement") is entered
into as of September 23, 1997, between XXXX Investment Services,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxxxx ("Individual").
RECITALS
A. PMC International, Inc. ("PMCI") has entered
into a stock purchase agreement, dated as of July 25, 1997 (the
"Stock Purchase Agreement"), pursuant to which PMCI will acquire
all of the outstanding capital stock of the Company (the
"Acquisition").
B. The Company and Individual desire to enter into
this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual
covenants and conditions contained herein and other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Company and Individual hereby agree to
the following terms to protect the Company, while not
unreasonably restricting Individual after he terminates his
affiliation with the Company:
1. Acknowledgments.
(a) Individual specifically acknowledges that
he has been a member of the leadership team of the Company and
through his affiliation with the Company he has become privy to
substantial confidential and proprietary information of the
Company. Because of Individual's expertise and familiarity with
the Company, including the Company's confidential and proprietary
information, it would be harmful to the Company for Individual,
after he terminates his affiliation with the Company, immediately
to begin competing with the Company. (b) Individual also
specifically acknowledges that after he terminates his
affiliation with the Company he will be able to earn a livelihood
without violating the terms of this Agreement. Further,
Individual acknowledges that his representation of his ability to
earn a livelihood without violating the terms of this Agreement
is a material condition to the Company's entering this Agreement
with him.
2. Restrictions.
(a) Restricted Period. In consideration
of the benefits to be received by Individual as a result of the
Acquisition, Individual agrees that during the period beginning
on the date of the closing of the Acquisition and ending on the
two-year anniversary of the payment by PMCI of the Final Purchase
Price Adjustment pursuant to Section 2.3(d) of the
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Stock Purchase Agreement (the "Restricted Period") he
will not (i) Participate In (as hereinafter defined) any
Competitive Advisory Business (as hereinafter defined); (ii)
directly or indirectly cause, or attempt to cause, to leave the
employ of the Company any employee of the Company that is an
employee of the Company at any time during the period beginning
six months before the date of this Agreement and ending at the
end of the Restricted Period; (iii) directly or indirectly
solicit any customer of the Company as to which Individual
obtained knowledge during his affiliation with the Company as a
member of the leadership team of the Company; (iv) knowingly or
recklessly interfere or attempt to interfere with any transaction
in which the Company was involved during the term of this
Agreement; or (v) in any other way knowingly or recklessly
interfere with the relationship between the Company and any of
its employees, customers or suppliers.
(b) Participate In. For purposes of this
Agreement, "Participate In" means to directly or indirectly,
individually or with or through any other person or entity,
manage, operate, control or participate in the management,
operation or control of, or be connected to as a director,
officer, employee, partner, consultant, agent or independent
contractor, or acquiesce in the use of his name in.
(c) Competitive Advisory Business. For purposes
of this Agreement, "Competitive Advisory Business" means
services, products or software in the wrap-fee or privately
managed account business (whether using mutual funds or separate
accounts) and/or services, products or software in the
performance reporting business to the extent such services,
products or software are provided to or through financial
intermediaries, including, but not limited to, investment
advisors, broker-dealers, banks, insurance companies, accounting
firms and financial planners for use in providing services to the
retail and small institutional accounts (typically under $30
million in assets) of such financial intermediaries. The term
"Competitive Advisory Business" includes the offering of any of
the following products or services through financial
intermediaries, either alone or in combination, whether or not
such products or services are generally or customarily understood
to be included in the term "wrap-fee" or "privately managed
account" business, and whether or not such products or services
are offered for a single fee or are charged for separately: (1)
investment recommendations or portfolio management services based
on or tailored to the specific investment needs and/or risk
tolerance of the client whose assets are being managed, (2)
access to the asset management services of separate account
managers, (3) automated trading services that involve the
exercise of discretionary authority, a limited power of attorney
or similar authorization granted by an asset management client
and (4) the preparation of reports or statements that show the
securities transactions in a client account and/or calculate,
display or analyze the performance or investments held in a
client account. The term "Competitive Advisory Business" does not
include personally providing investment advisory products or
services directly to clients through a financial planning,
investment management or investment consulting firm, as long as
either (1) at least 75% of the clients of such firm have assets
under management or under advisement by such firm in excess of
$30 million, or (2) such clients are not primarily secured by
such firm through referrals or solicitations by individuals not
employed by such firm who derive a fee or other compensation for
such referrals or solicitations. The term "Competitive Advisory
Business" specifically includes,
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but is not limited to, any investment advisory services or
products provided to financial intermediaries by Xxxxxxxx
Financial Services, Inc.; Xxxxxxxxxx Xxxxx Xxxxx Advisory
Services; Advisory Consulting Group; SEI Investments; Xxxxxxx
Capital; Meridian Investment Management; Xxxxx Xxxxxxx Company
and Xxxxxx Associates, Inc. The term "Competitive Advisory
Business" also includes "turn key asset management programs."
