Revenue Sharing Agreement between New Century Equity Holdings Corp. and ACP Investments LP (Ascendant Capital Partners)

 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. 3  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. 4  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 the Principals (the "EMPLOYMENT AGREEMENTS"). (b) Ascendant has delivered to NCEH true and complete copies of each of the Employment Agreements. (c) Each Ascendant Contract is a valid, binding and enforceable obligation of Ascendant and, to Ascendant's knowledge, of the other party or parties thereto (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), and each Ascendant Contract is in full force and effect. (d) Neither Ascendant, any Investment nor, to Ascendant's knowledge, any other party thereto, is in breach of or default under any term of any Ascendant Contract or has repudiated any term of any Ascendant Contract except as set forth in SCHEDULE 3.11(a). (e) Ascendant has not received any written notice of termination or cancellation with respect to any Ascendant Contract, and no other party to a Ascendant Contract plans to terminate or cancel any such agreement. 3.12. BUDGET. The Budget was prepared using the reasonable best efforts of Ascendant and represents Ascendant's reasonable best estimate of its expected revenues and expenses for the periods and expected cash balances at the times covered thereby. 3.13. INTELLECTUAL PROPERTY. Each of Ascendant and its Investments owns all right, title and interest in and to its trademarks, service marks, trade names, copyrights, patents and other intellectual property (collectively, "ASCENDANT INTELLECTUAL PROPERTY") including any registrations therefor and the goodwill associated therewith and considers same adequate to carry on the business of Ascendant or such Investment. 3.14. TITLE TO PROPERTY AND ASSETS. Ascendant has good and marketable title to its property and assets free and clear of all mortgages, liens, loans, and encumbrances, except such encumbrances and liens which arise in the ordinary course of business and do not materially impair Ascendant's ownership or use of such property or assets. With respect to the property and assets it leases, Ascendant is in compliance with such leases and, to its knowledge, holds a valid 9  leasehold interest free of any liens, claims, or encumbrances. All of Ascendant's properties and assets are, in all material respects, in good operating and usable condition, subject to normal wear and tear. 3.15. TAX MATTERS. Ascendant (i) has timely filed all tax returns that are required to have been filed by it with all appropriate Governmental Entities (and all such returns are complete and fairly reflect its operations for tax purposes in all material respects); and (ii) has timely paid all taxes owed or assessments by it (other than taxes the validity of which are being contested in good faith by appropriate proceedings). The assessment of any additional material taxes for periods for which returns have been filed is not expected to exceed the recorded liability therefor and, to Ascendant's knowledge, there are no material unresolved questions or claims concerning Ascendant's tax liability. To the best of Ascendant's knowledge and belief, Ascendant's tax returns have not been reviewed or audited by any taxing authority. There is no pending dispute with any taxing authority relating to any of said returns which, if determined adversely to Ascendant, would result in the assertion by any taxing authority of any valid deficiency in a material amount for taxes. 3.16. DISCLOSURE. Ascendant has provided NCEH with all information that NCEH has requested for deciding whether to purchase the Revenue Interest and all information that Ascendant believes is material and reasonably necessary to enable NCEH to make such decision. Neither this Agreement, nor any other statements or certificates made or delivered in connection herewith, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading in light of the circumstances in which they were made. Section 4. REPRESENTATIONS AND WARRANTIES OF NCEH. NCEH represents and warrants to Ascendant that: 4.1. CORPORATE EXISTENCE AND POWER. NCEH is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, 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. 4.2. CORPORATE AUTHORIZATION; APPROVALS. The execution, delivery and performance by NCEH of this Agreement and the consummation by NCEH of the transactions contemplated hereby are within NCEH's corporate powers and have been duly authorized by all necessary corporate action. Assuming that this Agreement constitutes the valid and binding obligation of Ascendant, this Agreement constitutes a valid and binding agreement of NCEH, 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). 4.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by NCEH of this Agreement and the consummation by NCEH of the transactions contemplated hereby do not require any filing or registration with, notification 10  to, or authorization, consent or approval of any Governmental Entity, other than compliance with any applicable requirements of the Exchange Act following the Closing. 