SENIOR ADVISOR AGREEMENT
by and between
ARDENT CAPITAL MANAGEMENT LLC
a Delaware limited liability company
and
DAVID KELLNER
an individual
Dated as of March 31, 2024
SENIOR ADVISOR AGREEMENT
This Senior Advisor Agreement (this "Agreement") is entered into as of March 31, 2024 (the "Effective Date"), by and between Ardent Capital Management LLC, a Delaware limited liability company (the "Company"), and David Kellner, an individual residing in the State of New York (the "Advisor"). The Company and the Advisor are each referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Company is a Delaware limited liability company and a registered investment adviser with the United States Securities and Exchange Commission (the "SEC") (CRD #298417), serving as the investment adviser and manager of Ardent Capital Partners III LP, a Delaware limited partnership (the "Fund"), with principal offices located at 590 Madison Avenue, 28th Floor, New York, NY 10022;
WHEREAS, the Advisor has served as a Senior Partner of the Company and as a member of Ardent Capital GP III LLC (the "General Partner"), the sole general partner of the Fund, continuously since 2010, during which time the Advisor has developed substantial expertise and institutional knowledge regarding the Fund's investment strategy, portfolio companies, and limited partner relationships;
WHEREAS, the Advisor is retiring from his positions with the Company and the General Partner, effective as of March 31, 2024 (the "Retirement Date"), pursuant to the terms of that certain Separation and Release Agreement, dated as of February 28, 2024, by and among the General Partner, the Company, and the Advisor (the "Separation Agreement");
WHEREAS, in connection with the Advisor's retirement and a broader management company restructuring involving, among other things, the formation of Ardent Capital Holdings LLC ("HoldCo") and Ardent GP Intermediate LLC, the Company desires to retain the Advisor in a non-employee, advisory capacity to ensure continuity and facilitate an orderly transition of the Advisor's responsibilities, and the Advisor desires to provide such advisory services, on the terms and conditions set forth herein;
WHEREAS, the Fund has approximately Two Billion Eight Hundred Million Dollars ($2,800,000,000) in total commitments from forty-seven (47) limited partners, currently holds eleven (11) active portfolio companies, and has an aggregate portfolio gross multiple of invested capital ("MOIC") of 1.42x and a net internal rate of return ("IRR") of 14.7% as of September 30, 2023; and
WHEREAS, the Company currently employs sixty-two (62) professionals across its investment, operations, investor relations, legal, and compliance teams and generates annual management fee revenue of approximately Forty-Nine Million Dollars ($49,000,000).
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article 1 shall have the meanings ascribed to them elsewhere in this Agreement.
(a) "Advisory Term" means the period commencing on the Effective Date (March 31, 2024) and ending on the second anniversary thereof (March 31, 2026), unless earlier terminated in accordance with Article 6 of this Agreement.
(b) "Affiliate" means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person. For the avoidance of doubt, the term "Affiliate" as used herein with respect to the Company includes, without limitation, Ardent Capital Holdings LLC (EIN 93-1847225), Ardent GP Intermediate LLC (EIN 93-1847231), and Ardent Capital GP III LLC (EIN 84-3291063), and each of their respective successors and assigns.
(c) "Board" or "Managing Members" means Marcus Aldridge and Priya Narayanan, in their respective capacities as Co-Founders and Managing Partners of the Company and Managing Members of Ardent Capital Holdings LLC, or such other persons as may be designated by HoldCo from time to time in accordance with its governing documents.
(d) "Cause" has the meaning set forth in Section 6.3 of this Agreement.
(e) "Compensation" means the advisory fees and other amounts payable to the Advisor as set forth in Section 4.1 and Article 4 generally.
(f) "Confidential Information" has the meaning set forth in Section 5.1 of this Agreement.
(g) "Disability" has the meaning set forth in Section 6.5 of this Agreement.
(h) "Fund" means Ardent Capital Partners III LP, a Delaware limited partnership (EIN 84-3291057), and, where the context requires, its parallel vehicles, alternative investment vehicles, and co-investment vehicles.
(i) "General Partner" means Ardent Capital GP III LLC, a Delaware limited liability company and the sole general partner of the Fund.
(j) "HoldCo" means Ardent Capital Holdings LLC, a Delaware limited liability company formed on March 1, 2024 (DE File No. 7948231), which serves as the parent holding company of the Company and its Affiliates following the management company restructuring.
(k) "Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated organization, governmental authority, or other entity of any kind.
(l) "Portfolio Companies" means the eleven (11) active portfolio companies held by the Fund as of the Effective Date, as more particularly described in Exhibit A attached hereto, together with any successor entities thereof.