Notwithstanding any of the foregoing, the parties hereto
understand and agree that Individual is expected to be employed
by LCG Associates, Inc. and its parent LCG Holdings (collectively
referred to in this paragraph as "LCG"), a firm that provides
investment consulting to qualified plans and institutional
investors. The parties hereto agree that the Individual may be
employed by LCG and that such employment in and of itself will
not be a violation of this Agreement so long as LCG does not
engage in a Competitive Advisory Business.
(d) Limitations. The restrictions imposed by
this Agreement are limited to the geographical areas in which the
Company is conducting its business enterprise and business
operations at the date hereof, which consists of the United
States and its territories and possessions. The restriction upon
solicitation of customers imposed by Section 2(a)(iii) is limited
to customers of the Company at the date hereof.
3. Effective Date. Subject to Section 5(i), this
Agreement will become effective on the date hereof.
4. Injunctive Relief. Individual acknowledges that the
breach or threatened breach by Individual of any of the
provisions of Section 2 would cause the Company irreparable harm.
Upon the breach or threatened breach of any of the provisions of
Section 2, the Company will be entitled to an injunction, without
bond, restraining Individual from committing such breach. This
right will not be construed to limit the Company's ability to
obtain any other remedies available to it for such breach or
threatened breach, including the recovery of damages.
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5. General Provisions.
(a) Remedies. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a
party will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy. No failure or delay on
the part of any party hereto in the exercise of any right
hereunder will impair such right or be construed to be a waiver
of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise
thereof or of any other right.
(b) Governing Law. This Agreement, its
interpretation, and the legal relations between the parties
hereto will be governed by and construed in accordance with the
laws of the State of Colorado, without regard to the conflict of
laws rules thereof.
(c) Severability. If any provision of this
Agreement is held to be invalid, illegal or unenforceable in any
jurisdiction by any court of competent jurisdiction, then (i)
such invalidity, illegality or unenforceability will not affect
such provision with respect to any other jurisdiction, (ii) such
invalidity, illegality or unenforceability will not affect any
other provision of this Agreement with respect to such
jurisdiction, and (iii) such court may modify such provision to
make it valid, legal, and enforceable in such jurisdiction, and
such provision will thereafter be enforced in its modified form
in such jurisdiction.
(d) Assignment; Binding Effect. Neither this
Agreement nor any of the rights, benefits or obligations
hereunder may be assigned by any party hereto (whether by
operation of law or otherwise) without the prior written consent
of the other party hereto. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their
respective legal representatives, heirs, and permitted successors
and assigns.
(e) Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto and
supersedes all prior agreements and understandings, whether oral
or written, between the parties hereto with respect to the
subject matter hereof.
(f) Amendment. This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties hereto.
(g) Headings; "Including". When a reference is
made in this Agreement to a section, such reference is to a
section of this Agreement unless otherwise indicated. As used in
this Agreement, the words "include," "includes" and "including"
when used herein will be deemed in each case to be followed by
the words "without limitation." The section headings contained in
this Agreement are for reference purposes only and will not
affect in any way the meaning or interpretation of this
Agreement. Whenever the context may require, each pronoun
includes the corresponding masculine, feminine and neuter forms.
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(h) Representation by Counsel. The parties
hereto acknowledge that they have had the opportunity to consult
with counsel and have done so to the extent they deemed
appropriate during the negotiation, preparation and execution of
this Agreement.
(i) Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to be an
original, and all of which together shall be deemed to be one
and the same instrument.
(j) Enforcement Costs. In the event of any
proceeding to enforce this Agreement, the prevailing party will
be entitled to receive from the other party all reasonable costs
and expenses, including the reasonable fees of attorneys,
accountants and other experts, incurred by the prevailing party
in investigating and prosecuting (or defending) such action at
trial or upon any appeal.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
XXXX INVESTMENT SERVICES, INC.
By: /s/
Name:
Title:
INDIVIDUAL
/s/
Xxxxxxx X. Xxxxxxxxx
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