4.4. PURCHASE FOR OWN ACCOUNT. The Revenue Interest acquired by NCEH hereunder will be acquired for investment for NCEH's own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the Securities Act, and NCEH has no present intention of selling, granting any participation in, or otherwise distributing the same. 4.5. DISCLOSURE OF INFORMATION. Without in any way limiting NCEH's rights and remedies under the Agreement, NCEH acknowledges that it has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Revenue Interest. Section 5. COVENANTS. 5.1. PAYMENTS. Ascendant shall pay to NCEH all amounts payable in respect of the Revenue Interest from and after the Effective Date as promptly as practicable and in any event no later than thirty (30) days following the end of any calendar quarter and all amounts payable with respect to the provision by NCEH of marketing services in accordance with any agreement of the parties concerning the provision of such services. 5.2. REFUND. If (a) Ascendant materially breaches any of its obligations under this Agreement (with any breach of Section 5.9 being considered a material breach) and such breach is not cured within forty-five (45) days after notice of such breach is given to Ascendant or (b) Ascendant ceases normal business operations or engages in any effort to close the Funds or (c) a petition in bankruptcy is filed by or against Ascendant, then in any such case Ascendant shall refund to NCEH an amount equal to all payments theretofore made on account of the Purchase Price not later than thirty (30) days after NCEH gives Ascendant a written notice requesting such refund and Ascendant shall have no further obligation to make payments in respect of the Purchase Price thereafter. Such refund shall not reduce the Revenue Interest acquired by NCEH hereunder. 5.3. FINANCIAL STATEMENTS. Ascendant shall furnish or cause to be furnished to NCEH: (a) as soon as reasonably possible, and in any event within 120 days after the end of each fiscal year of Ascendant, the unaudited consolidated balance sheet of Ascendant as at the end of such fiscal year, and unaudited consolidated statements of operations and retained earnings and cash flow of Ascendant for such fiscal year, all in reasonable detail, and prepared in accordance with GAAP; (b) as soon as reasonably possible, and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of Ascendant, the unaudited consolidated balance sheet and statements of operations and retained earnings and cash flow of Ascendant for such quarter, all in reasonable detail, prepared in accordance with GAAP, and certified to be complete and correct in all material respects (subject to year-end adjustments) by the General Partner of Ascendant; 11  (c) as soon as reasonably possible, and in any event within 30 days after the end of each calendar month, a balance sheet, profit and loss statement, cash flow statement and operating report relating to the operations of Ascendant for such calendar month; (d) as soon as reasonably possible, and in any event within 120 days after the end of each fiscal year of each Investment, the audited consolidated balance sheet of such Investment as at the end of such fiscal year, and audited consolidated statements of operations and retained earnings and cash flow of such Investment for such fiscal year, all in reasonable detail, and prepared in accordance with GAAP, and accompanied by the unqualified report thereon of a nationally recognized independent certified public accountant firm reasonably satisfactory to NCEH; (e) as soon as reasonably possible, and in any event within 45 days after the end of the second fiscal quarter of each fiscal year of each Investment, the unaudited consolidated balance sheet and statements of operations and retained earnings and cash flow of such Investment for the six months of such fiscal year, all in reasonable detail, prepared in accordance with GAAP, and certified to be complete and correct in all material respects (subject to year-end adjustments) by the General Partner of Ascendant or the chief executive officer of such Investment; (f) as soon as reasonably possible, and in any event within 30 days after the end of each calendar month, a balance sheet, profit and loss statement, cash flow statement and operating report relating to the operations of each Investment for such calendar month; (g) promptly after the preparation thereof, and in any case not later than 30 days prior to the beginning of each fiscal year of Ascendant, Ascendant's budget, business plan and financial forecasts, including a projected balance sheet, profit and loss statement and cash flow statement, for the forthcoming year, and any other similar reports customarily prepared by the management of Ascendant for internal use; (h) promptly after receipt, all reports delivered to Ascendant by its accountants; (i) promptly after the commencement or threatened commencement thereof, notice of all actions, suits, investigations, and proceedings before any court or governmental department, arbitration panel, commission, board, bureau, agency or instrumentality, domestic or foreign, materially affecting Ascendant or any of its subsidiaries other than ordinary and routine litigation covered under the limits of existing insurance policies; (j) promptly after the sending or filing thereof, copies of all reports that Ascendant or any of its Investments sends to its equity holders or investors, and copies of all regular, periodic and special reports, and all registration statements, if any, which Ascendant may file with the Securities and Exchange Commission or any other Governmental Entity; (k) promptly, copies of minutes of meetings of the Board of Directors, Board of Managers or comparable governing body of any the Investments and of any press releases issued by Ascendant or any of the Investments; 12  (l) promptly, copies of all amendments to any of the Organizational Documents of Ascendant or any of its Investments; and (m) such other information regarding the business, affairs and condition of Ascendant or its Investments as NCEH may from time to time reasonably request. 