(m) "Separation Agreement" means that certain Separation and Release Agreement, dated as of February 28, 2024, by and among the General Partner, the Company, and the Advisor, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
Section 1.2 — Interpretation
The following rules of construction shall apply to this Agreement:
(a) The headings and captions contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
(b) Unless the context otherwise requires, the word "including" (and correlative words such as "include" and "includes") means "including without limitation."
(c) References herein to any Article, Section, or Exhibit are to an Article, Section, or Exhibit of or to this Agreement, unless otherwise specified.
(d) Words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other genders as the context requires.
(e) The terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement.
(f) References to "days" shall mean calendar days unless otherwise specified as "business days."
(g) References to a statute, regulation, or rule shall be deemed to refer to such statute, regulation, or rule as amended, modified, supplemented, or replaced from time to time (and, in the case of any statute, to any rules and regulations promulgated under such statute), and to all sections, subsections, and provisions thereof.
(h) Each Party and its counsel have reviewed and participated in the drafting of this Agreement, and no provision of this Agreement shall be construed against any Party on the basis that such Party was the drafter thereof.
ARTICLE 2 — ENGAGEMENT; INDEPENDENT CONTRACTOR STATUS
Section 2.1 — Engagement
The Company hereby engages the Advisor, and the Advisor hereby accepts such engagement, to provide advisory services to the Company during the Advisory Term on the terms and conditions set forth in this Agreement. The Advisor's engagement shall commence on March 31, 2024 and shall continue for a period of two (2) years through and including March 31, 2026, unless earlier terminated pursuant to Article 6 of this Agreement. The Advisor's engagement hereunder is personal in nature, and the Advisor shall not delegate or subcontract the performance of advisory services to any other Person without the prior written consent of a Managing Member.
Section 2.2 — Independent Contractor Status
The Advisor shall perform all services under this Agreement as an independent contractor and not as an employee, partner, agent, or joint venturer of the Company or any of its Affiliates. Nothing in this Agreement shall be construed to create an employment relationship, partnership, joint venture, or agency relationship between the Advisor and the Company or any of its Affiliates. The Advisor acknowledges and agrees that:
(a) The Advisor shall not be entitled to participate in any employee benefit plans, programs, or arrangements maintained by the Company or its Affiliates, including, without limitation, health insurance, dental insurance, vision insurance, life insurance, disability insurance, retirement or pension plans (including any 401(k) plan), profit-sharing plans, vacation or paid time off, sick leave, or workers' compensation benefits. For the avoidance of doubt, the Advisor's continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") for a period of twenty-four (24) months following the Retirement Date is provided separately under and pursuant to the terms of the Separation Agreement, at an estimated cost of approximately Fifty-Two Thousand Dollars ($52,000), and is not affected by this Agreement.
(b) The Advisor shall be solely responsible for the payment of all federal, state, and local income taxes, self-employment taxes (including FICA and Medicare taxes), estimated taxes, and any other taxes arising from or related to the compensation received by the Advisor under this Agreement. The Company shall not withhold any taxes from payments made to the Advisor hereunder.
(c) The Company shall issue Internal Revenue Service Form 1099-NEC (Nonemployee Compensation) to the Advisor for each calendar year (or portion thereof) during the Advisory Term in which compensation is paid to the Advisor, in accordance with applicable IRS reporting requirements.
(d) The Advisor shall be responsible for obtaining and maintaining, at the Advisor's own expense, any insurance coverage that the Advisor deems necessary or appropriate in connection with the performance of services hereunder.
Section 2.3 — No Authority to Bind
The Advisor shall have no authority to bind the Company, the Fund, the General Partner, HoldCo, or any Affiliate to any contract, obligation, commitment, or course of action. The Advisor shall not hold himself out as having any such authority, nor shall the Advisor represent to any third party that he has the power to act on behalf of the Company, the Fund, the General Partner, HoldCo, or any Affiliate in any capacity other than as a non-employee advisor. Without limiting the generality of the foregoing, the Advisor shall not make any investment decisions on behalf of the Fund or the Company, execute any documents on behalf of the Company or the Fund, or enter into any binding commitments on behalf of the Company, the Fund, or any Affiliate.
ARTICLE 3 — SCOPE OF ADVISORY SERVICES
Section 3.1 — Advisory Services
The Advisor shall provide the following advisory services to the Company during the Advisory Term, as reasonably requested from time to time by the Managing Members (Marcus Aldridge and Priya Narayanan):
(a) Portfolio Company Advisory. Consultation and advice regarding the Fund's existing Portfolio Companies, including strategic direction, operational improvements, performance monitoring, add-on acquisition opportunities, management team assessments, and potential exit strategies, drawing upon the Advisor's substantial experience with the Ardent platform since 2010 and his deep familiarity with each of the eleven (11) active Portfolio Companies in the Fund's current portfolio.
