November 30, 2006

Highbury Financial Inc.
535 Madison Avenue, 19th Floor
New York, New York 10022
Attention: Richard Foote
Fax: (212) 688-2343
 

 
Re:
Side Letter Agreement - Montag & Caldwell

Dear Mr. Foote:

Reference is made to that certain Asset Purchase Agreement (the “Purchase
Agreement”), dated as of April 20, 2006 (the “Effective Date”), made by and
among Highbury Financial Inc., a Delaware corporation, Aston Asset Management
LLC, a Delaware limited liability company (collectively, the “Purchaser”), ABN
AMRO Asset Management Holdings, Inc., a Delaware corporation , ABN AMRO
Investment Fund Services, Inc., a Delaware corporation , ABN AMRO Asset
Management, Inc., an Illinois corporation , Montag & Caldwell, Inc. (“Montag”),
a Georgia corporation , Tamro Capital Partners LLC, a Delaware limited liability
company , Veredus Asset Management LLC, a Kentucky limited liability company ,
and River Road Asset Management, LLC, a Delaware limited liability company. This
letter agreement supersedes and replaces in its entirety the letter agreement,
dated April 20, 2006, between Montag and the Purchaser, which shall be null and
void and of no further legal effect following the execution and delivery hereof.
Capitalized terms used but not otherwise defined herein shall have the meaning
ascribed to such term in the Purchase Agreement.
 
In connection with Montag entering into the Purchase Agreement, Purchaser and
Montag hereby enter into this letter immediately after the effectiveness of the
Purchase Agreement and hereby agree as follows:
 
1. Notwithstanding Section 5.4 of the Purchase Agreement to the contrary,
Section 5.4 shall not restrict Montag from: (i) acting as sub-adviser to any
multi-manager product or fund, or (ii) acting as the adviser or a sub-adviser to
any Mutual Fund; provided, however, that prior to the fifth anniversary of the
Closing Date, Montag may not (A) act as the sole adviser or sole sub-adviser to
a mutual fund registered under the 1940 Act, other than the Target Funds, or (B)
use or permit the use of the Retained Name & Marks with respect to any Mutual
Fund, other than the Target Funds. Notwithstanding the foregoing, Montag may use
the Retained Name and Marks prior to the fifth anniversary of the Closing Date
in connection with any collective investment fund that is not registered under
the 1940 Act that Montag sponsors (a “Montag CIV”), provided that Montag pays
the Purchaser ten (10) basis points per annum on the aggregate amount of the
assets invested in such Montag CIV by any investor who, together with such
investor’s Related Parties, initially invests less than $40 million in such
Montag CIV. Montag shall pay such ten (10) basis points solely with respect to
the first $40 million that the investor invests in such Montag CIV and shall pay
such amount until the earlier of the date on which the investor withdraws such
assets from the Montag CIV or the fifth anniversary of the Closing Date. For
purposes of this Paragraph 1, “Related Party” shall mean (1) with respect to any
partnership, corporation, company, limited liability company, trust or other
entity, any Affiliate of such entity, and (2) with respect to any natural
person, any member of such person’s family or any partnership, trust or other
entity, the beneficial interests in which are directly or indirectly owned
solely by members of such person’s family.

 
 

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Highbury Financial Inc.
November 30, 2006
Page 2

2. Notwithstanding Section 5.4 of the Purchase Agreement, in the event that the
Purchaser terminates any Investment Subadvisory Contract between the Purchaser
and Montag before the fifth anniversary of the Closing Date without Cause, (i)
Montag shall immediately have the right (a) to act as the sole adviser or sole
sub-adviser with respect to any mutual fund registered under the 1940 Act which
is managed in a similar style to that of the fund subject to such terminated
Investment Subadvisory Contract, and (b) to use the Retained Name & Marks with
respect to any product, fund or other investment vehicle for which it acts as
sponsor, adviser or sub-adviser and which is managed in a similar style to that
of the fund subject to such terminated Investment Subadvisory Contract, in each
case without prior compliance with the provisions of Section 5.4(a)(i)(B) of the
Purchase Agreement, and (ii) if such terminated Investment Subadvisory Contract
was with respect to the ABN AMRO / Montag & Caldwell Growth Fund, then Montag’s
obligation to pay the Purchaser ten (10) basis points with respect to any Montag
CIV shall immediately terminate. In the event that the Purchaser terminates the
Investment Subadvisory Contracts with respect to both the ABN AMRO/Montag &
Caldwell Balanced Fund and the ABN AMRO / Montag & Caldwell Growth Fund, without
Cause, before the fifth anniversary of the Closing Date, all of the restrictions
imposed on Montag’s activities under paragraph 1 of this letter shall terminate
as of the date on which both such Investment Subadvisory Contracts have been
terminated, and Montag shall immediately have the right (A) to act as the sole
adviser or sole sub-adviser to any mutual fund registered under the 1940 Act,
and (B) to use or permit the use of the Retained Name & Marks with respect to
any Mutual Fund. For purposes of this paragraph 2, the term “Cause” shall mean
any (i) material breach by Montag of the Investment Subadvisory Contract, (ii)
any material regulatory compliance issue arising from or relating to any action
or inaction of Montag, or (iii) any other event or circumstance of similar
import or impact.