5.4. ACCESS TO INFORMATION. At any reasonable time and from time to time, upon reasonable notice, Ascendant shall permit NCEH, and/or any agent or representative thereof, to examine, inspect, audit and make copies of and abstracts from the books and records of, and visit and inspect the properties and assets of, Ascendant and to discuss the business affairs, marketing, finances and accounts of Ascendant with any of its partners, officers and directors. Ascendant shall furnish to NCEH, promptly upon request, copies of such financial, operating and marketing data and other information as reasonably requested by NCEH. Upon three business days' prior notice to Ascendant, NCEH shall have the right to confer in its discretion with the independent certified public accountants of Ascendant at any time during normal business hours upon any matter involving the financial condition of Ascendant or any Investment and such accountants are hereby irrevocably authorized to fully discuss with and disclose to NCEH all such matters. NCEH, by its exercise of the rights conferred by this Section 5.4, agrees to maintain the confidentiality of any information received by it pursuant to this Section 5.4, until such information becomes public or is otherwise no longer confidential, unless such information becomes public through action or omission of NCEH, provided, however, that NCEH may disclose any information received by it pursuant to this Section 5.4 as required by law and share such information with its partners, if any, and with its legal, accounting, financial and other advisors and representatives. 5.5. LEGAL EXISTENCE, COMPLIANCE, ETC. (a) Ascendant shall maintain its existence as a limited partnership duly organized, validly existing and in good standing under the laws of the state of its organization. (b) Ascendant shall conduct its business in compliance in all material respects with all permits and licenses issued by, and all statutes, rules, regulations and orders of, and all restrictions imposed by, all governmental authorities, domestic or foreign, federal or state, applicable to the conduct of its business and the ownership of its property (including, without limitation, applicable statutes, rules, regulations, orders and restrictions relating to the rendering of investment advice and the issuance and sale of securities). (c) Ascendant shall conduct its business in compliance in all material respects with all licenses, agreements and contracts to which it is a party. (d) Ascendant shall keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all of its financial transactions. (e) Ascendant shall maintain, keep, and preserve all of its material properties (tangible and intangible) necessary in the proper conduct of its business in good working order and condition, ordinary wear and tear expected. 13  (f) Ascendant shall maintain, or cause to be maintained, in full force and effect, with financially sound and reputable insurers, workers' compensation, fire, casualty, and liability insurance, with extended coverage, and other insurance all in such amounts and covering such risks as shall be reasonable and prudent in view of the business and operations of Ascendant and in any event no less extensive than is customarily maintained by companies of established reputation engaged in the same or similar businesses. 5.6. MARKETING SERVICES. (a) NCEH shall provide marketing services to Ascendant by consulting and reviewing with Ascendant its marketing materials, distribution channels and other related matters, on such terms as NCEH and Ascendant may agree. (b) To the extent permitted by applicable law, for any account identified in writing by NCEH and accepted by Ascendant, Ascendant agrees to pay to or at the direction of NCEH a fee of 20% of all fees received by Ascendant with respect to such account for as long as such account is invested with Ascendant or with any Investment, PROVIDED that an account that has not yielded an investment with Ascendant or with an Investment for eighteen months after being identified to Ascendant by NCEH must be accepted again in writing by Ascendant to remain subject to this provision. NCEH shall be entitled to assign its rights under this Section 5.6(b) with the prior consent of Ascendant which consent shall not be unreasonably withheld, delayed or conditioned. (c) Ascendant shall be responsible for assuring that, and shall cause, all offering and marketing materials to fully disclose, to the extent required by applicable law, the rights and obligations of the parties to this Agreement and any marketing arrangements between them. 5.7. REPURCHASE OF REVENUE INTEREST. (a) If for any calendar quarter starting