(b) Industry and Market Advisory. Advice on industry trends, market conditions, macroeconomic developments, competitive dynamics, and investment themes relevant to the Fund's focus on control investments in middle-market industrial and business-services companies, including identification of emerging subsector opportunities and potential risks to the existing portfolio.
(c) Relationship Management and Introductions. Introductions to and relationship management with industry contacts, executives, operating advisors, prospective co-investors, investment bankers, lenders, consultants, and other third parties, as reasonably requested by the Managing Members, in furtherance of the Company's business objectives.
(d) Portfolio Review and Investment Committee Participation. Participation in periodic portfolio review meetings and investment committee discussions in a non-voting, advisory capacity, to provide perspective, institutional context, and strategic input based on the Advisor's knowledge of the Fund's portfolio and investment history.
(e) Transition and Knowledge Transfer. Transition assistance, including knowledge transfer to remaining principals (Robert Hsiao, Partner) and next-generation principals (Elena Marchetti, Principal; Samuel Okonkwo, Principal), regarding portfolio company relationships, investment theses, operational improvement plans, and other institutional knowledge developed by the Advisor during his tenure with the Company.
(f) Other Advisory Services. Such other advisory services as may be mutually agreed upon by the Parties from time to time in writing, consistent with the Advisor's status as a non-employee, independent contractor advisor.
The specific advisory services to be provided by the Advisor are further described in Exhibit A attached hereto and incorporated herein by reference.
Section 3.2 — Time Commitment
The Advisor's time commitment under this Agreement shall not exceed ten (10) hours per month, averaged on a quarterly basis (i.e., not more than thirty (30) hours per calendar quarter). The Advisor shall not be required to maintain regular office hours or to be physically present at the Company's offices located at 590 Madison Avenue, 28th Floor, New York, NY 10022, although office space and reasonable administrative support (including access to the Company's conference rooms, telecommunications systems, and administrative personnel) shall be made available to the Advisor on a reasonable basis during the Advisory Term. Advisory services may be performed remotely, by telephone, by videoconference, or at such other locations as the Advisor deems appropriate, subject to the Advisor's compliance with all applicable confidentiality and information security obligations under this Agreement and applicable law.
Section 3.3 — Exclusions
Nothing in this Agreement shall require the Advisor to:
(a) Devote substantially all of his business time, attention, or efforts to the affairs of the Company or the Fund. For the avoidance of doubt, the Advisor is not and shall not be deemed a "Key Person" as defined in Section 5.2 of the Amended and Restated Agreement of Limited Partnership of the Fund, dated as of April 15, 2019, as amended (the "LPA"), and the Advisor's engagement hereunder shall not trigger any Key Person Event (as defined in the LPA) or any obligation on the part of the Company to report the Advisor's engagement to limited partners as a Key Person change.
(b) Serve as an officer, director, manager, or board member (whether as a voting or non-voting member) of any Portfolio Company, or to assume any fiduciary duties with respect to any Portfolio Company.
(c) Make any investment decision or exercise any investment discretion on behalf of the Fund, the Company, the General Partner, or any Affiliate, or to participate in any manner that could be construed as exercising investment advisory discretion or authority.
(d) Participate in any fundraising, capital-raising, or investor solicitation activities for any successor fund, co-investment vehicle, or other investment product sponsored or managed by the Company or any Affiliate.
(e) Provide any services that would conflict with or constitute a violation of the non-compete restrictions set forth in Section 7(a) of the Separation Agreement, which provide for an eighteen (18)-month non-competition period with respect to funds with a substantially similar investment strategy (i.e., control-oriented private equity investments in North American middle-market industrial and business-services companies with enterprise values between $150,000,000 and $750,000,000).
Section 3.4 — Compliance with Regulatory Requirements
The Advisor acknowledges that the Company is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act") (CRD #298417). The Advisor agrees to comply with all applicable federal and state securities laws and regulations in connection with the performance of advisory services hereunder, including, without limitation, the Advisers Act and the rules and regulations promulgated thereunder. The Advisor further agrees to comply with the Company's code of ethics, insider trading policy, and personal trading policies to the extent applicable to persons providing advisory services to the Company, as such policies may be amended from time to time. The Company shall provide the Advisor with copies of all applicable compliance policies promptly following the Effective Date and promptly following any material amendments thereto. The Advisor shall cooperate with the Company's Chief Compliance Officer (currently Jennifer Wu) with respect to any compliance inquiries, regulatory examinations, or audits that may relate to the Advisor's services or tenure with the Company.
