ASTON ASSET MANAGEMENT LLC
 
MANAGEMENT AGREEMENT
 
This Management Agreement (this “Agreement”), is made as of August 10, 2009,
between Aston Asset Management LLC (“Aston”), the individuals set forth on
Schedule A hereto (collectively, the “Management Stockholders”) and Highbury
Financial Inc., a Delaware corporation (“Highbury”).
 
RECITALS
 
WHEREAS, Aston is a limited liability company that was formed to engage in the
investment advisory and investment management business and which currently
manages 25 no-load mutual funds;
 
WHEREAS, in connection with the amendment of the second amended and restated
limited liability company agreement of Aston, dated January 7, 2008, and the
exchange of the Series B LLC Units of Aston for Series B Convertible Preferred
Stock, $0.0001 par value per share (the “Series B Preferred Stock”), of
Highbury, pursuant to that certain Exchange Agreement of even date herewith
among Highbury and the Management Stockholders and the Persons named as
Investors on Schedule A thereto (the “Exchange Agreement”), Aston and the
Management Stockholders desire to enter into this Agreement.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
 
ARTICLE I
 
DEFINITIONS, TERMS AND REFERENCES
 
Section 1.01.  Definitions.  In this Agreement and any exhibits hereto, the
following terms shall have the following meanings:
 
“Advisers Act” shall mean the Investment Advisers Act of 1940, as it may be
amended from time to time, and any successor to such act.
 
“Affiliate” shall mean, with respect to any Person (herein the “first party”),
any other Person that directly or indirectly controls, or is controlled by, or
is under common control with, such first party. The term “control” as used
herein (including the terms “controlled by” and “under common control with”)
means the possession, directly or indirectly, of the power to (a) vote
twenty-five percent (25%) or more of the outstanding voting securities of such
Person, or (b) otherwise direct the management or policies of such Person by
contract or otherwise (other than solely as a director of a corporation (or
similar entity) that has five (5) or more directors). For the purposes of this
Agreement, Highbury is not an Affiliate of Aston.

 
 

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“Agreement” shall have the meaning specified in the preamble hereto.
 
“Asserted Liability” shall have the meaning specified in Section 7.02(a) hereof.
 
“Aston” shall have the meaning specified in the preamble hereto.
 
“Aston LLC Agreement” shall mean the Third Amended and Restated Limited
Liability Company Agreement of Aston Asset Management LLC, of even date
herewith, as amended from time to time.
 
“Certificate” shall mean the Certificate of Formation of Aston, as the same may
be amended and/or restated from time to time in accordance with the terms
hereof.
 
“Claims Notice” shall have the meaning specified in Section 7.02(a) hereof.
 
“Code” shall mean the United States Internal Revenue Code of 1986, as from time
to time amended, and any successor thereto, together with all regulations
promulgated thereunder.
 
“Committee Vote” shall have the meaning specified in Section 2.02(b)(iv) hereof.
 
“Common Stock” means the common stock, par value $0.0001 per share, of Highbury.
 
“Controlled Affiliate” shall mean, with respect to a Person, any Affiliate of
such Person under its “control,” as the term “control” is defined in the
definition of Affiliate.
 
“Covered Person” shall mean a Management Stockholder or any Officer.
 
“Eligible Person” shall have the meaning specified in Section 2.02(b)(i) hereof.
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor to such Act.
 
“Event of Default” shall have the meaning specified in Section 6.01 hereof.
 
“Exchange Agreement” shall have the meaning set forth in the recitals hereto.
 
“Expenses” shall have the meaning specified in Section 2.05(b) hereof.
 
“For Cause” shall mean, with respect to the termination of a Management
Stockholder’s employment with Aston (or any of its Controlled Affiliates), or
his or her removal from the Management Committee or from his or her position as
an Officer, any of the following:
 
(a)           The Management Stockholder has been convicted of or indicted for
(i) any criminal offense which is classified as a felony in the United States,
or (ii) any other criminal offense which involves a violation of federal or
state securities laws or regulations (or equivalent laws or regulations of any
country or political subdivision thereof in which the criminal offense occurs),
embezzlement, fraud, wrongful taking or misappropriation of property, theft, or
any other crime involving dishonesty;
 
 
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(b)           The Management Stockholder has persistently and willfully failed
to perform his or her duties, including, without limitation, persistently and
willfully violating or breaching any material provision of the Management
Agreement, or has failed to devote substantially all of his or her working time
to the performance of such duties, and in either such case such failure has not
been cured by the Management Stockholder within thirty (30) days following
written notice; or
 
(c)           The Management Stockholder has (i) engaged in a Prohibited
Competition Activity, or (ii) violated or breached Section 2.07 of the Exchange
Agreement; provided, however, that, in any such case described in clauses (i) or
(ii) of this paragraph (c), in the event such action by such Management
Stockholder has not resulted (and, if cured, is not reasonably likely to result)
in harm that is material to Highbury, Aston or any of their respective
Controlled Affiliates or any of the Funds, such Management Stockholder shall be
provided with an opportunity to cure such action promptly (and in any event
within thirty (30) days) following written notice thereof (provided that such an
opportunity to cure shall be available to a particular Management Stockholder
solely with respect to the first three such actions by such Management
Stockholder with respect to which such a written notice is provided, and
provided, further, that such an opportunity to cure shall in no event be
provided to a Management Stockholder if his or her violation, breach or other
applicable action was willful or reckless).
 
“Fund” shall mean any Mutual Fund or other commingled fund for which Aston
provides Investment Services.
 
“GAAP” shall mean U.S. generally accepted accounting principles.
 
“Highbury” shall have the meaning set forth in the preamble hereto.
 
“Immediate Family” shall mean, with respect to any natural person, (a) such
person’s spouse, parents, grandparents, children, grandchildren and siblings,
(b) such person’s former spouse(s) and current spouses of such person’s
children, grandchildren and siblings and (c) estates, trusts, partnerships and
other entities of which substantially all of the interests are held directly or
indirectly by the foregoing.
 
“Indebtedness” shall mean, with respect to a Person, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under any financing
leases, (d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person, (e) all obligations of such Person under
non-competition agreements reflected as liabilities on a balance sheet of such
Person in accordance with GAAP, (f) all liabilities secured by any Lien on any
property owned by such Persons even though such Person has not assumed or
otherwise become liable for the payment thereof, and (g) all net obligations of
such Person under interest rate, commodity, foreign currency and financial
markets swaps, options, futures and other hedging obligations.

 
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“Independent Public Accountants” shall mean any independent certified public
accountant retained by Aston and satisfactory to Highbury.
 
“Investment Services” shall mean any services which involve (a) the management,
administration, solicitation or distribution of an investment account, Mutual
Fund or other commingled fund (or portions thereof or a group of investment
accounts, Mutual Funds or other commingled funds) for compensation, (b) the
giving of advice with respect to the investment and/or reinvestment of assets or
funds (or any group of assets or funds) for compensation, or (c) otherwise
acting as an “investment adviser” within the meaning of the Advisers Act.
 
“Investor Rights Agreement” shall mean that certain Investor Rights Agreement,
dated as of the date hereof, among Highbury, the Management Stockholders and the
Persons named as Investors therein.
 
“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing) or any
other restrictions, liens or claims of any kind or nature whatsoever, excluding
liens of lessors under operating leases that do not extend beyond the property
leased.  Notwithstanding the foregoing, the following items shall not constitute
Liens under this Agreement (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which an
adequate reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (ii) statutory Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which an
adequate reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; and (iii) statutory Liens incurred in
the ordinary course of business in connection with workers’ compensation,
unemployment insurances and other types of social security.
 
“Losses” shall have the meaning specified in Section 7.01 hereof.
 
“Majority Vote” shall mean the affirmative approval, by vote or written consent,
of the Persons holding a majority of the aggregate voting power of the Series B
Preferred Stock then outstanding.
 
“Management Committee” shall have the meaning specified in Section 2.02(a)
hereof.
 
