EXHIBIT 10.1
EXECUTION COPY
REVENUE SHARING AGREEMENT
This Revenue Sharing
Agreement (this
"AGREEMENT") is made and entered
into as of the 5th day of October,
2005,
between New Century
Equity
Holdings
Corp., a Delaware corporation ("NCEH"),
and ACP Investments LP (d/b/a Ascendant
Capital Partners), a Delaware limited partnership ("ASCENDANT").
WITNESSETH:
WHEREAS,
NCEH desires to provide capital to Ascendant in return for an
interest in the revenues
generated by Ascendant and its Investments (as defined
herein) and NCEH also intends to provide marketing services to
Ascendant;
NOW,
THEREFORE,
in
consideration
of the
premises and of the mutual
covenants and
agreements of the parties
herein
contained,
the parties hereto
hereby agree as follows:
Section 1.
DEFINITIONS.
1.1.
"AUM"
shall
mean
assets
that are
managed
by
Ascendant
and its
Investments.
1.2.
"BUDGET" shall mean that certain budget prepared by Ascendant that
is
attached hereto as EXHIBIT 1.2.
1.3. "EFFECTIVE DATE" shall mean October 1, 2005.
1.4.
"FUNDS"
shall
mean:
ACP
Strategic
Opportunities
Fund II, LLC, a
Delaware Limited Liability Company; ACP Advantage Series Strategic
Opportunities
Fund,
a Series of ACP Funds
Trust,
a Delaware
Statutory
Trust;
ACP Adviser
Series
Strategic
Opportunities
Fund, a Series of ACP Funds Trust,
a Delaware
Statutory Trust; ACP Institutional Series Strategic Opportunities
Fund, a Series
of ACP Funds
Trust,
a
Delaware
Statutory
Trust;
and any other
funds
that
Ascendant or any of the Principals forms after the Effective Date.
1.5. "FUND
DOCUMENTS"
shall mean the offering
memorandums,
subscription
agreements and any other marketing materials for the Funds.
1.6. "GENERAL PARTNER" shall mean Ascendant Holdings, LLC.
1.7.
"INVESTMENT ADVISORY COMMITTEE" means a committee that is
responsible
for assuring
that the
Ascendant
portfolio
management
team is following
the
guidelines
specified in the Fund Documents.
The Investment
Advisory Committee
shall consist of Gary Shugrue,
Constantine Catsavis,
Tim Holmes and one person
appointed by NCEH, who shall initially be Steven Pully.
1.8. "INVESTMENTS" means the Funds and any other investments,
subsidiaries,
joint
ventures,
advisory or
subadvisory
arrangements
or other ventures that
Ascendant now or hereafter owns or participates in.
1.9. "NCEH EVENT OF DEFAULT" shall mean either of the following:
(a) NCEH fails to satisfy its obligation to make a Subsequent
Payment
in accordance with Section 2.1 of this Agreement and the conditions
set forth in
Section 2.3(c) of this Agreement have been satisfied.
(b) NCEH files a petition for bankruptcy.
1.10.
ORGANIZATIONAL
DOCUMENTS
shall mean with respect to any entity the
certificate
or
articles
of
incorporation,
by-laws,
certificate
of limited
partnership,
partnership agreement, certificate of formation, limited liability
company agreement and any other organizational document of such
entity.
1.11.
"PRINCIPALS"
shall mean at any time those of the
following who are
employed by Ascendant at such time: Gary Shugrue, Timothy Holmes
and Constantine
L. Catsavis.
1.12.
"PRINCIPALS AGREEMENT" shall mean that certain agreement dated as
of
the date
hereof
by and
among
NCEH
and
Gary
Shugrue,
Timothy
Holmes
and
Constantine
L.
Catsavis
and the
other
parties
thereto,
a copy of which is
attached hereto as EXHIBIT 1.12.
1.13.
"REVENUE
INTEREST"
shall mean the right to receive a payment
from
Ascendant
in cash,
not
later
than
thirty
(30)
days
after the end of each
calendar
quarter
ending
after the
Effective
Date,
equal to the
Applicable
Percentage
(as herein
defined) of the revenues
generated by Ascendant
during
such quarter from AUM or through other sources,
including revenues generated by
or from any Investments,
net of any agreed commissions paid to third parties or
aid to NCEH pursuant to Section 5.6(b).