ARTICLE 4 — COMPENSATION AND EXPENSES
Section 4.1 — Advisory Fee
In consideration of the advisory services to be provided by the Advisor under this Agreement, the Company shall pay the Advisor a fee of Three Hundred Fifty Thousand Dollars ($350,000) per annum during the Advisory Term (for a total of Seven Hundred Thousand Dollars ($700,000) over the full two-year Advisory Term), payable in equal quarterly installments of Eighty-Seven Thousand Five Hundred Dollars ($87,500) each, in arrears, within thirty (30) days following the end of each calendar quarter during the Advisory Term. The payment schedule is as follows:
All payments shall be made by wire transfer of immediately available funds to an account designated by the Advisor in writing or by such other method as the Parties may agree in writing from time to time.
Section 4.2 — Expense Reimbursement
The Company shall reimburse the Advisor for all reasonable, documented, out-of-pocket expenses actually incurred by the Advisor in the performance of advisory services under this Agreement, including, without limitation, travel expenses (including airfare, ground transportation, hotel accommodations, and meals), provided that any single expense or related series of expenses exceeding Five Thousand Dollars ($5,000) shall require the prior written approval of a Managing Member (which approval may be given by email). The Advisor shall submit expense reimbursement requests on a monthly basis, accompanied by reasonable supporting documentation (including receipts, invoices, and a brief description of the business purpose of each expense). The Company shall pay all approved expense reimbursements within thirty (30) days following receipt of a properly documented reimbursement request.
Section 4.3 — No Other Compensation
The advisory fee set forth in Section 4.1 shall constitute the Advisor's sole and exclusive compensation for services rendered under this Agreement. Except as expressly provided in this Article 4, the Advisor shall not be entitled to any additional compensation, bonus, equity interest, profit-sharing, or other remuneration from the Company or any Affiliate in connection with the advisory services provided hereunder.
For the avoidance of doubt, this Agreement does not affect, modify, diminish, or otherwise alter:
(a) The Advisor's retained vested carried interest in the Fund, which had an estimated value of Thirteen Million One Hundred Forty Thousand Dollars ($13,140,000) as of September 30, 2023 (representing fifteen percent (15%) of the Eighty-Seven Million Six Hundred Thousand Dollars ($87,600,000) in aggregate accrued carried interest), which interest is governed by the Separation Agreement and the Carry Retention and Clawback Side Letter, dated as of February 28, 2024, by and among the General Partner, the Company, and the Advisor (the "Carry Side Letter"); or
(b) Any amounts payable to the Advisor under the Separation Agreement, including any severance amounts, accrued but unpaid compensation, or other benefits described therein.
Section 4.4 — Source of Payment
All advisory fees and expense reimbursements payable to the Advisor under this Agreement shall be paid from the operating budget of Ardent Capital Management LLC and shall not be charged to, allocated to, or reimbursed by the Fund or any of its limited partners. The Company acknowledges and agrees that the advisory fees payable hereunder are an operating expense of the management company and shall not constitute a Fund expense, organizational expense, or partnership expense of the Fund within the meaning of the LPA.
ARTICLE 5 — CONFIDENTIALITY; INTELLECTUAL PROPERTY; RESTRICTIVE COVENANTS
Section 5.1 — Confidential Information
"Confidential Information" means all non-public, proprietary, or confidential information of or relating to the Company, the Fund, the General Partner, HoldCo, any Affiliate, or any Portfolio Company, whether disclosed to or obtained by the Advisor before, on, or after the Effective Date, in any form or medium (whether oral, written, electronic, or otherwise), including but not limited to:
(a) Investment strategies, deal pipelines, target company lists, investment memoranda, due diligence materials, term sheets, letters of intent, and all other documents and information relating to the Company's or the Fund's investment activities;
(b) Financial information, including Fund performance data (gross MOIC, net IRR, unrealized value, realized proceeds, distributed-to-paid-in capital, residual value-to-paid-in capital, and other performance metrics), management fee and carried interest calculations, waterfall computations, management company financial statements, and Portfolio Company valuations, projections, and budgets;
(c) The identity, terms, and capital commitments of the Fund's forty-seven (47) limited partners, including the terms of any side letters, most-favored-nation elections, co-investment rights, advisory committee participation, and other negotiated arrangements with individual limited partners;
(d) The terms and conditions of the management company restructuring, including the economics realignment among the Company's principals, the formation of HoldCo and Ardent GP Intermediate LLC, allocation of management fee revenue, carried interest sharing arrangements among principals, and the terms of any buy-sell, tag-along, drag-along, or other governance arrangements;
(e) Personnel matters, compensation arrangements (including base compensation, bonus targets, carried interest allocations, and equity ownership interests), and internal organizational information of the Company and its Affiliates;
(f) Trade secrets, proprietary methodologies, analytical tools, financial models, valuation approaches, operational playbooks, and other proprietary intellectual property of the Company and its Affiliates; and
(g) Any other information that is marked, designated, or otherwise identified as confidential or proprietary at the time of disclosure, or that a reasonable person would understand to be confidential or proprietary given the nature of the information and the circumstances of its disclosure.