after the second anniversary of the Effective Date the Applicable Percentage of the Revenue Interest is equal to 30% (a "QUALIFYING QUARTER"), Ascendant shall have the right to repurchase from NCEH a portion of the Revenue Interest so that, after giving effect to such repurchase, NCEH shall hold the Residual Revenue Interest (as defined below) for a repurchase price that equals the sum of (x) the Purchase Price actually paid to Ascendant plus (y) a 25% annualized return on each installment of the Purchase Price so paid, compounded annually, from the date of payment of such installment to the date of payment of the repurchase price. For purposes of this Agreement the term "RESIDUAL REVENUE INTEREST" shall mean a Revenue Interest that has an Applicable Percentage of: (i) 10% for the period from the date on which the repurchase resulting in NCEH holding the Residual Interest becomes effective (the "REPURCHASE EFFECTIVE DATE") until the day before the first anniversary of the Repurchase Effective Date; (ii) 9% for the period from the first anniversary of the Repurchase Effective Date to the day before the second anniversary of the Repurchase Effective Date; (iii) 8% for the period from the second anniversary of the Repurchase Effective Date to the day before the third anniversary of the Repurchase Effective Date; (iv) 7% for the period from the third anniversary of the Repurchase Effective Date to the day before the fourth anniversary of the Repurchase Effective Date; (v) 6% for the period from the 14  fourth anniversary of the Repurchase Effective Date to the day before the fifth anniversary of the Repurchase Effective Date; and (vi) 5% thereafter. Ascendant's right to repurchase a portion of the Revenue Interest under this Section 5.7(a) shall be exercisable by giving NCEH written notice of exercise not later than sixty (60) days after the end of any Qualifying Quarter. The repurchase price shall be paid by wire transfer to an account designated by NCEH, or in the absence of such designation by certified check made payable to NCEH, not less than thirty (30) nor more than sixty (60) days after the notice of exercise is given and upon such payment the repurchase shall be effective. (b) In the event of an NCEH Event of Default that is not cured within thirty (30) days after Ascendant gives written notice thereof to NCEH, Ascendant shall have the right to repurchase the entire Revenue Interest for a repurchase price that equals the sum of (i) the aggregate installments of Purchase Price actually paid to Ascendant plus (ii) a 10% annualized return on the "unpaid balance" from time to time of each installment of Purchase Price, compounded annually, from the date of payment of such installment by NCEH to the date such installment is deemed "repaid" in full as provided herein. Ascendant's right to repurchase the Revenue Interest shall be exercisable by giving NCEH written notice of exercise not later than fifteen (15) days after the end of the thirty day period referred to above. The repurchase under this Section 5.7(b) shall be effective upon payment in full of the repurchase price. Prior to the effectiveness of the repurchase, Ascendant shall continue to make payments to NCEH in respect of the Revenue Interest as provided by this Agreement and such payments shall be applied to, and shall be deemed to be payments on account of, the repurchase price. Ascendant shall pay any unpaid balance of the repurchase price on the third anniversary of the date that the notice of exercise is given under this Section 5.7(b). Payments on account of the repurchase price shall be applied in the following order: (1) FIRST, to the return on installments of the Purchase Price described in clause (ii) above in the inverse order in which such installments were paid by NCEH and (2) SECOND, to the amounts described in clause (i) above. For purposes of calculating the return on installments of Purchase Price under clause (ii) above, each payment on account of the repurchase price that is applied as described in clause (2) above shall be deemed to "repay" the installments of Purchase Price (to the extent not previously deemed "repaid" under this provision) in the inverse order in which such installments were paid by NCEH and the "unpaid balance" of an installment shall be deemed to be the amount of such installment paid by NCEH reduced by the amount by which such installment is deemed "repaid" under this provision. The rights granted to Ascendant under this Section 5.7(b) shall constitute the sole and exclusive remedy of Ascendant in the event of an NCEH Event of Default. (c) Upon Ascendant's giving a notice exercising its right to repurchase all or a portion of the Revenue Interest in accordance with Section 5.7(b), all obligations of NCEH to pay any amount in respect of any installment of the Purchase Price (whether or not then due) shall cease and NCEH shall have no further obligation to make any payment of Purchase Price thereafter. Notwithstanding the giving of a notice under Section 5.7(a) or 5.7(b), NCEH shall continue to be entitled to receive all payments to which it is otherwise entitled under this Agreement, with respect to the entire Revenue Interest held by it immediately prior to the giving of such notice, that accrue prior to the date that the repurchase of the Revenue Interest or portion thereof with respect to which the notice is given becomes effective in accordance with Section 5.7(a) or 5.7(b), as the case may be. 15  5.8. NONCOMPETITION BY NCEH. NCEH shall not acquire more than a 50% ownership interest in or a right to receive more than 50% of the income of the management of any fund of funds that invests 30% or more of its assets under management in any one or more of the underlying funds in which the Funds are then invested. Ascendant shall keep NCEH advised, promptly after moneys are invested, of the identities of the underlying funds in which any of the Funds are invested. 