Except as otherwise provided in Section
5.7, for the purposes of this Agreement,
the "APPLICABLE
PERCENTAGE"
shall be
determined
as
follows:
(a) if the
fair
market
value
of AUM is
less
than
$40,000,000 at the end of any month during such calendar quarter,
the Applicable
Percentage for such quarter shall be 50%; (b) if the fair market
value of AUM is
less than
$200,000,000 at the end of any month during such calendar quarter
and
is
$40,000,000
or
greater
at the end of every
month
during
such
calendar
quarter,
the
Applicable
Percentage
for such quarter shall be 40%; (c) if the
fair market
value of AUM is
$200,000,000
or greater at the end of every month
during such calendar quarter,
the Applicable
Percentage for such quarter shall
be 30%.
Section 2.
SALE AND PURCHASE OF REVENUE INTEREST.
2.1.
SALE AND
PURCHASE
OF REVENUE
INTEREST.
At the Closing (as defined
below) upon the terms and subject to the conditions contained in
this Agreement,
Ascendant shall sell to NCEH and NCEH shall purchase from
Ascendant,
all right,
title and interest in and to the Revenue Interest (the "SALE"),
at an aggregate
purchase price of $1,550,000 (the "PURCHASE PRICE"). The Purchase
Price shall be
payable in four equal
installments
with the first
installment
payable at the
Closing and, subject to the provisions of this Agreement, the
second installment
payable on January 5, 2006, the third
installment
payable on April 5, 2006 and
the fourth
installment
payable on July 5, 2006 (the
second,
third and fourth
installments
being referred to herein as the "SUBSEQUENT
INSTALLMENTS" and the
dates on which the Subsequent
Installments are due being referred herein as the
"PAYMENT DATES").
2.2. CLOSING.
The closing of the Sale shall take place simultaneously with
the execution and delivery of this
Agreement at the offices of Ascendant,
1235
2
Westlakes Drive,
Suite 130, Berwyn, PA 19312 (the "CLOSING") at a time mutually
agreed upon by the parties
hereto and shall be effective for all purposes as of
the Effective Date.
2.3. DELIVERIES AND CONDITIONS.
(a) DELIVERIES OF NCEH. At the Closing, NCEH shall deliver:
(i) $387,500 by wire transfer to an account
designated in writing
by Ascendant.
(ii) A
Certificate
signed by a duly
authorized
officer of NCEH
stating that all of the representations and warranties of NCEH
contained in this
Agreement are true and correct as of the date hereof.
(iii) Such other
documents and
instruments
as may be reasonably
requested by Ascendant or its counsel.
(iv) A copy of the Principals Agreement duly executed by NCEH.
(b) DELIVERIES OF ASCENDANT. At the Closing, Ascendant shall
deliver
(i) A copy of the
Principals
Agreement
duly executed by each of
the Principals and each other limited partner of Ascendant.
(ii)
Certificates
signed by each of the Principals
stating that
all of the
representations
and
warranties
of
Ascendant
contained
in
this
Agreement are true and correct as of the date hereof.
(iii) Such other
documents and
instruments
as may be reasonably
requested by NCEH or its counsel.
(c) CONDITIONS TO SUBSEQUENT
INSTALLMENTS.
The obligation of NCEH to
pay each of the Subsequent
Installments
shall be subject to the fulfillment on
or before the Payment
Date for such
Subsequent
Installment
of the
following
conditions:
(i) The
representations
and warranties of Ascendant contained in
this
Agreement
are true and correct on and as of such
Payment
Date as though
such
representations
and
warranties
had been made on and as of such
Payment
Date.
(ii)
Ascendant
shall
have
performed
and
complied
with
all
agreements,
covenants,
obligations and conditions
contained in this Agreement
that it is required to perform or comply with at or prior to such
Payment
Date
and shall not otherwise be in breach of this Agreement.
(iii)
Ascendant
shall have delivered to NCEH at or prior to such
Payment Date (x) certificates signed by each of the Principals
certifying to the
matters set forth in clauses (i) and (ii) above and (y) such other
documents and
instruments as may be reasonably requested by NCEH or its counsel.
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Section 3.
REPRESENTATIONS AND WARRANTIES OF ASCENDANT.
Ascendant represents and warrants to NCEH that:
3.1.
CORPORATE
EXISTENCE
AND POWER.
Ascendant
and each of the entities
listed on SCHEDULE 3.1 are duly organized, validly existing and in
good standing
under
the
laws of the
jurisdiction
under
which it was
formed,
and has all
requisite corporate power and authority to own, lease and operate
its properties
and assets and to carry on its business as presently being
conducted.
3.2.
CORPORATE
AUTHORIZATION;
APPROVALS.