Confidential Information shall not include information that: (i) is or becomes generally available to the public other than as a result of a breach of this Agreement or any other confidentiality obligation owed to the Company; (ii) was known to the Advisor on a non-confidential basis prior to his engagement with the Company; or (iii) is received by the Advisor from a third party that is not, to the Advisor's knowledge, bound by any confidentiality obligation with respect to such information.
Section 5.2 — Non-Disclosure Obligations
The Advisor shall not, during the Advisory Term or at any time thereafter, directly or indirectly, disclose, publish, disseminate, or use any Confidential Information for any purpose, except:
(a) As required in the performance of advisory services under this Agreement and in furtherance of the Company's business objectives;
(b) As required by applicable law, regulation, subpoena, civil investigative demand, or other legal process, provided that the Advisor shall (to the extent legally permitted) give the Company prompt written notice of such requirement prior to any disclosure so as to afford the Company a reasonable opportunity to seek a protective order or other appropriate remedy, and the Advisor shall cooperate with the Company in connection with any such efforts; or
(c) With the prior written consent of a Managing Member, which consent may be withheld in the Managing Member's sole discretion.
The Advisor acknowledges that the Confidential Information constitutes valuable trade secrets and proprietary information of the Company and its Affiliates, and that any unauthorized disclosure or use of such information would cause irreparable harm to the Company and its Affiliates for which monetary damages would be an inadequate remedy.
Section 5.3 — Return of Materials
Upon the termination or expiration of this Agreement for any reason, or at any time upon the written request of a Managing Member, the Advisor shall promptly return to the Company all documents, files, records, data, media, notes, memoranda, correspondence, and other materials (whether in physical or electronic form) in the Advisor's possession, custody, or control that contain, reflect, or are derived from Confidential Information. The Advisor shall permanently destroy all electronic copies of Confidential Information stored on personal devices, personal email accounts, cloud storage services, or other systems or media not owned or controlled by the Company, and shall certify such destruction in writing to the Company within ten (10) business days of the termination or expiration of this Agreement (or such earlier date as may be specified in a written request from a Managing Member).
Section 5.4 — Intellectual Property
Any work product, analyses, reports, presentations, memoranda, models, recommendations, or other materials created, developed, or prepared by the Advisor, whether alone or jointly with others, in the performance of advisory services under this Agreement (collectively, "Work Product") shall be the sole and exclusive property of the Company. The Advisor hereby irrevocably assigns to the Company all of the Advisor's right, title, and interest (including all intellectual property rights, copyrights, and other proprietary rights) in and to any such Work Product. The Advisor agrees to execute such additional documents and take such further actions as may be reasonably necessary to effectuate and perfect the Company's ownership of such Work Product.
Section 5.5 — Restrictive Covenants — Cross-Reference
The Advisor acknowledges and agrees that the restrictive covenants set forth in the Separation Agreement remain in full force and effect and are incorporated herein by reference. Without limiting the foregoing, the Advisor acknowledges the continuing applicability of the following covenants:
(a) Non-Competition. The non-competition covenant set forth in Section 7(a) of the Separation Agreement, restricting the Advisor from competing with the Company for a period of eighteen (18) months from the Retirement Date (i.e., through September 30, 2025), with respect to funds with a substantially similar investment strategy;
(b) Non-Solicitation of Employees. The non-solicitation of employees covenant set forth in Section 7(b) of the Separation Agreement, restricting the Advisor from soliciting, recruiting, or hiring any employee or independent contractor of the Company or its Affiliates for a period of twenty-four (24) months from the Retirement Date (i.e., through March 31, 2026); and
(c) Non-Solicitation of Limited Partners. The non-solicitation of limited partners covenant set forth in Section 7(c) of the Separation Agreement, restricting the Advisor from soliciting any limited partner of the Fund for purposes of investing in any competing fund for a period of twenty-four (24) months from the Retirement Date (i.e., through March 31, 2026).