“Management Stockholders” shall have the meaning specified in the preamble
hereto.
 
“Mutual Fund” shall mean a registered investment company (or series of
registered investment companies).

 
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“Officers” shall have the meaning specified in Section 2.03 hereof.
 
“Operating Allocation” shall mean, for any period, an amount equal to the
difference between Revenues From Operations for such period and the Owners’
Allocation for such period.
 
“Owners’ Allocation” shall mean, for any period, the sum of the Owners’
Allocation Percentage multiplied by the Revenues From Operations for such
period.
 
“Owners Allocation Account” shall have the meaning specified in Section 5.02
hereof.
 
“Owners’ Allocation Expenditure” shall have the meaning specified in Section
2.05(b) hereof.
 
“Owners’ Allocation Percentage” shall mean twenty-eight percent (28%).
 
“Person” means any individual, partnership (limited or general), corporation,
limited liability company, limited liability partnership, association, trust,
joint venture, unincorporated organization or other entity.
 
“Predecessor Business” shall mean the business of the parties to the Purchase
Agreement immediately prior to the Closing (as such term is defined in the
Purchase Agreement).
 
“Prohibited Competition Activity” shall mean any of the following activities:
 
(a)           directly or indirectly, whether as owner, part owner, member,
director, officer, trustee, employee, agent or consultant for or on behalf of
any Person other than Aston or any Controlled Affiliate of Aston: (i) diverting
or taking away any funds or investors from any Fund; (ii) soliciting or
otherwise inducing or attempting to cause any Person to divert or take away any
assets or funds invested in such Funds; or (iii) soliciting or otherwise
inducing or attempting to cause any subadviser, distributor or seller of the
Funds to terminate or reduce its services on behalf of the Funds; and
 
(b)           directly or indirectly, whether as owner, part owner, partner,
member, director, officer, trustee, employee, agent or consultant for or on
behalf of any Person other than Aston or any Controlled Affiliate of Aston,
performing any Investment Services.
 
“Purchase Agreement” shall mean that certain Asset Purchase Agreement, dated as
of April 20, 2006, by and among ABN AMRO Asset Management Holdings, Inc., ABN
AMRO Investment Fund Services, Inc., ABN AMRO Asset Management, Inc., Montag &
Caldwell, Inc., Tamro Capital Partners LLC, Veredus Asset Management LLC, River
Road Asset Management LLC and Aston.
 
“Receipts Account” shall have the meaning set forth in Section 5.02 hereof.

 
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“Revenues From Operations” shall mean, for any period, the consolidated gross
revenues of Aston and any Controlled Affiliates thereof, determined on an
accrual basis in accordance with GAAP consistently applied (but including other
income such as interest, dividend income and gains on the sale of assets);
provided, however, that Revenues From Operations (A) shall not include (a)
proceeds during such period from the sale, exchange or other disposition of all,
or substantially all, of the assets of Aston and its Controlled Affiliates, (b)
revenues from the issuance by Aston of securities issued by Aston or any of its
Controlled Affiliates, and (c) payments received from third parties to the
extent constituting direct reimbursements of expenses previously paid from the
Operating Allocation (and any such payments shall be added back to the Operating
Allocation for the period in which such expenses were originally paid from the
Operating Allocation), and (B) shall be reduced by payments made to PFPC, Inc.
pursuant to the Sub-Administration and Accounting Services Agreement, dated as
of April 1, 2000 by and between PFPC, Inc. and Alleghany Investment Services, as
amended.
 
“Series B Preferred Stock” shall have the meaning set forth in the recitals
hereto.
 
“Term” shall have the meaning set forth in Section 4.01 hereof.
 
“Transfer” shall mean, directly or indirectly, a sale, assignment, transfer,
gift or exchange, or offer to do any of the foregoing; and “Transferred” shall
have the correlative meaning.
 
In addition to the foregoing, other capitalized terms used in this Agreement
shall have the meaning ascribed thereto in the text of this Agreement.
 
ARTICLE II
 
MANAGEMENT OF ASTON
 
Section 2.01.  Management in General.  Subject to the other terms and conditions
of this Agreement, including the delegations of power and authority set forth in
this Agreement, the management and control of the business of Aston shall be
vested exclusively in Highbury, and Highbury shall have exclusive power and
authority, in the name of and on behalf of Aston, to perform all acts and do all
things which, in its sole discretion, it deems necessary or desirable to conduct
the business of Aston; provided, however, that Highbury shall not have any
powers or privileges with respect to those matters delegated exclusively to the
Management Committee pursuant to Section 2.02 hereof.
 
(a)           Highbury shall, subject to all applicable provisions of this
Agreement, be authorized in the name of and on behalf of Aston: (i) to enter
into, execute, amend, supplement, acknowledge and deliver any and all contracts,
agreements, leases or other instruments for the operation of Aston business; and
(ii) in general to do all things and execute all documents necessary or
appropriate to conduct the business of Aston as described in the Aston LLC
Agreement, or to protect and preserve Aston’s assets.  Highbury may delegate any
or all of the foregoing powers to one or more of the Officers (including without
limitation through delegation to the Management Committee).
 
(b)           Any action taken by Highbury, and the signature of Highbury (or an
authorized representative thereof) on any agreement, contract, instrument or
other document on behalf of Aston, shall be sufficient to bind Aston and shall
conclusively evidence the authority of Highbury and Aston with respect thereto.

 
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(c)           Any Person dealing with Aston, Highbury or the Management
Stockholders may rely upon a certificate signed by Highbury as to (i) the
identity of Highbury or the Management Stockholders; (ii) any factual matters
relevant to the affairs of Aston; (iii) the Persons who are authorized to
execute and deliver any document on behalf of Aston; or (iv) any action taken or
omitted by Aston or Highbury.
 
(d)           Each of the Management Stockholders acknowledges and agrees that
(i) neither he, she, nor any of his or her related Investors, is a party to the
Aston LLC Agreement and (ii) neither he, she, nor any of his or her related
Investors, has any rights under the Aston LLC Agreement; provided, however, that
Highbury agrees that it shall not amend Sections 12 or 13 of the Aston LLC
Agreement to preclude the provision of indemnity to Covered Persons under
Article VII of this Agreement without the prior written consent of the
Management Stockholders, acting by Majority Vote.
 
Section 2.02.  Management Committee of Aston.
 
(a)           Aston shall have a Management Committee (the “Management
Committee”).  Highbury hereby delegates to the greatest extent permitted by
applicable law the power and authority under Section 2.05(a) of this Agreement
to the Management Committee to conduct the day-to-day operations, business and
activities of Aston.
 
(b)           The Management Committee shall be comprised as follows:
 
(i)           The Management Committee shall initially have three (3) members
and consist of Stuart Bilton, Kenneth Anderson, and Gerald Dillenburg. The
number of members of the Management Committee may be increased or decreased by
the Management Committee at any time with the written consent of Highbury (but
not decreased to a number less than two (2) members). No Person who is not both
an active employee of Aston (or any of its Controlled Affiliates) and a holder
of Series B Preferred Stock and/or Common Stock that was issued to such holder
upon conversion of Series B Preferred Stock (an “Eligible Person”) may be,
become or remain a member of the Management Committee (subject to clause (v)
below); provided, that for the purposes of this Section 2.02, an employee of
Aston or its Controlled Affiliates shall be deemed to be the holder of any
shares of Series B Preferred Stock and/or Common Stock issued upon conversion
thereof which is held of record by (i) a holding company owned solely by such
employee and/or his or her Permitted Transferees (as defined in the Investor
Rights Agreement) and (ii) any Permitted Transferee of such employee or his or
her holding company.
 