The
execution,
delivery
and
performance
by
Ascendant
and the General
Partner of this
Agreement
and the
consummation
by
Ascendant
and
the
General
Partner
of
the
transactions
contemplated hereby are within Ascendant's and the General
Partner's partnership
or
limited
liability
company
powers
and have
been duly
authorized
by all
necessary
partnership or limited liability
company action.
Assuming that this
Agreement
constitutes the valid and binding
obligation of NCEH, this Agreement
constitutes a valid and binding
agreement of Ascendant and the General Partner,
enforceable
in
accordance
with its terms
(except
as
enforceability
may be
limited
by
applicable
bankruptcy,
insolvency,
reorganization,
moratorium,
fraudulent
transfer
and similar laws of general
applicability
relating to or
affecting
creditors'
rights,
or
by
general
equity
principles,
including
principles of commercial reasonableness, good faith and fair
dealing).
3.3. GOVERNMENTAL AUTHORIZATION, REGISTRATION, ETC. The execution,
delivery
and performance by Ascendant of this Agreement and the consummation
by Ascendant
of
the
transactions
contemplated
hereby
do
not
require
any
filing
or
registration
with,
notification to, or authorization,
consent or approval of,
any federal,
state or local governmental
authority,
court,
administrative or
regulatory agency or commission (each a "GOVERNMENTAL ENTITY").
3.4.
NON-CONTRAVENTION;
REAL
PROPERTY.
The
execution,
delivery
and
performance by Ascendant of this Agreement and the
consummation by Ascendant of
the transactions contemplated hereby:
(a) do not contravene or conflict with the
Organizational
Documents
of Ascendant or the General Partner or any of the Investments.
(b) to Ascendant's knowledge,
violate,
conflict with or result in a
breach of any law
applicable to Ascendant or any of its
Investments or assets,
or
(c) violate, result in a breach of, constitute a default (or an
event
which, with notice or lapse of time, or both, would constitute a
default) under,
result in the termination of, accelerate the performance
required by, result in
the creation or imposition
of any lien upon any of the
properties or assets of
Ascendant under, or require any consent,
approval,
notice or filing under, any
Ascendant Contracts (as defined in Section 3.1(a)).
Neither Ascendant nor any of its subsidiaries owns any real
property.
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3.5. OWNERSHIP OF ASCENDANT.
(a) All outstanding partnership interests of Ascendant have been
duly
authorized and validly issued,
and are fully paid,
non-assessable
and free of
preemptive
rights. The ownership of Ascendant and the General Partner is as
set
forth in SCHEDULE 3.5.
(b) Except as
described
in
subsection
(a)
above,
as of the date
hereof there are no outstanding:
(i) equity interests in Ascendant or its subsidiaries;
(ii) securities of Ascendant or its subsidiaries
convertible into
or exchangeable for equity interests in Ascendant or its
subsidiaries; or
(iii) options,
warrants or other rights to acquire from Ascendant
or its
subsidiaries,
equity
interests in, or securities
convertible
into or
exchangeable for equity interests in, Ascendant or its
subsidiaries.
There are
no
outstanding
obligations
of Ascendant or its
subsidiaries
to
repurchase,
redeem or otherwise acquire any of the outstanding equity interests
therein.
3.6. INVESTMENTS.
(a)
SCHEDULE
3.6 sets
forth a list of all
Investments
and
their
respective
jurisdictions
of incorporation or organization and includes a list,
by Fund, of each
underlying fund in which any of the Funds has invested and the
aggregate
amount
invested
by such Fund in such
underlying
fund.
All of the
Investments
are owned by
Ascendant,
directly or
indirectly,
as set forth in
SCHEDULE
3.6,
free and clear of any liens and free of any other
limitation or
restriction,
including any limitation or restriction on the right to vote, sell
or otherwise
dispose of such capital stock or other
ownership
interest (other
than any of the foregoing
that may exist under the
Securities Act or any state
securities laws).
(b)
All
ownership
interests
in each
Investment
have
been
duly
authorized and validly issued,
and are fully paid,
non-assessable
and free of
preemptive rights.
(c) Except as set forth in SCHEDULE 3.6, none of the
Investments
of
Ascendant owns or controls directly or indirectly, or has any
direct or indirect
equity
participation
in,
any
corporation,
partnership,
limited
liability
company, joint venture or other entity.
3.7.
ASCENDANT SEC DOCUMENTS.
Each of Ascendant and its
Investments
has
filed all forms,
reports and documents
with the SEC required to be filed by it
prior
to
the
date
of
this
Agreement
(together
with
the
amendments
and
supplements
to such
filings
filed
prior to the date of this
Agreement,
the
"ASCENDANT SEC DOCUMENTS").