This Agreement does not modify, supersede, replace, or limit any of the foregoing restrictive covenants. To the extent that this Agreement imposes obligations that are more restrictive than those set forth in the Separation Agreement with respect to any particular subject matter, the more restrictive obligation shall control.
ARTICLE 6 — TERM AND TERMINATION
Section 6.1 — Term
This Agreement shall commence on the Effective Date (March 31, 2024) and shall expire on March 31, 2026, unless earlier terminated in accordance with this Article 6 (the "Advisory Term"). The Advisory Term shall not automatically renew. Any extension or renewal of the Advisory Term shall require the mutual written agreement of the Parties.
Section 6.2 — Termination by the Company Without Cause
The Company may terminate this Agreement at any time without Cause upon sixty (60) days' prior written notice to the Advisor. In the event of such termination, the Company shall pay the Advisor:
(a) All accrued but unpaid advisory fees through the effective date of termination, pro-rated for any partial quarter based on the number of days elapsed in such quarter; and
(b) A lump-sum amount equal to three (3) months' advisory fee (i.e., Eighty-Seven Thousand Five Hundred Dollars ($87,500)) as severance, payable within thirty (30) days of the effective date of termination.
The Advisor's receipt of the severance payment described in clause (b) above shall be contingent upon the Advisor's execution and non-revocation of a general release of claims in a form reasonably acceptable to the Company, within twenty-one (21) days following the effective date of termination.
Section 6.3 — Termination by the Company for Cause
The Company may terminate this Agreement immediately upon written notice to the Advisor for "Cause." For purposes of this Agreement, "Cause" shall mean:
(a) A material breach of any provision of this Agreement by the Advisor that remains uncured for fifteen (15) days after the Advisor's receipt of written notice from the Company specifying the nature of such breach in reasonable detail;
(b) The Advisor's conviction of, or plea of guilty or nolo contendere to, any felony or any crime involving fraud, dishonesty, embezzlement, or moral turpitude under the laws of any jurisdiction;
(c) The Advisor's willful misconduct or gross negligence in the performance of advisory services hereunder, which has caused or is reasonably likely to cause material harm to the Company, the Fund, or any Affiliate;
(d) A material breach by the Advisor of the confidentiality obligations set forth in Article 5 of this Agreement or any restrictive covenant contained in the Separation Agreement; or
(e) The Advisor's material breach of any applicable federal or state securities law or regulation, including any provision of the Advisers Act, in connection with the performance of services under this Agreement.
In the event of termination for Cause, the Company shall pay only accrued and unpaid advisory fees through the effective date of termination, pro-rated for any partial quarter. No severance or additional compensation shall be payable to the Advisor upon a termination for Cause.
Section 6.4 — Termination by the Advisor
The Advisor may terminate this Agreement at any time upon thirty (30) days' prior written notice to the Company. In the event of such termination, the Company shall pay all accrued but unpaid advisory fees through the effective date of termination, pro-rated for any partial quarter. No additional severance, termination fee, or other compensation shall be payable to the Advisor upon a voluntary termination by the Advisor.
Section 6.5 — Termination Upon Death or Disability
This Agreement shall terminate automatically upon the Advisor's death or Disability. For purposes of this Agreement, "Disability" means the Advisor's inability, by reason of physical or mental incapacity, illness, or injury, to perform the advisory services contemplated by this Agreement for a period of ninety (90) consecutive calendar days or one hundred twenty (120) calendar days in any twelve (12)-month period, as determined in good faith by the Managing Members. In the event of termination due to the Advisor's death or Disability, the Company shall pay to the Advisor (or, in the case of death, to the Advisor's estate or duly appointed legal representative) all accrued and unpaid advisory fees through the date of termination, pro-rated for any partial quarter.
Section 6.6 — Effect of Termination
Upon any termination or expiration of this Agreement for any reason:
(a) The Advisor's obligation to perform advisory services hereunder shall immediately cease as of the effective date of termination or expiration;
(b) The provisions of Article 5 (Confidentiality; intellectual Property; Restrictive Covenants), Article 7 (Indemnification and Liability), Article 8 (Representations and Warranties), and Article 9 (General Provisions) shall survive the termination or expiration of this Agreement and shall remain in full force and effect in accordance with their terms;
(c) Termination or expiration of this Agreement shall not affect, diminish, or otherwise modify the Advisor's rights, obligations, or entitlements under the Separation Agreement or the Carry Side Letter, including, without limitation, the Advisor's retained vested carried interest in the Fund and the carry escrow balance of Three Million Nine Hundred Forty-Two Thousand Dollars ($3,942,000) maintained in accordance with the Carry Side Letter; and
(d) The Parties shall cooperate in good faith to effect an orderly wind-down of any pending advisory matters, and the Advisor shall make himself reasonably available for a period of thirty (30) days following the effective date of termination or expiration to respond to reasonable inquiries from the Company regarding matters within the scope of the advisory services previously provided.