(ii)           Any vacancy in the Management Committee, however occurring
(including a vacancy resulting from an increase in the size of the Management
Committee), may be filled by any Eligible Person reasonably acceptable to
Highbury by written consent of the remaining members of the Management
Committee. In lieu of any such vacancy being filled, the Management Committee
may determine to reduce the size of the Management Committee in accordance with
clause (i) above (but not to a number less than two (2) members); provided that
if at any time there is only one (1) member of the Management Committee, at
least one (1) of the vacancies on the Management Committee must be filled and,
if it remains unfilled for a period of greater than five (5) days, shall be
filled by any Eligible Person(s) reasonably acceptable to Highbury.

 
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(iii)           Members of the Management Committee shall remain members of the
Management Committee until their resignation, removal or death. Any member of
the Management Committee may resign by delivering his or her written resignation
to the Management Committee and Highbury.  At any time that there are more than
two (2) members of the Management Committee, any member of the Management
Committee may be removed from such position: (A) with or without cause, by the
Management Committee acting by a Committee Vote (with such Committee Vote being
calculated for all purposes as if the member of the Management Committee whose
removal is being considered were not a member of the Management Committee) with
the written consent of Highbury, or (B) with or without cause, by the holders of
Series B Preferred Stock acting by a Majority Vote, with the written consent of
Highbury, or (C) For Cause by Highbury, with notice to the Management Committee
specifying the reasons for the decision.  Any Management Stockholder who is a
member of the Management Committee shall be deemed to have resigned from the
Management Committee and shall no longer be a member of the Management Committee
immediately upon such Management Stockholder ceasing to be an Eligible Person.
 
(iv)           At any meeting of the Management Committee, presence in person or
by telephone (or other electronic means) of a majority of the members of the
Management Committee shall constitute a quorum. At any meeting of the Management
Committee at which a quorum is present, a majority of the total members of the
Management Committee may take any action on behalf of the Management Committee
(any such action taken by such members of the Management Committee is sometimes
referred to herein as a “Committee Vote”). Any action required or permitted to
be taken at any meeting of the Management Committee may be taken without a
meeting of the Management Committee only if (A) a written consent thereto is
signed by all the members of the Management Committee and (B) Highbury has been
given a copy of such written consent not less than forty-eight (48) hours prior
to such action. Notice of the time, date and place of any meeting of the
Management Committee shall be given to all members of the Management Committee
and Highbury at least forty-eight (48) hours in advance of the meeting. A
representative of Highbury shall be entitled to attend each meeting of the
Management Committee. Notice need not be given to any member of the Management
Committee or Highbury if a waiver of notice is given (orally or in writing) by
such member of the Management Committee or Highbury (as applicable), before, at
or after the meeting.

 
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(v)           Notwithstanding any other provisions of this Agreement to the
contrary, Highbury shall have full power and authority at any time in its sole
discretion (and without the consent or approval of the Management Committee or
the Management Stockholders) to increase the number of members of the Management
Committee and to fill the vacancies created by any such increase with one or
more other Management Stockholders or with any other persons selected by
Highbury, provided that any such increase may only be effected by written notice
from Highbury to the Management Committee, which written notice must expressly
reference this Section of this Agreement.
 
Section 2.03.  Officers of Aston.  The Management Committee may designate
employees of Aston as officers of Aston (the “Officers”) as it deems necessary
or desirable to carry on the business of Aston.  The Management Committee may
delegate any of its power or authority to an Officer or Officers subject to
modification and withdrawal of such delegated power and authority by the
Management Committee. Any two or more offices may be held by the same Person.
New offices may be created and filled by the Management Committee. Each Officer
shall hold office until his or her successor is designated by the Management
Committee or until his or her earlier death, resignation or removal.  Any
Officer may resign at any time upon written notice to the Management Committee
and Highbury.  Any Officer designated by the Management Committee may be removed
from his or her office (with or without a concurrent termination of employment)
(i) with or without cause by the Management Committee (excluding for all
purposes the Person whose removal is being considered) or (ii) For Cause by
Highbury, in each case at any time. A vacancy in any office occurring because of
death, resignation, removal or otherwise may be filled by the Management
Committee. Any designation of Officers, a description of any duties delegated to
such Officers, and any removal of such Officers by the Management Committee,
shall be approved by the Management Committee in writing, which approval shall
be delivered to Highbury.
 
Section 2.04. Employees of Aston.
 
(a)           The decision to employ, and the terms of employment of any
employee of Aston (or any Controlled Affiliates thereof) who is not a Management
Stockholder (including, without limitation, with respect to the hiring, all
aspects of compensation, promoting, demoting and terminating of such employees),
shall be determined by the Management Committee or such Person or Persons to
whom the Management Committee may delegate such power and authority (subject, in
all instances, to the power of the Management Committee to revoke such
delegation in whole or in part (by a Committee Vote that excludes any Person to
whom such power and authority has been delegated)), subject, in all cases, to
compliance with all applicable laws, rules and regulations and with the
provisions of Section 2.05 hereof. Notwithstanding the foregoing, Highbury may
terminate the employment by Aston (or any Controlled Affiliate thereof) of any
employee who has engaged in any activity included in the definition of “For
Cause” with notice to the Management Committee specifying the reasons for such
decision.
 
(b)           Any Person who is a Management Stockholder may have his or her
employment with Aston terminated by Aston only: (i) in the case of a termination
For Cause, either by Highbury or by the Management Committee (excluding for all
purposes the Person whose termination is being considered) with the prior
written consent of Highbury, or (ii) in the case of any other termination by
Aston, by the Management Committee (excluding for all purposes the Person whose
termination is being considered) with the prior written consent of Highbury.
 
 
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Section 2.05. Operation of the Business of Aston.
 
(a)           Subject to Highbury’s rights, duties and obligations set forth
elsewhere in this Agreement (including, without limitation, the provisions of
this Section 2.05), the Management Committee is hereby delegates to the greatest
extent permitted by applicable law the power and authority from Highbury to
manage the day-to-day operations, business and activities of Aston; including,
without limitation, the power and authority, in the name of and on behalf of
Aston, to:
 
(i)           determine the use of the Operating Allocation as set forth in
Section 2.05(b) below;
 
(ii)           execute such documents and do such acts as are necessary to
register (or provide or qualify for exemptions from any such registrations) or
qualify Aston (or any Controlled Affiliates thereof) under applicable federal
and state securities laws;
 
(iii)           enter into contracts and other agreements with respect to the
provision of Investment Services and execute other instruments, documents or
reports on behalf of Aston (and any Controlled Affiliates thereof) in connection
therewith;
 
(iv)           enter into contracts, agreements and commitments with respect to
the operation of the business of Aston (and any Controlled Affiliates thereof)
as are consistent with the other provisions of this Agreement; and
 
(v)           act for and on behalf of Aston (and any Controlled Affiliates
thereof) in all matters incidental to the foregoing and other day-to-day
matters.