Each Ascendant SEC Document,
as of its filing date
(or if amended, as of the date of its last amendment) complied as
to form in all
material
respects with the
applicable
requirements
of the
Securities Act of
1933,
as amended
(the
"SECURITIES
ACT"),
the Exchange
Act, the
Investment
Company Act of 1940, as amended (the "INVESTMENT
COMPANY ACT") and the Advisers
Act, as the case may be. No Ascendant SEC Document, as of its
filing date (or as
of the date it became effective if filed under the Securities Act,
or if amended
or supplemented, as of the date of its last amendment or
supplement),
contained
5
any untrue
statement of a material
fact or omitted to state any material
fact
required to be stated therein or necessary in order to make the
statements
made
therein,
in the light of the
circumstances
under
which they were
made,
not
misleading.
No subsidiary of Ascendant is required to file any forms,
reports,
or other documents pursuant to the Securities Act or the Exchange
Act.
3.8. FINANCIAL STATEMENTS; LIABILITIES.
(a)
Each of the
consolidated
balance
sheets
of each of the
Funds
included in the Ascendant SEC Documents fairly presents in all
material respects
the consolidated
financial position of such Fund and its subsidiaries as of the
respective date thereof, and the other related consolidated
financial statements
(including
the notes thereto)
included
therein fairly present in all material
respects
the
results
of
operations
and
cash
flows
of such
Fund
and its
subsidiaries for the respective
periods or as of the respective dates set forth
therein (collectively,
the "FUND FINANCIAL
STATEMENTS").
As of the respective
filing date for the applicable
Ascendant SEC Document in which it was included,
each of the Fund Financial Statements
(including the notes thereto) complied in
all material respects with the then applicable
accounting
requirements and the
published
rules
and
regulations
of the SEC
with
respect
thereto,
and was
prepared in accordance
with
accounting
principles
generally
accepted in the
United States ("GAAP") applied on a consistent basis during the
periods or as of
the respective dates involved, except as otherwise noted therein
and subject, in
the
case
of
unaudited
interim
financial
statements,
to
normal
year-end
adjustments.
(b) Attached
hereto as EXHIBIT 3.8(b) are the unaudited
consolidated
balance sheet and statements of operations
and retained
earnings and cash flow
of
Ascendant as of and for the year ended
December 31, 2004 and the
unaudited
consolidated
balance sheet and statements of operations
and retained
earnings
and cash
flow of
Ascendant
of and for the six
months
ended
June
30,
2005
(collectively,
the "ASCENDANT FINANCIAL
STATEMENTS").
The Ascendant Financial
Statements
are
complete
and correct in all
material
respects
and have been
prepared in accordance
with GAAP on a consistent
basis
throughout the periods
indicated.
The
Ascendant
Financial
Statements
fairly
present the financial
condition
and results of
operations
of
Ascendant as of the dates and for the
periods
indicated
therein,
subject to normal year end
adjustments
which are
neither
individually
nor in the aggregate
expected to be material.
Except as
reflected in the
Ascendant
Financial
Statements or disclosed on SCHEDULE 3.9,
Ascendant has no material debts,
liabilities,
guarantees or other obligations,
whether accrued, absolute, contingent or otherwise.
(c) Ascendant
has delivered to NCEH an estimated
balance sheet as of
September 30, 2005, which represents Ascendant's reasonable best
estimate of the
expected assets and liabilities of Ascendant as of such date.
3.9. ABSENCE OF CERTAIN CHANGES. (a) Since December 31, 2004,
Ascendant and
each of its
subsidiaries
has
conducted
its business in the
ordinary
course
consistent
with past practice and,
except as disclosed on SCHEDULE 3.9,
there
has not been:
(i) any change in the assets, liabilities, condition (financial or
otherwise),
affairs, earnings, business,
operations, or prospects of Ascendant
from that
reflected in the latest
balance sheet
included in the Ascendant SEC
6
Documents,
except for changes in the ordinary course of business which have
not
been, either individually or in the aggregate, materially adverse;
(ii) any change in the
liabilities
or
obligations of Ascendant,
contingent
or
otherwise,
whether
due or to
become
due,
whether
by way of
guaranty,
endorsement,
indemnity,
warranty, or otherwise,
except liabilities
incurred
in the
ordinary
course of
business,
none of which
materially
and
adversely affects the business,
prospects,
condition,
affairs,
properties or
assets of Ascendant;
(iii) any change in the accounting
methods or practices
followed
by Ascendant;
(iv) any
issuance of equity
interests
in
Ascendant or options,
warrants,
or rights or agreements or
commitments to purchase or issue any such
interests or grant such options,
warrants or rights, except for those issuances
contemplated or permitted by this Agreement or the Principals
Agreement; or
(v) any
damage,
destruction
or loss,
whether or not covered by
insurance,
materially
and
adversely
affecting the
properties,
operation or
business of Ascendant;
(vi) any waiver by Ascendant of a valuable
right or of a material
debt owed to it;
(vii)
any
loans
made by
Ascendant
to any of its
partners
or
employees or members or employees of the General
Partner other than advances of
expenses made in the ordinary course of business;
(viii) any sale,
transfer,
or lease of any of Ascendant's assets
except in the
ordinary
course of business or any mortgage or pledge of or lien
imposed upon any of Ascendant's assets;
(ix) to the best of
Ascendant's
knowledge,
any
other
event or
condition of any
character
that has or could
reasonably be expected to have a
material
adverse
effect
on
the
business,
prospects,
condition,
affairs,
operations, properties or assets of Ascendant; or
(x) any
agreement
by
Ascendant
to do or enter
into any of the
foregoing.