ARTICLE 7 — INDEMNIFICATION AND LIABILITY
Section 7.1 — Indemnification of the Advisor
The Company shall indemnify, defend, and hold harmless the Advisor and the Advisor's heirs, executors, administrators, and legal representatives (collectively, the "Advisor Indemnified Parties") from and against any and all losses, claims, damages, liabilities, judgments, settlements, penalties, fines, costs, and expenses (including reasonable attorneys' fees and disbursements and costs of investigation) (collectively, "Losses") arising out of, resulting from, or relating to the Advisor's performance of advisory services under this Agreement or the Advisor's role and status as an advisor to the Company hereunder, except to the extent that such Losses are determined by a final, non-appealable judgment of a court of competent jurisdiction or a final arbitration award to have resulted from the Advisor's gross negligence, willful misconduct, bad faith, or material breach of this Agreement. The Company's indemnification obligations under this Section 7.1 shall be in addition to, and not in limitation of, any indemnification rights the Advisor may have under the Separation Agreement, the LPA, or any other agreement.
Section 7.2 — Indemnification by the Advisor
The Advisor shall indemnify, defend, and hold harmless the Company and its Affiliates, and their respective members, managers, officers, employees, agents, successors, and assigns (collectively, the "Company Indemnified Parties") from and against any and all Losses arising out of, resulting from, or relating to the Advisor's gross negligence, willful misconduct, bad faith, or material breach of this Agreement, as determined by a final, non-appealable judgment of a court of competent jurisdiction or a final arbitration award.
Section 7.3 — Limitation of Liability
In no event shall the Advisor's aggregate liability under this Agreement, whether in contract, tort, or otherwise, exceed the total amount of advisory fees actually received by the Advisor under this Agreement during the Advisory Term. Neither Party shall be liable to the other Party for any consequential, incidental, indirect, special, exemplary, or punitive damages of any kind, including lost profits, lost revenue, or loss of business opportunity, regardless of whether such damages are based on contract, tort, strict liability, or any other theory, and regardless of whether such Party has been advised of the possibility of such damages.
Section 7.4 — Advancement of Expenses
The Company shall advance to the Advisor reasonable attorneys' fees and other costs and expenses incurred by the Advisor in connection with any claim, action, suit, or proceeding for which the Advisor is entitled to indemnification under Section 7.1, upon receipt of an undertaking by the Advisor to repay such amounts if it is ultimately determined that the Advisor is not entitled to indemnification hereunder.
ARTICLE 8 — REPRESENTATIONS AND WARRANTIES
Section 8.1 — Representations of the Advisor
The Advisor hereby represents and warrants to the Company as follows:
(a) The Advisor has full legal capacity, right, power, and authority to enter into this Agreement and to perform all of his obligations hereunder, and no further action, consent, or approval is required on the part of the Advisor in connection therewith.
(b) The execution, delivery, and performance by the Advisor of this Agreement do not and will not conflict with, violate, or result in a breach of any provision of any other agreement, contract, instrument, order, judgment, decree, or obligation to which the Advisor is a party or by which the Advisor is bound, including, without limitation, the Advisor's obligations under the Separation Agreement and the Carry Side Letter.
(c) The Advisor is not subject to any order, judgment, injunction, decree, or other directive of any court, arbitrator, or governmental authority that would prevent, restrict, or impair the Advisor's ability to perform the advisory services contemplated by this Agreement.
(d) The Advisor has not been the subject of any disciplinary action, sanction, order, or proceeding by the SEC, any state securities regulator, the Financial Industry Regulatory Authority ("FINRA"), or any other self-regulatory organization, and there are no pending or, to the Advisor's knowledge, threatened proceedings of such nature.
(e) The Advisor will comply with all applicable federal, state, and local laws, rules, and regulations in the performance of advisory services under this Agreement, including all applicable securities laws and regulations.
(f) The information provided by the Advisor to the Company in connection with the execution of this Agreement is true, accurate, and complete in all material respects.
Section 8.2 — Representations of the Company
The Company hereby represents and warrants to the Advisor as follows:
(a) The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite limited liability company power and authority to conduct its business as presently conducted.
(b) The Company has full power and authority to enter into this Agreement and to perform all of its obligations hereunder, and no further action, consent, or approval is required on the part of the Company, its members, or its managers in connection therewith.