 
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(b)           The Operating Allocation for any period shall be used to provide
for and pay Aston’s (and any Controlled Affiliates’ thereof) business expenses,
liabilities and other costs (including without limitation (i) the payment of
premiums during such period with respect to any insurance coverages maintained
(except to the extent otherwise provided for in Section 2.05(d)), (ii) all
capital expenditures and capital contributions made by Aston (or any Controlled
Affiliate thereof) during such period, except to the extent that Owners’
Allocation has been retained therefor as an Owners’ Allocation Expenditure,
(iii) the satisfaction of any net worth, working capital or similar requirements
imposed by applicable laws and regulations in connection with the businesses
conducted and registrations held by Aston (or any Controlled Affiliate thereof)
or otherwise reasonably necessary in connection with the conduct of the
businesses of Aston (and any Controlled Affiliates thereof), (iv) all payments
to subadvisers, brokers and other vendors, (v) compensation and benefits payable
to employees of Aston (including the Officers and the Management Stockholders),
and at the discretion of the Management Committee, establishing reserves for
such future payments, and (vi) any payroll, withholding and other similar taxes
related to the compensation and benefits payable to employees of Aston), as
determined by the Management Committee, and all such business expenses,
liabilities and other costs of Aston (and any Controlled Affiliates thereof)
shall be paid out of the Operating Allocation. Without the prior written consent
of Highbury (which written consent makes specific reference to this Section
2.05(b)), Aston shall not (nor shall any Controlled Affiliate of Aston) incur
(and the Management Stockholders shall use their reasonable best efforts to
prevent Aston (or any Controlled Affiliate thereof) from incurring) any expenses
or take any action to incur other obligations which expenses and obligations
exceed the ability of Aston to pay or provide for them out of the Operating
Allocation on a current or previously reserved basis. Except to the extent
otherwise required by applicable law, Aston (and any Controlled Affiliates
thereof) shall only make payments of compensation (including bonuses) to
employees (including the Officers and the Management Stockholders) out of the
balance of the Operating Allocation remaining after the payment (or reservation
for payment) of all the other business expenses, liabilities, requirements and
other costs for the applicable period, including, without limitation, any
payroll, withholding and other similar taxes related to the compensation and
benefits payable to employees of Aston (“Expenses”); provided, however, that the
payment of base salaries in the ordinary course of business to persons other
than the Management Stockholders and in amounts not greater than the base
salaries paid on the date hereof during a quarter in which the Operating
Allocation is not sufficient to pay all other Expenses shall not constitute a
breach of this Agreement for such fiscal quarter so long as (i) the Operating
Allocation was sufficient to pay all Expenses, including compensation, in the
immediately preceding two fiscal quarters and (ii) the Management Stockholders
use commercially practicable efforts to decrease the amount of Expenses
(including reductions in compensation) in the next fiscal quarter to insure that
there is not a shortfall in such next fiscal quarter (including the amounts
payable on account of the shortfall for the preceding fiscal quarter); provided,
that the foregoing shall in no way affect the rights and remedies of Highbury
pursuant to Article V or Article VI.  Any excess Operating Allocation remaining
for any fiscal quarter following the payment (or reservation for payment) of all
business expenses, liabilities and other costs (including any such amount
established as a reserve in a prior period that is reasonably determined by the
Management Committee to have been in excess of what was necessary for such
reserve) may be used by Aston in such fiscal quarter and/or in future fiscal
quarters in accordance with this Section 2.05(b).  The Owners’ Allocation shall
in no event be used to provide for or pay the business expenses, liabilities or
other costs of Aston (or any Controlled Affiliate thereof), except to the extent
expressly permitted by Section 2.05(d) or as otherwise agreed to in writing by
Highbury and the Management Committee (any such permitted use of the Owners’
Allocation being referred to herein as an “Owners’ Allocation Expenditure”).
 
(c)           Aston shall not (nor shall any Controlled Affiliate of Aston) do
or commit to do, and the Management Stockholders shall prevent Aston (or any
Controlled Affiliate thereof) from doing or committing to do, any of the
following without the prior written consent of Highbury (which written consent
makes specific reference to this Section 2.05(c)):
 
(i)           enter into, amend, modify or terminate any contract, agreement or
understanding (written or oral) if such action or the resulting contract,
agreement or understanding could reasonably be expected to conflict with the
provisions of this Section 2.05;

 
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(ii)           enter into, amend, modify or terminate any contract, agreement or
understanding (written or oral) if such action or the resulting contract,
agreement or understanding (individually or in the aggregate) could have a
material adverse impact on the availability of the Operating Allocation in
future periods (including, without limitation, long-term leases or employment
contracts);
 
(iii)           enter into, amend, modify or terminate any contract, agreement
or understanding (written or oral) if such action or the resulting contract,
agreement or understanding has the effect of creating a Lien upon any of the
assets of Aston (other than Liens securing indebtedness of Aston incurred to
finance the acquisition of fixed or capital assets (whether pursuant to a
deferred purchase agreement with a vendor, a loan, a financing lease or
otherwise), provided that (A) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (B) such
Liens do not at any time encumber any property other than property financed by
such indebtedness, (C) the amount of indebtedness secured thereby is not
thereafter increased (D) the principal amount of indebtedness secured by such
Lien shall at no time exceed the purchase price of such property and (E) the
purchase price for such property shall not exceed $100,000) or upon any portion
of the Owners’ Allocation;
 
(iv)           take any action (or omit to take any action) if such action (or
omission) could reasonably be expected to result in the termination of the
employment by Aston of any Management Stockholder;
 
(v)            create, incur, assume, or suffer to exist any Indebtedness;
 
(vi)           establish or modify any material compensation arrangement (other
than salary and cash bonuses in the ordinary course) or program (whether cash or
non-cash benefits) applicable to any employee, in any such case which is subject
to ERISA, which requires qualification under the Code, or which otherwise (A)
requires Highbury (other than in its capacity as manger member of Aston) or any
of its Affiliates to take any action which it would not take but for the
establishment or modification of such compensation arrangement or program or (B)
prevents Highbury or any of its Affiliates from taking any action which it would
otherwise have been able to take but for the establishment or modification of
such compensation arrangement or program (and the Management Committee shall
give Highbury not less than thirty (30) days prior written notice before Aston
(or any Controlled Affiliate thereof) establishes or modifies any material
compensation arrangement (other than salary and cash bonuses in the ordinary
course) or program);

 
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(vii)           enter into, amend, modify or terminate any contract, agreement
or understanding (written or oral) (A) containing severance or termination
payment arrangements, other than severance or termination payment arrangements
with bona fide employees of Aston or its Controlled Affiliates (other than any
Management Stockholder or an Immediate Family member thereof) which do not
exceed $250,000 individually to any one such employee or represent potential
liabilities at any one time outstanding (taking into account such contract,
agreement or understanding and all other such contracts, agreements and
understandings of Aston and its Controlled Affiliates then in effect) in excess
of $250,000 in the aggregate, (B) which could cause Highbury or any of its
Affiliates to be liable for termination or severance payments or other
contractual payments upon a termination of any employee’s employment with Aston
(or any Controlled Affiliate thereof) or (C) which is with a Management
Stockholder, an Affiliate of a Management Stockholder, or a partner,
shareholder, member, manager, director, officer, employee or Immediate Family
member of any of the foregoing;
 
(viii)         (A) enter into any line of business other than the provision of
Investment Services, (B) acquire, form or otherwise establish any subsidiary or
Controlled Affiliate of Aston or otherwise make any investment in, or otherwise
conduct business through, any other Person, (C) acquire any material assets or
other properties, other than capital expenditures made out of Operating
Allocation in the ordinary course of business consistent with past practice and
not involving the acquisition of any Person as a going concern, or (D) sell,
transfer or otherwise dispose of any material assets or other properties, other
than sales of worn-out or obsolete equipment made in the ordinary course of
business consistent with past practice;
 
(ix)           (A) make any change in the Certificate or Aston LLC Agreement (or
the constituent documents of any Controlled Affiliate of Aston), (B) authorize
or issue any membership or other equity or ownership interests or other
securities of any type of Aston (or any Controlled Affiliate thereof), (C)
repurchase, redeem or otherwise acquire any outstanding membership or other
equity or ownership interests or other securities of Aston (or any Controlled
Affiliate thereof), (D) make any dividend or other distribution in respect of
its membership or other equity or ownership interests (other than as expressly
required by other provisions of this Agreement), (E) settle or compromise any
material litigation, arbitration, investigation, audit or other proceeding, (F)
terminate its existence or voluntarily file for or otherwise commence
proceedings with respect to bankruptcy, reorganization, receivership or similar
status, (G) make or change any tax election, waive or extend the statute of
limitations in respect of taxes, amend any tax return, enter into any closing
agreement with respect to taxes, settle any tax claim or assessment or surrender
any right to a claim for a tax refund, change any method or principle of
accounting in a manner inconsistent with past practice or change regular
independent accountants, or (H) make any loan or advance to any Person, other
than advances of business expenses in the ordinary course of business consistent
with past practice; or
 
(x)           (A) take any action which pursuant to any provision of this
Agreement may be taken only by Highbury with or without the consent of the
Management Stockholders, or (B) take any action which requires the approval or
consent of Highbury pursuant to any provision of this Agreement.