5.9. BUDGET. Ascendant shall be in conformance with the cash, debt and accrued expense levels set forth in the Budget at the end of every quarter, adjusting for payments required to be made by and to NCEH, provided that the debt and accrued expense levels may be higher than set forth in the Budget if such amounts are reasonably necessary and incurred in the ordinary course of business and all items of expense and revenue are booked on a timely and appropriate basis. 5.10. INVESTMENT ADVISORY COMMITTEE. Ascendant shall maintain the Investment Advisory Committee and hold regular meetings thereof no less frequently than four times per year. 5.11. NCEH ADVISORY COMMITTEE. NCEH shall create an Advisory Committee that Gary Shugrue shall be a member of. Such Advisory Committee shall advise NCEH with regard to strategies and other issues pertaining to the acquisition and management of funds of funds that invest in hedge funds. Section 6. INDEMNITY. (a) Ascendant shall indemnify, defend and hold harmless NCEH and its shareholders, directors, officers, employees, agents, affiliates and controlling parties (each, an "NCEH INDEMNIFIED PARTY") from and against any and all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from the untruth, inaccuracy or breach of any such representations, warranties, covenants or agreements of Ascendant contained in this Agreement or the assertion of any claim relating to the foregoing (each an "NCEH CLAIM"); PROVIDED, HOWEVER, that no indemnification shall be required hereunder for the gross negligence or willful misconduct of any NCEH Indemnified Party. In case any NCEH Claim is brought against an NCEH Indemnified Party, Ascendant will be entitled to participate in and assume the defense thereof with counsel reasonably satisfactory to such NCEH Indemnified Party, and after notice from Ascendant to such NCEH Indemnified Party of its election to assume the defense thereof, Ascendant shall be responsible for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, provided that if any NCEH Indemnified Party shall have reasonably concluded that there may be one or more legal defenses available to such NCEH Indemnified Party that conflict in any material respect with those available to Ascendant, or that such NCEH Claim involves or could have an effect upon matters beyond the scope of the indemnity agreement provided in this Section 6(a), Ascendant shall not have the right to assume the defense of such action on behalf of such NCEH Indemnified Party and Ascendant shall reimburse such NCEH Indemnified Party and any person or entity controlling such NCEH Indemnified Party for that portion of the reasonable fees and expenses of any counsel retained by the NCEH Indemnified Party that are reasonably related to the matters covered by the indemnity 16  agreement provided in this Section 6(a). Ascendant shall not make any settlement of any claim indemnified against under this Section 6(b) without the written consent of the NCEH Indemnified Party or Parties, which consent shall not be unreasonably withheld. (b) NCEH shall indemnify, defend and hold harmless Ascendant and its shareholders, directors, officers, employees, agents, affiliates and controlling parties (each, an "ASCENDANT INDEMNIFIED PARTY") from and against any and all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from the untruth, inaccuracy or breach of any such representations, warranties, covenants or agreements of NCEH contained in this Agreement or the assertion of any claim relating to the foregoing (each an "ASCENDANT CLAIM"); PROVIDED, HOWEVER, that no indemnification shall be required hereunder for the gross negligence or willful misconduct of any Ascendant Indemnified Party. In case any Ascendant Claim is brought against an Ascendant Indemnified Party, NCEH will be entitled to participate in and assume the defense thereof with counsel reasonably satisfactory to such Ascendant Indemnified Party, and after notice from NCEH to such Ascendant Indemnified Party of its election to assume the defense thereof, NCEH shall be responsible for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, provided that if any Ascendant Indemnified Party shall have reasonably concluded that there may be one or more legal defenses available to such Ascendant Indemnified Party that conflict in any material respect with those available to NCEH, or that such Ascendant Claim involves or could have an effect upon matters beyond the scope of the indemnity agreement provided in this Section 6(b), NCEH shall not have the right to assume the defense of such action on behalf of such Ascendant Indemnified Party and NCEH shall reimburse such Ascendant Indemnified Party and any person or entity controlling such Ascendant Indemnified Party for that portion of the reasonable fees and expenses of any counsel retained by the Ascendant Indemnified Party that are reasonably related to the matters covered by the indemnity agreement provided in this Section 6(b). NCEH shall not make any settlement of any claim indemnified against under this Section 6(b) without the written consent of the Ascendant Indemnified Party or Parties, which consent shall not be unreasonably withheld. Section 7. MISCELLANEOUS. 