3.10. LITIGATION AND LEGAL COMPLIANCE.
(a) As of the date hereof,
each of Ascendant and the
Investments has
no notice of any claims, actions,
suits,
proceedings or investigations pending
or
threatened
by or
against
Ascendant
or any of its
subsidiaries.
Neither
Ascendant nor any of its
Investments
is subject to any
outstanding
judgment,
injunction,
order or decree of any
Governmental
Entity,
or any
judicial
or
administrative
actions,
proceedings or investigations
pending, or threatened,
which question the validity of this Agreement or any action taken
or to be taken
by Ascendant in connection with this Agreement.
7
(b) Ascendant and its
Investments are in compliance with all federal,
state and local laws, statutes, rules, regulations,
ordinances, permits, orders
or writs,
including
without
limitation
the Advisers
Act and the
Investment
Company Act and all rules promulgated thereunder.
(c) All disclosures required to be made to investors in any
Investment
have been made and such
disclosures
did not contain any untrue
statement of a
material fact or omit to state any material
fact required to be stated
therein
or necessary in order to make the statements
made therein,
in the light of the
circumstances under which they were made, not misleading.
(d) Each of Ascendant and its Investments
has all permits,
licenses,
approvals,
authorizations
of, and
registrations
with and under all laws, and
from all
Governmental
Entities
required for Ascendant and its subsidiaries to
carry on their respective
businesses as currently
conducted,
except where the
failure
to
have
any
such
permit,
license,
approval,
authorization
or
registration
would not have a
material
adverse
affect on
Ascendant
or such
Investment.
3.11. CONTRACTS.
(a) SCHEDULE
3.11(a)
contains a description of each of the following
to which Ascendant or any of its Investments is a party (i) that
requires active
performance
by
Ascendant
as of the
date
hereof
or (ii)
that is
otherwise
material to Ascendant, whether active or not (the "ASCENDANT
CONTRACTS"):
(i) all agreements, contracts, leases or binding commitments;
(ii) any indenture,
mortgage,
promissory note, loan agreement or
other
agreement or commitment for the borrowing of money by Ascendant or
any of
its subsidiaries;
(iii) any lease,
sublease or other agreement pursuant to which it
is a lessee of or holds or operates any real or personal
property
owned by any
third party;
(iv) any option or other
executory
agreement or other
agreement
with
remaining
obligations
thereunder
to purchase or acquire any interest in
assets or property;
(v) any option or other
executory
agreement
or other
agreement
with
remaining
obligations
thereunder
to sell or dispose of any
interest in
assets
or
property
other
than
equity
option
agreements
with
employees,
independent
contractors
and directors
pursuant to
Ascendant's
equity option
plans;
(vi) any contract or agreement creating a joint venture or similar
arrangement by which any assets, properties, rights, or business of
Ascendant or
any Investment is materially affected;
(vii) any guaranty,
keep well, make whole or similar agreement of
or with respect to the obligations of third parties;
(viii) any agreement which
restricts
Ascendant or any Investment
from doing business anywhere in the world or limits the business in
which it may
engage;
8
(ix) any
agreement or
arrangement
under which
Ascendant or any
Investment
agrees to
indemnify
any
person or to share tax
liability
of any
person;
(x) any license of material
Ascendant
Intellectual
Property (as
defined in Section 3.13)
(including use of the name of Ascendant or any similar
name) of or by Ascendant other than in the ordinary course of
business;
(xi) any contracts for insurance;
(xii) any
contract or
agreement
under which
Ascendant
has the
obligation to issue or sell any security; and
(xiii) the employment agreements between Ascendant and each of
