**Berkshire
      Capital Securities** **LLC**


535 Madison
      Avenue ● 19th
      Floor ● New York, New York 10022


Tel:
      (212) 207-1000 Fax: (212)
      207-1019


www.berkcap.com





February
      2, 2007




**PERSONAL
      AND CONFIDENTIAL**




Highbury
      Financial Inc.


999
      Eighteenth Street, Suite 3000


Denver,
      CO 80202


Attention:
              Mr.
                  Richard S. FootePresident
                  and Chief Executive Officer




Ladies
      and Gentlemen:




Berkshire
      Capital Securities LLC (“Berkshire Capital”) is pleased to have been retained by
      Highbury Financial Inc. (the “Company”) to act as a non-exclusive financial
      advisor in connection with a proposed acquisition transaction or series of
      acquisition transactions by the Company. This letter agreement confirms our
      understanding of the terms of our engagement.




Our
      task
      will be to work closely with designated Company personnel on opportunities
      identified by the Company in structuring, negotiating and assisting in the
      completion of a proposed acquisition transaction or series of acquisition
      transactions of companies (including divisions, subsidiaries and other business
      units of companies) that the Company may acquire. Any such company, division,
      subsidiary or other business unit designated by both the Company and Berkshire
      Capital in writing from time to time as subject to this letter agreement is
      a
“Target.” We will assist the Company in analyzing appropriate values that may be
      paid in an acquisition transaction with selected Targets and analyze with the
      Company various forms an acquisition transaction may take. We then will advise
      the Company as to strategies for negotiating with prospective Targets and will
      work with the Company in approaching and initiating discussions with prospective
      Targets and participating in negotiations. If an agreement in principle is
      reached with a prospective Target, we will assist the Company in negotiating
      a
      definitive purchase agreement and closing the transaction.




For
      purposes of this letter agreement, the term “acquisition transaction” means
      (1) any merger, consolidation, reorganization, joint venture or other
      transaction resulting in all or a portion of the business of a Target being
      combined with that of the Company or any entity controlled by or under common
      control with the Company (an “Affiliate”), or (2) the acquisition, directly
      or indirectly, of a greater than 25% equity interest in the Target, or of all
      or
      a portion of the assets of the Target, by the Company or an Affiliate, whether
      any such acquisition transaction is achieved in one or a series of
      transactions.









Highbury
      Financial Inc.


February
      2, 2007


Page
      2




This
      engagement letter may be terminated by the Company or Berkshire Capital at
      any
      time upon six months’ written notice.




If
      a
      definitive agreement with respect to an acquisition transaction is executed
      with
      a Target during the term of this engagement letter or within a two-year period
      following the termination of this engagement letter, which acquisition
      transaction is subsequently consummated, the Company agrees to pay Berkshire
      Capital a success fee at closing equal to the greater of (a) the sum of 3.0%
      of
      the first $15 million of the aggregate consideration in such acquisition
      transaction and 1.0% of the aggregate consideration in such acquisition
      transaction in excess of $15 million; or (b) $600,000, payable upon the closing
      of the acquisition transaction. As used in this letter agreement, the term
      “consideration” means an amount equal to the sum of all consideration paid and
      payable in connection with the acquisition transaction, including, without
      limitation and without duplication, (i) all cash; (ii) the amount of all debt,
      guaranty obligations, capital lease obligations, unfunded pension obligations
      or
      other off balance sheet obligations assumed, whether contractually, by operation
      of law or otherwise; (iii) the face amount of any promissory notes or other
      debt
      instruments issued to the seller; (iv) the fair market value, as determined
      by
      Berkshire Capital and the Company, of any securities issued or other property
      conveyed by the Company or an Affiliate of the Company; (v) the value of any
      above-market employment, noncompetition, nonsolicitation or consulting
      agreements entered into in connection with the acquisition transaction; (vi)
      the
      value of any above-market retention bonus pool established by the Company for
      the benefit of the employees of the Target or any of its affiliates; and (vii)
      in the case of any contingent payment arrangement, the net present value of
      the
      likely amount payable, as determined by Berkshire Capital and the Company.
      If an
      acquisition transaction provides for the transfer of all or a portion of the
      assets of the Target or any of its affiliates, but the retention of other assets
      of the transferor, including, but not limited to cash, cash equivalents,
      investments or receivables, such retained assets shall nevertheless be deemed
      to
      be part of the consideration paid by the Company in connection with such
      acquisition transaction if such retained assets have been utilized in the
      operation of the business of the Target or any of its affiliates and the Company
      or an Affiliate of the Company replaces such retained assets at or immediately
      following the closing of such acquisition transaction.




If
      the
      Company enters into a definitive agreement relating to an acquisition
      transaction, the Company agrees to pay Berkshire Capital an interim fee of
      $200,000, to be credited against the success fee. In addition, the Company
      agrees to reimburse Berkshire Capital, upon request made from time to time,
      for
      its reasonable out-of-pocket expenses (including reasonable counsel fees and
      disbursements) incurred in connection with this assignment.