 
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(d)           Aston (and each Controlled Affiliate thereof) shall maintain (and
the Management Stockholders shall use their reasonable best efforts to cause
Aston (and each Controlled Affiliate thereof) to maintain), in full force and
effect, such insurance as is customarily maintained by companies of similar size
in the same or similar businesses (including, without limitation, errors and
omissions liability insurance), the premiums on which will be paid out of the
Operating Allocation (and the beneficiary of which shall be Aston and/or its
applicable Controlled Affiliates, as applicable). With the prior written consent
of Highbury and the Management Committee, Aston also may elect to maintain
key-man and/or disability insurance policies with respect to any Management
Stockholder, in which event the premiums on such policies will be paid out of
the Owners’ Allocation (and the beneficiary of any such policy shall be Aston).
In the event that Highbury or any of its Affiliates shall determine (at its own
expense) to maintain separate key-man and/or disability insurance policies with
respect to any Management Stockholder (of which Highbury or any of its
Affiliates may be the beneficiary), and in connection with any such policies
maintained by Aston for its own benefit, such Management Stockholder shall
cooperate with Highbury, its Affiliates and Aston (as applicable) in connection
with obtaining and maintaining such insurance policies (including without
limitation by submitting to any required examinations and truthfully answering
any questions asked by the insurer in connection with obtaining such policies).
 
(e)           In addition to, and not in limitation of, Highbury’s powers and
authority under this Agreement (including, without limitation, pursuant to
Section 2.01(a) hereof) and the Aston LLC Agreement, Highbury shall also have
the power, in its sole discretion (after consultation with the Management
Committee, to the extent practicable), whether or not they involve day-to-day
operations, business and activities of Aston (or any Controlled Affiliate
thereof), to take any or all of the following actions:
 
(i)             such actions as it deems necessary or appropriate to cause Aston
or any Affiliate of Aston, or any officer, employee, member, partner, or agent
thereof, to comply with applicable laws, rules or regulations;
 
(ii)            such actions as it deems necessary or appropriate to coordinate
any initiative which could materially affect Highbury and/or any of its
Affiliates (but only on such terms and conditions as the participation of Aston
(or any Controlled Affiliates thereof) in such initiative has been approved by
the Management Committee);
 
(iii)           such actions as it deems necessary or appropriate to cause Aston
to fulfill its obligations and exercise its rights under the Purchase Agreement
and this Agreement; and
 
(iv)           any other action necessary or appropriate to prevent actions that
require Highbury’s consent pursuant to the terms of this Agreement if such
consent has not then been given.

 
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(f)           Notwithstanding any of the provisions of this Agreement to the
contrary, all accounting, financial reporting and bookkeeping procedures of
Aston (and any Controlled Affiliates thereof) shall be established in
conjunction with policies and procedures determined under the supervision of
Highbury.  The Management Committee shall have a continuing obligation to keep
Highbury’s chief financial officer informed of material financial developments
with respect to Aston (and any Controlled Affiliates thereof). Notwithstanding
any other provisions of this Agreement to the contrary, all legal, compliance
and regulatory matters of Aston (and any Controlled Affiliates thereof) shall be
coordinated with Highbury and Aston’s (and any of its Controlled Affiliates’)
legal compliance activities shall be conducted and established in conjunction
with policies and procedures determined under the supervision of Highbury.
 
(g)           Each Management Stockholder covenants and agrees that such
Management Stockholder will at all times conduct its activities in connection
with Aston (and any Controlled Affiliates thereof), and any services provided to
Aston (or to any Controlled Affiliates thereof), in a manner which such
Management Stockholder reasonably believes is in accordance with all applicable
laws, rules and regulations, and that it will use its reasonable best efforts
(i) to ensure that the business and activities of Aston (and any Controlled
Affiliates thereof) are conducted in compliance with all applicable laws, rules
and regulations in all material respects and (ii) to preserve the goodwill and
franchise value of Aston (and any Controlled Affiliates thereof).
 
(h)           Notwithstanding any of the provisions of this Agreement to the
contrary, Highbury shall have the power to establish and mandate that Aston (and
any of its Controlled Affiliates) participate in employee benefit plans which
are subject to ERISA or require qualification under Section 401 of the Code to
the extent necessary in order to make the expenses of any such plan(s)
deductible or otherwise to comply with ERISA or the Code, and may establish or
modify the terms of any such plan to the extent necessary in connection
therewith, provided that any such action taken by Highbury shall treat the
Affiliates of Highbury subject to such action in an equitable manner (i.e., a
manner not materially more disadvantageous to one Affiliate than to other
Affiliates of Highbury, as reasonably determined by Highbury) to the extent
permissible under ERISA and the Code and consistent with achieving tax
deductibility.
 
(i)           Notwithstanding any other provisions of this Agreement to the
contrary, the Management Committee and each Management Stockholder shall
cooperate with Highbury and its Affiliates in implementing any initiative
generally involving Aston (and/or any Controlled Affiliates thereof) and a
number of such Affiliates, but only on such terms and conditions as the
participation of Aston (and any Controlled Affiliates thereof) in such
initiative has been approved by the Management Committee.
 
(j)           Notwithstanding any other provisions in this Agreement to the
contrary, without the prior written approval of the Management Committee, (i)
none of Highbury’s interest in Aston may be Transferred, (ii) Aston may not
issue any membership interests to any party other than Highbury and (iii) Aston
may not undergo any merger, consolidation, sale of all or substantially all of
its assets or similar transaction (any of which transactions described in this
clause (ii) shall also require the prior written consent of Highbury); provided,
however, (A) it is understood and agreed that, in connection with the operation
of the business of Highbury (including, without limitation, the financing of its
interest in Aston and direct or indirect interests in additional investment
management companies), Highbury’s interest in Aston may be pledged and
encumbered and lien holders of Highbury’s interest shall have and be able to
exercise the rights of secured creditors with respect to such interest, (B)
Highbury may Transfer some (but not a majority) of its interest in Aston, and
Aston may issue interests in Aston, to a Person who is not a member of Aston but
who is an officer or employee of Aston (or any Controlled Affiliate thereof) or
who becomes an officer or employee of Aston (or any Controlled Affiliate
thereof) or a Person majority owned by any such Person so long as Highbury
continues to control Aston, and (C) Highbury may Transfer all or any portion of
its interest in Aston, and Aston may issued interests in Aston, to an Affiliate
of Highbury (and any such Affiliate shall thereafter be bound by the provisions
of this Agreement).

 
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Section 2.06. Compensation and Expenses of Highbury and Management
Stockholders.  Highbury may receive compensation for services provided to Aston
(or any Controlled Affiliate thereof) only to the extent approved by the
Management Committee.  Aston shall, however, pay and/or reimburse Highbury for
extraordinary expenses incurred by Highbury directly in connection with the
operation of Aston (and any Controlled Affiliates thereof) out of the Operating
Allocation.  It is expressly understood by the parties hereto that Highbury’s
general overhead items and expenses (including, without limitation, salaries,
rent and travel expenses) shall not be reimbursed by Aston. Stockholders,
officers, directors, members of Aston and agents of members of Aston may serve
as employees of Aston (or any Controlled Affiliate thereof) and be compensated
therefor out of the Operating Allocation as determined by the Management
Committee (or its delegate(s)) pursuant to Section 2.05(b).  Except in respect
of their provision of services as employees of Aston (or any Controlled
Affiliate thereof) for which they may be compensated out of the Operating
Allocation as contemplated by the preceding sentence, Management Stockholders
and members of their Immediate Family may not receive compensation on account of
the provision of services to Aston (or any Controlled Affiliate thereof) without
the prior written consent of the Management Committee and Highbury.
 