(c) The execution, delivery, and performance by the Company of this Agreement have been duly authorized by the Managing Members and by all other necessary limited liability company action.
(d) This Agreement constitutes the legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles.
ARTICLE 9 — GENERAL PROVISIONS
Section 9.1 — Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules or provisions (whether of the State of Delaware or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 9.2 — Dispute Resolution
Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof (each, a "Dispute"), shall be resolved as follows:
(a) Negotiation. The Parties shall first attempt to resolve any Dispute by good-faith negotiation between the Advisor and the Managing Members. Either Party may initiate such negotiation by delivering written notice to the other Party describing the Dispute in reasonable detail.
(b) Arbitration. If the Dispute is not resolved through negotiation within thirty (30) days following delivery of the notice described in clause (a) above (or such longer period as the Parties may agree in writing), either Party may submit the Dispute to final and binding arbitration in New York, New York, administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with the JAMS rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order, including injunctive or other equitable relief. The arbitrator's decision and award shall be final and binding on the Parties, and judgment on any arbitration award may be entered in any court of competent jurisdiction. The prevailing Party in any arbitration proceeding shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing Party.
(c) Equitable Relief. Notwithstanding the foregoing, each Party acknowledges that a breach or threatened breach of Article 5 of this Agreement may cause irreparable harm for which monetary damages would be an inadequate remedy, and each Party agrees that, in the event of any such breach or threatened breach, the non-breaching Party shall be entitled to seek temporary, preliminary, and permanent injunctive relief or other equitable relief from any court of competent jurisdiction, without the necessity of proving actual damages and without the requirement of posting a bond or other security.
Section 9.3 — Notices
All notices, demands, requests, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by nationally recognized overnight courier (with tracking confirmation), (c) sent by certified mail, return receipt requested, postage prepaid, or (d) sent by electronic mail (with confirmation of receipt), in each case addressed as follows:
If to the Company:
Ardent Capital Management LLC 590 Madison Avenue, 28th Floor New York, NY 10022
Attention: Marcus Aldridge, Co-Founder & Managing Partner
Email: maldridge@ardentcapital.com
With a copy to (which shall not constitute notice):
Priya Narayanan, Co-Founder & Managing Partner
Email: pnarayanan@ardentcapital.com
If to the Advisor:
David Kellner 47 Gramercy Park North, Apt. 12A New York, NY 10010
Email: david.kellner@Northgate Software.com
Either Party may change its address for notice purposes by giving written notice of such change to the other Party in accordance with this Section 9.3.
Section 9.4 — Entire Agreement
This Agreement, together with the Separation Agreement, the Carry Side Letter dated February 28, 2024, and the other documents and agreements expressly referenced herein, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, representations, warranties, commitments, offers, contracts, and agreements, whether written or oral, relating to the subject matter hereof. Each Party acknowledges that it has not relied upon any representation, warranty, or statement of the other Party that is not set forth in this Agreement or in the other agreements referenced herein.
Section 9.5 — Amendment
This Agreement may not be amended, modified, supplemented, or otherwise changed except by a written instrument duly executed by both Parties. No oral modification of this Agreement shall be effective, and no course of dealing between the Parties shall be deemed to modify, amend, or discharge any provision of this Agreement.
Section 9.6 — Waiver
No waiver by either Party of any breach or default hereunder shall be deemed to be a waiver of any preceding or subsequent breach or default of the same or similar nature. No waiver shall be effective unless made in writing and signed by the waiving Party. The failure of either Party to enforce any provision of this Agreement shall not be construed as a waiver of such Party's right to enforce such provision or any other provision in the future.
Section 9.7 — Assignment
This Agreement is personal to the Advisor and may not be assigned, delegated, or transferred by the Advisor, in whole or in part, without the prior written consent of the Company. Any purported assignment by the Advisor in violation of this Section 9.7 shall be null and void. The Company may assign this Agreement to any Affiliate, including Ardent Capital Holdings LLC, without the prior written consent of the Advisor, provided that the assignee expressly assumes all obligations of the Company under this Agreement in writing and the Company remains jointly and severally liable for such obligations. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.
Section 9.8 — Severability
If any provision of this Agreement is held by a court of competent jurisdiction or an arbitrator to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. In such event, the Parties shall negotiate in good faith to replace the invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid, illegal, or unenforceable provision.
Section 9.9 — Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by facsimile, electronic mail (including portable document format (.pdf)), or other electronic transmission shall be deemed original signatures and shall be fully effective and binding for all purposes.
Section 9.10 — No Third-Party Beneficiaries