The
      Company will provide Berkshire Capital (and will request each prospective Target
      to provide Berkshire Capital) with all information and materials that Berkshire
      Capital may reasonably request in order to perform its duties as financial
      advisor. The Company understands and acknowledges that Berkshire Capital will
      rely primarily on the information provided by the Company and any such
      prospective Target, and on information available from public sources, in
      performing its duties under this letter agreement, and that Berkshire Capital
      shall be entitled to rely on the accuracy and completeness of such information
      without independent investigation. Berkshire Capital will not disclose or use
      any such Confidential Information in whole or in part, in any manner, for any
      purpose other than in connection with the performance of its duties as financial
      advisor under this letter agreement, except (a) as may be required by law,
      regulation, judicial or administrative process, (b) to the extent such
      information shall have otherwise become publicly available other than as the
      result of a disclosure by Berkshire Capital in breach of the restrictions set
      forth in this sentence, (c) to the extent such information is already
      rightfully known by Berkshire Capital, (d) to the extent such information
      is independently developed by Berkshire Capital without use of, or reference
      to,
      such information or (e) to the extent such information is provided by a
      third party not known to be bound by an obligation of confidentiality to the
      Company. “Confidential Information” means (i) all information provided by
      or on behalf of the Company or its Affiliates, or the agents or other
      representatives of any of them, to Berkshire Capital relating to this
      engagement, which ought reasonably under the circumstances be treated as
      confidential, and (ii) the evaluations, compilations, notes, studies or
      other documents prepared by Berkshire Capital in furtherance of performing
      its
      duties as financial adviser under this letter agreement.









Highbury
      Financial Inc.


February
      2, 2007


Page
      3




The
      Company agrees to indemnify Berkshire Capital and its directors, officers,
      members, employees and agents and each of their respective affiliates (Berkshire
      Capital and each such person referred to herein as an “indemnified party”) from
      and against any and all losses, claims, damages and liabilities, joint or
      several, to which any indemnified party may become subject under any applicable
      federal or state law or otherwise, related to or arising out of any acquisition
      transaction or the performance by Berkshire Capital of services under this
      letter agreement, and will reimburse such indemnified party for all expenses
      (including reasonable counsel fees and expenses) incurred in connection with
      the
      defense of any pending or threatened claim, action or proceeding, and in
      pursuing any claim for indemnification or reimbursement under this letter
      agreement. If for any reason the foregoing indemnification is unavailable to
      Berkshire Capital or insufficient to hold it harmless, then the Company shall
      contribute to the amount paid or payable by Berkshire Capital as a result of
      such loss, claim, damage or liability in such proportion as is appropriate
      to
      reflect the relative economic interests of the Company and its Affiliates on
      the
      one hand and Berkshire Capital on the other hand in the matters contemplated
      by
      this letter as well as the relative fault of the Company and Berkshire Capital
      with respect to such loss, claim, damage or liability and any other relevant
      equitable considerations. The Company will not be liable under this paragraph
      to
      the extent that any loss, claim, damage or liability is found in a final
      judgment by a court of competent jurisdiction to have resulted from Berkshire
      Capital’s willful misconduct or gross negligence. The Company agrees that no
      indemnified party shall have any liability (whether direct or indirect, in
      contract, tort or otherwise) to the Company related to or arising out of any
      acquisition transaction or the performance by Berkshire Capital of services
      under this letter agreement, except to the extent any losses, claims, damages
      or
      liabilities are found in a final judgment by a court of competent jurisdiction
      to have resulted from Berkshire Capital’s willful misconduct or gross
      negligence.




The
      Company agrees that Berkshire Capital has been retained to act as the Company’s
      financial advisor and in such capacity shall act as an independent
      contractor.




Except
      as
      required by applicable law, any advice provided by Berkshire Capital under
      this
      Agreement shall not be disclosed publicly or made available to third parties
      without the prior written approval of Berkshire Capital, and, accordingly,
      such
      advice shall not be relied upon by any person or entity other than the Company;
      provided, however, that such advice, and the relationship between the Company
      and Berkshire Capital, may be disclosed in registration statements, reports,
      proxy statements and other filings made by the Company with the Securities
      and
      Exchange Commission, or in any such document, or similar disclosure document,
      disseminated to the stockholders of the Company in accordance with applicable
      securities laws, including, without limitation, the rules of the Securities
      and
      Exchange Commission.









Highbury
      Financial Inc.


February
      2, 2007


Page
      4




The
      provisions relating to the payment of fees and expenses and indemnification,
      reimbursement and contribution shall survive termination of Berkshire Capital’s
      engagement.




This
      letter agreement contains our entire agreement with respect to the performance
      by Berkshire Capital of services for the Company and supersedes any prior
      understandings and agreements. It is understood that Berkshire Capital’s
      responsibility to the Company is solely contractual in nature and that Berkshire
      Capital does not owe the Company, or any other party, any non-contractual duty
      as a result of this engagement. No waiver, amendment or other modification
      of
      this letter agreement shall be effective unless in writing and signed by each
      party. This letter agreement shall be governed by and construed in accordance
      with the laws of the State of New York.




If
      the
      above correctly sets forth our agreement and meets with your approval, please
      confirm by signing and returning the enclosed copy of this letter at your
      earliest convenience.




We
      look
      forward to working with you on this project. If you should have any questions,
      please do not hesitate to get in touch with me.


Very truly yours,BERKSHIRE
              CAPITAL
              SECURITIES LLCBy:
            /s/ Mitchell
              S. SpectorMitchell S. SpectorManaging
              Director




Confirmed
      and accepted as of


the
      date
      first written above:




HIGHBURY
      FINANCIAL INC.




By:
            /s/ Richard
              S. FooteRichard S. FootePresident
              and
              Chief Executive Officer