ARTICLE III
 
RECORDS AND REPORTS
 
Section 3.01. Books and Records.  The Management Committee shall (and each of
the Management Stockholders shall use his or her reasonable best efforts to)
cause Aston to keep complete and accurate books of account with respect to the
operations of Aston, prepared in accordance with GAAP (using the accrual method
of accounting, consistently applied). Such books shall be maintained at the
principal office of Aston in Chicago, Illinois or at such other place as
Highbury shall determine.
 
Section 3.02. Accounting.  The Management Stockholders agree that Aston’s books
of account shall be kept on the accrual method of accounting, or on such other
method of accounting as Highbury may from time to time determine with the advice
of the Independent Public Accountants, and shall be closed and balanced at the
end of each fiscal year and shall be maintained for each fiscal year in a manner
consistent with GAAP and with the principles and/or policies of Highbury applied
consistently with respect to its Controlled Affiliates.

 
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Section 3.03. Financial and Compliance Reports.  The Management Committee shall
(and each of the Management Stockholders shall use his or her reasonable best
efforts to) cause Aston to furnish to Highbury each of the following:
 
(a)           Within ten (10) days after the end of each month and each fiscal
quarter, information regarding the consolidated assets under management of Aston
and any Controlled Affiliates thereof (including the components of any changes
from the information provided with respect to the prior period, information
regarding net client cash flows and information regarding market appreciation
and depreciation in client portfolios), and an unaudited financial report of
Aston (consolidated with any Controlled Affiliates thereof) prepared in
accordance with GAAP using the accrual method of accounting consistently applied
(except that the financial report may (i) be subject to normal year-end audit
adjustments which are neither individually nor in the aggregate material and
(ii) not contain all notes thereto which may be required in accordance with GAAP
to be included in audited financial statements), which unaudited financial
report shall have been certified by the most senior financial officer of Aston
to have been so prepared and shall include the following:
 
(i)             statements of operations, changes in members’ capital and cash
flows for such month or quarter, together with a cumulative income statement
from the first day of the then-current fiscal year to the last day of such month
or quarter;
 
(ii)           a balance sheet as of the last day of such month or quarter; and
 
(iii)           with respect to the quarterly financial report, a detailed
computation of the Owners’ Allocation for such quarter.
 
(b)           Within thirty (30) days after the end of each fiscal year of
Aston, audited financial statements of Aston (consolidated with any Controlled
Affiliates thereof), which shall include statements of operations, changes in
members’ capital and cash flows for such year and a balance sheet as of the last
day thereof, each prepared in accordance with GAAP, using the accrual method of
accounting, consistently applied, certified by the Independent Public
Accountants, with all of the fees and expenses in connection with such audit to
be paid by Highbury.
 
(c)           If requested by Highbury, within twenty-five (25) days after the
end of each calendar quarter, Aston’s (and any Controlled Affiliates’ thereof)
operating budget for each of the next four (4) fiscal quarters, in such form and
containing such estimates as may be requested by Highbury from time to time.
 
(d)           If requested by Highbury, copies of all financial statements,
reports, notices, press releases and other documents released to the public
during such period.
 
(e)           As promptly as is reasonably possible following request by
Highbury from time to time, such other financial, operations, performance or
other information or data as may be requested.

 
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Section 3.04.  Meetings.
 
(a)           The Management Committee and the Officers shall hold such regular
meetings at Aston’s principal place of business with representatives of Highbury
as may be reasonably requested by Highbury from time to time. These meetings
shall be attended (either in person or by telephone) by such members of the
Management Committee, Officers and other employees of Aston as may be requested
by Highbury or any of the members of the Management Committee.
 
(b)           At each meeting described in Section 3.04(a), the Officers and
other employees of Aston shall discuss such matters regarding Aston and its
performance, operations and/or budgets as may be reasonably requested by
Highbury, and each of the attendees (whether in person or by telephone) at such
meeting shall have the right to submit proposals and suggestions regarding
Aston, and the attendees at the meeting shall, in good faith, discuss and
consider such proposals and suggestions.
 
ARTICLE IV
 
TERM; EXTENSION; TERMINATION
 
Section 4.01. Term.  The term of this Agreement commenced on the date hereof and
shall continue until the earlier of (i) such time as there are no Management
Stockholders owning shares of Series B Preferred Stock or the shares of Common
Stock issuable upon the conversion of the Series B Preferred Stock and (ii) such
time as the employment of all Management Stockholders with Aston and any of its
Controlled Affiliates has been terminated (the “Term”); provided, that for the
purposes of this Section 4.01, a Management Stockholder shall be deemed to own
any shares of Series B Preferred Stock and/or Common Stock issued upon
conversion thereof which is held of record by (i) a holding company solely owned
by such Management Stockholder and/or his or her Permitted Transferees and (ii)
any Permitted Transferee of such employee or his holding company.
 
Section 4.02. Termination.  Notwithstanding the Term set forth in Section 4.01,
this Agreement may be terminated by Aston or Highbury by written notice to the
Management Stockholders prior to the expiration of the Term at any time after
thirty (30) days following written notice to the Management Stockholders by such
party of any Event of Default (as defined in Section 6.01 hereof) provided that
such Event of Default in not cured prior to written notice to the Management
Stockholders of the termination of this Agreement.
 
ARTICLE V
 
COMPENSATION
 
Section 5.01. Compensation.  From and after the date hereof, within thirty (30)
days after the end of each calendar quarter, Aston shall, to the extent cash is
available therfor at Aston or any of its Controlled Affiliates (and Aston shall
cause its Controlled Affiliates to distribute any such available cash to Aston,
to the extent required for payments pursuant hereto and not in violation of any
laws applicable to such Controlled Affiliates), and based on the unaudited
financial statements for such calendar quarter prepared in accordance with
Section 3.03 hereof (after approval of such financial statements by Highbury),
(i) first distribute to Highbury an amount equal to the Owners’ Allocation and
(ii) second, make available to the Management Committee all cash available after
the payment of the Owners’ Allocation to Highbury pursuant to clause (i) as
Operating Allocation to be used as determined by the Management Committee
consistent with Sections 2.05(a)(i) and 2.05(b) hereof.

 
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Section 5.02. Payment Dates.  To give effect to the foregoing, Aston shall have
two (2) bank accounts.  The first account (the “Receipts Account”) shall have as
its authorized signatories such representatives of Aston and Highbury as the
Management Committee and Highbury shall deem appropriate or desirable.  All of
Aston’s receipts shall be paid into the Receipts Account; provided, however,
that on a monthly basis, Aston shall transfer twenty-eight percent (28%) of
receipts paid into this account to a second account (the “Owners’ Allocation
Account”) which shall have as its authorized signatories such representatives of
Highbury as Highbury shall deem appropriate or desirable.  Highbury shall use
the Owners’ Allocation Account to make all distributions of Owners’ Allocation
pursuant to Section 5.01 above and to fund all Owners’ Allocation
Expenditures.  The Receipts Account shall be used by the Management Committee to
make all operating expense payments (including payments of salary and bonus) out
of the Operating Allocation.  Within thirty (30) days after the end of each
calendar quarter, based on the unaudited financial statements for such calendar
quarter prepared in accordance with Section 3.03 hereof, and within ninety-five
(95) days after the end of each fiscal year of Aston, based on the audited
financial statements prepared in accordance with Section 3.03 hereof, Highbury
and Aston shall cause such transfers between the Receipts Account and the
Owners’ Allocation Account to reflect the appropriate allocations between
Operating Allocation and Owners’ Allocation and other amounts excluded from the
definition of Revenue from Operations hereunder.
 