7.1. SURVIVAL OF REPRESENTATIONS. The representations and warranties and covenants contained in this Agreement or in any certificate, instrument or other writing delivered pursuant to this Agreement will survive this Agreement. 7.2. SUCCESSORS AND ASSIGNS. Neither this Agreement nor any of the rights, interests or obligations provided by this Agreement will be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties except that NCEH shall be entitled to assign its rights and obligations hereunder to any person or entity controlling, controlled by or under common control with NCEH without the consent of any other party hereto. Subject to the preceding sentence, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 7.3. AMENDMENT. This Agreement may be amended by the execution and delivery of a written instrument by or on behalf of Ascendant and NCEH. 17  7.4. SEVERABILITY. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. 7.5. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all such counterparts taken together will constitute one and the same Agreement, and a photostatic or facsimile copy of an executed counterpart hereof shall be given the same effect as the original. 7.6. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are inserted for convenience only and will not constitute a part of this Agreement. 7.7. NOTICES. Any notice, request, instruction or other document to be given hereunder will be in writing and delivered personally or sent by registered or certified mail (postage prepaid) or by facsimile, according to the instructions set forth below. Such notices will be deemed given: at the time delivered by hand, if personally delivered; three business days after being sent by registered or certified mail; and at the time when receipt is confirmed by the receiving facsimile machine if sent by facsimile: if to NCEH, to: New Century Equity Holdings Corp. 300 Crescent Court, Suite 1110 Dallas, TX 75201 Attention: Steven J. Pully Facsimile: 2140661-7475 if to Ascendant, to: ACP Investments LP 1235 Westlakes Drive, Suite 130 Berwyn, PA 19312 Attention: Gary Shugrue Facsimile: 610 ###-###-#### or to such other address or to the attention of such other party that the recipient party has specified by prior written notice to the sending party in accordance with the preceding. 7.8. ENTIRE AGREEMENT. This Agreement, and the other documents referred to herein collectively constitute the entire agreement among the parties and supersede any prior and contemporaneous understandings, agreements or representations by or among the parties, written or oral that may have related in any way to the subject matter hereof. 7.9. CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction will be applied against any party. The use of the word "including" in this Agreement means "including without limitation" and is 18  intended by the parties to be by way of example rather than limitation. References and definitions in the plural shall refer to the singular and vice versa as the context may require and references expressed in any gender shall refer to all genders as the context requires. 7.10. CONSENT TO JURISDICTION. EACH OF THE PARTIES TO THIS AGREEMENT CONSENTS TO SUBMIT TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF TEXAS, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT, AND AGREES NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY OTHER COURT. EACH OF THE PARTIES TO THIS AGREEMENT AGREES NOT TO ASSERT IN ANY ACTION OR PROCEEDING ARISING OUT OF RELATING TO THIS AGREEMENT THAT THE VENUE IS IMPROPER, AND WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO. 7.11. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RESPECTIVE RIGHT TO, AND AGREES NOT TO ELECT, A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT. 7.12. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY LAW OR RULE THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. 7.13. PUBLICITY. Ascendant may publicize this transaction promptly after Closing by publishing a press release mutually acceptable to the parties. NCEH shall have the right to make such disclosures concerning this Agreement and the Principals Agreement as it determines in its sole discretion to be appropriate or necessary to comply with applicable law. 7.14. SCHEDULES. The representations and warranties of Ascendant and NCEH set forth in this Agreement are made and given subject to the disclosures contained in the Schedules. 19  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. ACP INVESTMENTS LP (D/B/A ASCENDANT CAPITAL PARTNERS) By Ascendant Holdings, LLC, its General Partner By: /s/ Gary E. Shugrue ------------------------------------------------- Gary E. Shugrue, Member NEW CENTURY EQUITY HOLDINGS CORP. By: /s/ Steven J. Pully ------------------------------------------------- Steven J. Pully, Chief Executive Officer