3. Purchaser agrees that, notwithstanding the provisions of Section 5.4(a)(iii)
of the Purchase Agreement, Montag shall be permitted to accept funds from
clients of Target Funds for purposes of creating a separately managed account
managed in the style of any Target Fund sub-advised by Montag, without regard to
the amount of total investment dollars that such client and his, her or its
Affiliates collectively provide Montag for investment in such account, provided
that with respect to any such investment made before the earlier of the fifth
anniversary of the Closing Date or the date upon which the Purchaser has
terminated, without cause, its Investment Subadvisory Contracts with Montag for
both the ABN AMRO/Montag & Caldwell Balanced Fund and the ABN AMRO / Montag &
Caldwell Growth Fund, (i) such investor provides Purchaser with a letter of
intent with respect to such investment, which letter of intent includes a
representation by such investor that Montag did not, directly or indirectly,
solicit such investment, and (ii) Montag shall pay the Purchaser ten (10) basis
points per annum solely with respect to the first $40 million in assets so
invested until the earlier of (x) the fifth anniversary of the date of such
initial investment or (y) the date on which such investor withdraws such assets
from management by Montag.

4. Purchaser agrees that, notwithstanding the provisions of Section 2 of the
Sub-Advisory License Agreement, the license granted by Montag under Section 1 of
the Sub-Advisory License Agreement shall terminate with respect to each Licensed
Mark (as defined in the Sub-Advisory License Agreement) of Montag upon (i) the
earlier of the close of business on the thirtieth (30th) day following (A) the
date of termination of all of the Investment Advisory Contracts with respect to
the Target Funds for which such Licensed Mark (as defined in the Sub-Advisory
License Agreement) is used as of the date hereof or (B) the date of termination
of the Investment Subadvisory Contract with Montag with respect to all of the
Target Funds for which such Licensed Mark (as defined in the Sub-Advisory
License Agreement) of Montag is used as of the date hereof, or (ii) as
subsequently agreed to in writing by Licensor. In the event that Purchaser
terminates its Investment Subadvisory Contract with Montag with respect to one,
but not both, of the ABN AMRO/Montag & Caldwell Balanced Fund and the ABN
AMRO/Montag & Caldwell Growth Fund, the Purchaser’s license to use each Licensed
Mark (as defined in the Sub-Advisory License Agreement) of Montag in connection
with the fund with respect to which the Investment Subadvisory Contract has been
terminated shall terminate, solely with respect to such fund, upon the
termination of the Investment Subadvisory Contract with respect to such fund.

 
 

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Highbury Financial Inc.
November 30, 2006
Page 3

This letter agreement shall constitute the binding and enforceable obligation of
Purchaser and Montag and is not superseded or replaced by the terms of the
Purchase Agreement or any other agreement entered into in connection with the
Purchase Agreement. The provisions in this letter agreement shall be effective
upon the Effective Date and if the Closing does not occur for any reason, or the
Purchase Agreement is terminated in accordance with its terms, this letter
agreement shall also be automatically terminated contemporaneously therewith,
and shall be null and void and of no legal effect, such that neither party shall
have any obligations hereunder. This letter agreement shall be binding upon the
parties to this letter agreement and their successors and assigns; provided,
that this letter agreement shall automatically terminate in the event that (i)
any other Seller or Affiliate of any other Seller becomes the successor to
Montag (other than a direct or indirect wholly owned subsidiary of Montag) or
(ii) in the event of any assignment hereof to any other Seller or Affiliate of
any other Seller.

This letter agreement shall be governed by the laws of the State of New York,
without regard to its conflicts of law rules.

If the foregoing accurately reflects the agreement, please execute one copy of
this letter agreement and return it to us, whereupon this letter agreement shall
become a binding agreement between the parties.

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MONTAG & CALDWELL, INC.
     
By:          /s/ William A. Vogel                                    
 
Name: William A. Vogel
 
Title: Chief Executive Officer

Acknowledged and Accepted:

ASTON ASSET MANAGEMENT LLC

By: Highbury Financial Inc.
Its: Managing Member

By:      /s/ Richard S. Foote                                             
Name: Richard S. Foote
Title: President and Chief Executive Officer
 
HIGHBURY FINANCIAL INC.
 

By:      /s/ Richard S. Foote                                             
Name: Richard S. Foote
Title: President and Chief Executive Officer
 
 

 

 

 
Side Letter - Montag / Non-Compete
 
 
 

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