Section 5.03. Default of Payment of Owners’ Allocation.  To the extent that cash
is for any reason not available to make a payment in an amount equal to the
Owners’ Allocation to Highbury pursuant to Section 5.01 at the time that such
payment otherwise would have been required by Section 5.02 to be made to
Highbury if cash were available therefor (or in the event that Aston for any
other reason does not make a required payment to Highbury within thirty (30)
days following a calendar quarter end or ninety-five (95) days following a
fiscal year end, as applicable), then, at the option of Highbury in its sole
discretion, such payment shall be made to Highbury by Aston in the form of a
promissory note, which promissory note shall accrue interest at a rate per annum
(beginning on the date it was otherwise required to be made under Section 5.02,
together with interest thereon calculated from the thirtieth (30th) day
following such calendar quarter end or the ninety-fifth (95th) day following
such fiscal year end (as applicable)) equal to the prime lending rate then in
effect as reported by JP Morgan Chase, which interest shall be borne by Aston as
an operating expense payable out of the Operating Allocation.  Any such
promissory note shall be paid in full by Aston prior to any distribution of
Operating Allocation as compensation to the Management Stockholders.
 
Section 5.04. Capitalization of Excess Operating Cash Flow.  If the Management
Committee advises Highbury that, in its reasonable judgment (taking into account
the anticipated revenue and expenses bases of Aston), the Operating Allocation
will exceed the foreseeable expenses of Aston on a sustained basis (taking into
account business conditions at the time and including both a reasonable
allowance for either loss of business or a change in margins in the business),
Highbury shall discuss in good faith with the Management Committee whether
Highbury concurs in that view, and if Highbury after such discussion concurs in
that view in its sole discretion, Highbury will further discuss with the
Management Committee whether to capitalize a portion of such excess cash flow,
the amount of any such excess that it is potentially appropriate to capitalize,
and who the recipients of such capitalized excess cash flow should be from the
Management Stockholders.

 
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ARTICLE VI
 
EVENTS OF DEFAULT; REMEDIES
 
Section 6.01.  Events of Default.  The following events shall constitute an
“Event of Default” under this Agreement:
 
(a)           The failure of either the Management Stockholders or Aston to pay
any sum of money to Aston or Highbury when due and payable under the terms of
this Agreement or a promissory note issued to Highbury pursuant to Section 5.03,
if such failure is not cured within thirty (30) days after written notice
specifying such failure is received by the defaulting party from the
non-defaulting party.  Notwithstanding the foregoing, if Highbury elects to
receive a promissory note as payment for the Owners’ Allocation pursuant to
Section 5.03 hereof, the failure to pay the Owners’ Allocation for such quarter
shall not be deemed an Event of Default under this Section 6.01(a); provided
however that if Aston fails make any payment under such promissory note when
due, such nonpayment shall be deemed an Event of Default under this Section
6.01(a) subject to the applicable 30-day cure period.
 
(b)           The material failure of the Management Stockholders to perform,
keep or fulfill any of their other covenants, undertakings or obligations to
Aston or Highbury set forth in this Agreement, and if such failure or breach is
not cured within ten (10) days after written notice specifying such failure or
breach is received by the Management Stockholders from Aston or Highbury.
 
Section 6.02.  Remedies.  Upon the occurrence of an Event of Default, the
non-defaulting party may pursue any and all remedies available to it at law or
in equity, in addition to any right or remedy (including the right to terminate
this Agreement) provided under the terms of this Agreement.
 
ARTICLE VII
 
INDEMNIFICATION; LIABILITY AND EXCULPATION
 
Section 7.01. Indemnification. To the fullest extent permitted by applicable
law, a Covered Person shall be entitled to indemnification from Aston for any
loss, damage or claim (including any amounts paid in settlement of any such
claims) including expenses, fines, penalties and counsel fees and expenses
incurred by such Covered Person (“Losses”) by reason of any act or omission
performed or omitted by such Covered Person in good faith on behalf of Aston (or
any Controlled Affiliate thereof) and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by this Agreement
(whether occurring prior to, on, or after the date hereof), except that no
Covered Person shall be entitled to be indemnified in respect of any Losses
incurred by such Covered Person by reason of any action or inaction of such
Covered Person which constituted fraud, gross negligence, willful misconduct or
a breach of this Agreement or the Purchase Agreement; provided, however, that
any indemnity under this Section 7.01 shall be provided out of and to the extent
of Aston’s assets only, and no member of Aston nor any Covered Person shall have
any personal liability to provide indemnity on account thereof.

 
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Section 7.02. Notice; Opportunity to Defend and Expenses.
 
(a)           Promptly after receipt by any Covered Person from any third party
of notice of any demand, claim or circumstance that, immediately or with the
lapse of time, would reasonably be expected to give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding or
investigation (an “Asserted Liability”) that could reasonably be expected to
result in any Losses with respect to which the Covered Person might be entitled
to indemnification from Aston under Section 7.01, the Covered Person shall give
written notice thereof (the “Claims Notice”) to the Management Committee and
Highbury; provided, however, that a failure to give such notice shall not
prejudice the Covered Person’s right to indemnification hereunder except to the
extent that Aston, a Controlled Affiliate thereof or Highbury is actually
prejudiced thereby. The Claims Notice shall describe the Asserted Liability in
such reasonable detail as is practicable under the circumstances, and shall, to
the extent practicable under the circumstances, indicate the amount (estimated,
if necessary) of the Loss that has been or may be suffered by the Covered
Person.
 
(b)           Aston may elect to compromise or defend, at its own expense and by
its own counsel, any Asserted Liability; provided, however, that if the named
parties to any action or proceeding include (or could reasonably be expected to
include) both Aston (or a Controlled Affiliate thereof) and a Covered Person, or
more than one Covered Persons, and Aston is advised by counsel that
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the Covered Person may engage
separate counsel at the expense of Aston. If Aston elects to compromise or
defend such Asserted Liability, it shall within twenty (20) business days (or
sooner, if the nature of the Asserted Liability so requires) notify the Covered
Person of its intent to do so, and the Covered Person shall cooperate, at the
expense of Aston, in the compromise of, or defense against, such Asserted
Liability. Notwithstanding the foregoing, any settlement or compromise shall not
include any terms and conditions applicable to an Investor or Management
Stockholder, other than the payment of cash to be paid by the Company, without
the prior written consent of such Investor or Management Stockholder.  If Aston
elects not to compromise or defend the Asserted Liability, fails to notify the
Covered Person of its election as herein provided, contests its obligation to
provide indemnification under this Agreement, or fails to make or ceases making
a good faith and diligent defense, the Covered Person may pay, compromise or
defend such Asserted Liability all at the expense of the Covered Person (in
accordance with the provisions of Section 7.02(c) below). Except as set forth in
the preceding sentence, neither Aston nor the Covered Person may settle or
compromise any claim over the objection of Aston or Highbury; provided, however,
that consent to settlement or compromise shall not be unreasonably withheld. In
any event, Aston and the Covered Person may participate at their own expense, in
the defense of such Asserted Liability. The Covered Person shall in any event
make available to Aston any books, records or other documents within its control
that are necessary or appropriate for such defense, all at the expense of Aston.

 
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(c)           If Aston elects not to compromise or defend an Asserted Liability,
or fails to notify the Covered Person of its election as above provided, then,
to the fullest extent permitted by applicable law, expenses (including legal
fees) incurred by a Covered Person in defending any Asserted Liability, shall,
from time to time, be advanced by Aston prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by Aston of an
undertaking by or on behalf of the Covered Person to repay such amount if it
shall be determined that the Covered Person is not entitled to be indemnified as
authorized in Section 7.01 hereof, without the provision of any security.
 
(d)           Covered Persons shall be entitled to enforce their rights to
indemnification and advancement of expenses pursuant to this Section 7.02 by
bringing an action in the Delaware Court of Chancery in accordance with Section
145(k) of the Delaware General Corporation law, which court may summarily
determine the Company’s obligation to advance expenses (including attorneys’
fees).
 
Section 7.03. Miscellaneous.
 
(a)           The right of indemnification hereby provided shall not be
exclusive of, and shall not affect, any other rights to which a Covered Person
may be entitled at law, under other agreements or otherwise. Nothing contained
in this Article VII shall limit any lawful rights to indemnification existing
independently of this Article VII.
 
(b)           The indemnification rights provided by this Article VII shall also
inure to the benefit of the heirs, executors, administrators, successors and
assigns of a Covered Person and any officers, directors, members, partners,
shareholders, employees and Affiliates of such Covered Person (and any former
officer, director, member, partner, shareholder or employee of such Covered
Person, if the Loss was incurred while such Person was an officer, director,
member, partner, shareholder or employee of such Covered Person).The
indemnification rights provided by this Article VII shall survive the
termination of this Agreement and any event which causes any Covered Person to
cease to be a Covered Person.
 
Section 7.04. Liability and Exculpation.
 
(a)           No Covered Person shall be obligated personally for any of the
debts, obligations or liabilities of Aston (or its Controlled Affiliates),
whether arising in contract, tort or otherwise solely by reason of being a
Covered Person.
 
(b)           No Covered Person shall be liable to Highbury, Aston or any of
their Controlled Affiliates for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Covered Person in good faith on
behalf of Highbury, Aston or any of their Controlled Affiliates and in a manner
reasonably believed to be within the scope of authority conferred on such
Covered Person, unless such act or omission constituted fraud, gross negligence
or willful misconduct.

 
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(c)           To the extent that, at law or in equity, a Covered Person has
duties (including fiduciary duties) and liabilities relating thereto to Aston,
Highbury or any of their Controlled Affiliates, a Covered Person shall not be
liable to any of them for his, her or its good faith reliance on the provisions
of this Agreement.  The provisions of this Agreement, to the extent that they
restrict the duties and liabilities of a Covered Person otherwise existing at
law or in equity, are agreed by the parties hereto to replace such other duties
and liabilities of such Covered Person.
 
ARTICLE VIII
 
MISCELLANEOUS
 
Section 8.01.  Notices.  All notices, requests, demands and other communications
under this Agreement must be in writing and will be deemed duly given, unless
otherwise expressly indicated to the contrary in this Agreement, (i) when
personally delivered, (ii) upon receipt of a telephonic facsimile transmission
with a confirmed telephonic transmission answer back, (iii) three (3) business
days after having been deposited in the United States mail, certified or
registered, return receipt requested, postage prepaid, or (iv) one (1) business
day after having been dispatched by a nationally recognized overnight courier
service, addressed to the parties or their permitted assigns at the following
addresses:
 
if to Aston or Highbury:
 
Highbury Financial Inc.
999 Eighteenth Street, Suite 300
Denver, Colorado 80202
Attention:  Richard S. Foote
Facsimile:  303-893-2902
 
with a copy to:
 
Bingham McCutchen LLP
399 Park Avenue
New York, New York 10022
Attention:  Floyd I. Wittlin
Facsimile:  212-702-3625
 
if to the Management Stockholders:
 
c/o Stuart D. Bilton
120 North LaSalle Street, 25th Floor
Chicago,  Illinois  60601
Facsimile:  312-268-1335

 
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with a copy to:
 
Sonnenschein Nath & Rosenthal LLP
233 S. Wacker Drive
Suite 7800
Chicago, Illinois 60606-6404
Attention:  Michael D. Rosenthal
Facsimile:  312-876-7934
 
or at such other address as a party may furnish in writing to each other party.
 
Section 8.02. Further Assurances.  Aston and the Management Stockholders shall
execute and deliver all other appropriate supplemental agreements and other
instruments, and take any other action necessary to make this Agreement fully
and legally effective, binding and enforceable as between them and as against
third parties.
 
Section 8.03. Amendments, Modifications and Waivers.  Any covenant, agreement,
provision or condition of this Agreement may be amended or modified, or
compliance therewith may be waived (either generally or in any particular
instance and either retroactively or prospectively), by (and only by) an
instrument in writing signed by Aston and the Management Stockholders.
 
Section 8.04. Successors and Assigns.  This Agreement shall be so binding upon
and shall inure to the benefit of the parties hereto and their respective
personal representatives, heirs, successors and assigns.
 
Section 8.05. Governing Law.  This Agreement and the rights of the parties
hereunder shall be interpreted in accordance with the laws of the State of
Delaware, and all rights and remedies shall be governed by such laws without
regard to principles of conflicts of laws.  Each of the parties hereby consents
to personal jurisdiction, service of process and venue in the federal or state
courts sitting in the City of Chicago for any claim, suit or proceeding arising
under this Agreement to enforce any arbitration award or obtain equitable relief
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such federal court (subject to the provisions of Section
8.06 hereof).  To the extent permitted by law, each of the parties hereby
irrevocably consents to the service of process in any such action or proceeding
by the mailing by certified mail of copies of any service or copies of the
summons and complaint and any other process to such party at the address
specified in Section 8.01 hereof.  The parties agree that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions.
 
Section 8.06. Dispute Resolution.
 
(a)           All disputes arising in connection with this Agreement shall be
resolved in binding arbitration in accordance with the applicable rules of the
American Arbitration Association.  The arbitration shall be held in the City of
Chicago before a single arbitrator selected in accordance with Section 11 of the
American Arbitration Association Commercial Arbitration Rules who shall have
substantial experience in the investment advisory industry, and shall otherwise
be conducted in accordance with the American Arbitration Association Commercial
Arbitration Rules.  The parties covenant that they will participate in the
arbitration in good faith and that they will share equally its costs except as
otherwise provided herein.  The provisions of this Section 8.06 shall be
enforceable in any court of competent jurisdiction, and the parties shall bear
their own costs in the event of any proceeding to enforce this Agreement except
as otherwise provided herein.  The arbitrator shall assess costs and expenses
(including the reasonable legal fees and expenses of the prevailing party or
parties against the other party or parties to such proceeding).  Any party
unsuccessfully refusing to comply with an order of the arbitrators shall be
liable for costs and expenses, including attorney’s fees, incurred by the other
party in enforcing the award.

 
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Section 8.07. Severability.  Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion which remaining portion shall remain in full force and effect as if this
Agreement had been executed with the invalid portion thereto eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without included therein any
such part or parts which may, for any reason, be hereafter declared invalid.
 
Section 8.08. Captions.  The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
 
Section 8.09. Entire Agreement.  This Agreement constitutes the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, written
or oral, relating to the subject matter hereof.
 
Section 8.10. Counterparts.  This Agreement may be executed in any number of
counterparts and by facsimile, each of which shall be considered an original,
but all of which taken together shall constitute one instrument.
 
Section 8.11. Interpretation.  No provisions of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have drafted or dictated such provision.

 
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IN WITNESS WHEREOF, the parties have each duly executed this Agreement as of the
day and year first above written.
 

 
ASTON:
     
ASTON ASSET MANAGEMENT LLC
     
By:
Highbury Financial Inc., its Sole Member
       
By:
/s/ Richard S. Foote
   
Name:  Richard S. Foote
   
Title:    President and Chief Executive Officer

 

 
HIGHBURY:
     
HIGHBURY FINANCIAL INC.
     
By:
/s/ Richard S. Foote
   
Name:  Richard S. Foote
   
Title:    President and Chief Executive Officer
       
MANAGEMENT STOCKHOLDERS:
     
/s/ Stuart Bilton
 
Stuart Bilton
     
/s/ Kenneth C. Anderson
 
Kenneth C. Anderson
     
/s/ Gerald Dillenburg
 
Gerald Dillenburg
     
/s/ Christine R. Dragon
 
Christine R. Dragon

 
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/s/ Joseph Hays
 
Joseph Hays
     
/s/ Betsy Heaberg
 
Betsy Heaberg
     
/s/ David Robinow
 
David Robinow
     
/s/ John Rouse
 
John Rouse

 
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SCHEDULE A
 
Stuart Bilton
 
Kenneth C. Anderson
 
Gerald Dillenburg
 
Christine R. Dragon
 
Joseph Hays
 
Betsy Heaberg
 
David Robinow
 
John Rouse
 
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