Unassociated Document


    
       

      Execution
Copy

       

      HIGHBURY
FINANCIAL INC.

       

      INVESTOR
RIGHTS AGREEMENT

       

      This
Investor Rights Agreement (the “Agreement”) dated as
of August 10, 2009, is made by and among Highbury Financial Inc., a Delaware
corporation (the “Company”), the
parties named on Schedule A hereto as
Investors (individually, an “Investor” and
collectively, the “Investors”) and the
parties named on Schedule A hereto as
Management Stockholders.

       

       

      RECITAL

       

      WHEREAS,
the Company and the Investors have entered into an Exchange Agreement (the
“Exchange
Agreement”) dated as of even date herewith pursuant to which the Company
agreed to issue to the Investors, and the Investors agreed to exchange (the
“Exchange”)
Series B LLC Units of Aston Asset Management LLC with the Company for, shares of
the Company’s Series B Convertible Preferred Stock, $0.0001 par value per share
(the “Series B
Preferred Stock”).  A condition to such Exchange is that the
Company and the Investors enter into this Agreement for the purpose of setting
forth certain of the rights of the Investors and the Company.

       

       

      AGREEMENT

       

      NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:

       

      ARTICLE
I


       

      REGISTRATION
RIGHTS

       

      Section
1.01.         Certain
Definitions.  For purposes of this Agreement:

       

      “Agreement” means this
Agreement, as amended, restated, supplemented, or otherwise modified from time
to time.

       

      “Commission” means the
Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.

       

      “Common Stock” means
the common stock, par value $0.0001 per share, of the Company.

       

      “Company” is defined
in the preamble to this Agreement.

       

      “Demand
Registration” is defined in
Section
1.02(a).

       

      “Demanding Holder” is
defined in Section 1.02(a).


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at
the time.

       

      “Exchange” is defined
in the recital to this Agreement.

       

      “Exchange Agreement”
is defined in the recital to this Agreement.

       

      “Form S-3” is defined
in Section
1.04.

       

      “Founders Registration Rights
Agreement” means that certain Registration Rights Agreement dated January
25, 2006 among the Company and the Investors named on the signature pages
thereto, as amended from time to time.

       

      “Indemnified Party” is
defined in Section
1.10(c).

       

      “Indemnifying Party”
is defined in Section
1.10(c).

       

      “Investor” is defined
in the preamble to this Agreement.

       

      “Investor Indemnified
Party” is defined in Section
1.10(a).

       

      “Maximum Number of
Shares” is defined in Section
1.02(d).

       

      “Piggy-Back
Registration” is defined in Section
1.03(a).

       

      “Register,” “registered” and
“registration”
mean a registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act, and
the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.

       

      “Registrable
Securities” mean all of the shares of Common Stock that is issued upon
conversion of the Series B Preferred Stock, owned or held by
Investors.  Registrable Securities include any warrants, shares of
capital stock or other securities of the Company issued as a dividend or other
distribution with respect to or in exchange for or in replacement of shares of
Common Stock that are Registrable Securities.  As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when: (a) a Registration Statement, with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been sold, transferred, disposed of or exchanged in accordance with such
Registration Statement; (b) such securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent public
distribution of them shall not require registration under the Securities Act;
(c) such securities shall have ceased to be outstanding, or (d) such Registrable
Securities become eligible to be publicly sold without limitation as to amount
or manner of sale pursuant to Rule 144 (or any successor provision) under the
Securities Act.


      
        
           


        

        
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      “Registration
Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations
promulgated thereunder for a public offering and sale of Common Stock (other
than a registration statement on Form S-4 or Form S-8, or their successors, or
any registration statement covering only securities proposed to be issued in
exchange for securities or assets of another entity).

       

      “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.

       

      “Series B Preferred
Stock” is defined in the recital to this Agreement.

       

      “Underwriter” means a
securities dealer who purchases any Registrable Securities as principal in an
underwritten offering and not as part of such dealer’s market-making
activities.

       

      Section
1.02.         Demand
Registration.

       

      (a)           Request for
Registration.  Subject to the restrictions on transfer set
forth in Article II hereof, at any time and from time to time that not less than
250 shares of Series B Preferred Stock (as ratably adjusted on account of any
stock splits, stock combinations, stock dividends or similar recapitalizations
with respect to the Series B Preferred Stock) have been converted into Common
Stock, the holders of a majority-in-interest of the then outstanding Registrable
Securities held by the Investors or the transferees of the Investors, may make a
written demand for registration under the Securities Act of all or part of their
Registrable Securities (a “Demand
Registration”); provided that the number of shares of Registrable
Securities requested to be included in any such Demand Registration shall in no
event be less than 500,000 shares of Common Stock (as ratably adjusted on
account of any stock splits, stock combinations, stock dividends or similar
recapitalizations with respect to the Series B Preferred Stock) have been
converted into Common Stock.  Any demand for a Demand Registration
shall specify the number of shares of Registrable Securities proposed to be sold
and the intended method(s) of distribution thereof.  The Company will
notify all holders of Registrable Securities of the demand within five (5)
business days, and each holder of Registrable Securities who wishes to include
all or a portion of such holder’s Registrable Securities in the Demand
Registration (each such holder including shares of Registrable Securities in
such registration, a “Demanding Holder”)
shall so notify the Company within fifteen (15) days after the receipt by the
holder of the notice from the Company.  Upon any such request, the
Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration, subject to Section
1.02(d) and the provisos set forth in Section 1.05(a).  The
Company shall not be obligated to effect more than an aggregate of three (3)
Demand Registrations under this Section
1.02(a) in respect of Registrable Securities.

       

      (b)           Effective
Registration.  A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the Registration Statement
with respect to such Demand Registration will be deemed not to have been
declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of
the Demanding Holders thereafter elect to continue the offering; provided,
further, that the Company shall not be obligated to file a second Registration
Statement until a Registration Statement that has been filed is counted as a
Demand Registration or is terminated.


      
        
           


        

        
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      (c)           Underwritten
Offering.  If a majority-in-interest of the Demanding Holders
so elect and such holders so advise the Company as part of their written demand
for a Demand Registration, the offering of such Registrable Securities pursuant
to such Demand Registration shall be in the form of an underwritten
offering.  In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder’s participation in such underwriting and the inclusion of such holder’s
Registrable Securities in the underwriting to the extent provided
herein.  All Demanding Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the Underwriter or Underwriters selected for such
underwriting by a majority-in-interest of the holders initiating the Demand
Registration.

       

      (d)           Reduction of
Offering.  If the managing Underwriter or Underwriters for a
Demand Registration that is to be an underwritten offering advises the Company
and the Demanding Holders in writing that the dollar amount or number of shares
of Registrable Securities which the Demanding Holders desire to sell, taken
together with all other shares of Common Stock or other securities which the
Company desires to sell and the shares of Common Stock, if any, as to which
registration has been requested pursuant to written contractual piggy-back
registration rights held by other security holders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering, (such maximum dollar amount or maximum number of shares, as
applicable, the “Maximum Number of
Shares”), then the Company shall include in such registration: (i) first,
the Registrable Securities as to which Demand Registration has been requested by
the Demanding Holders (pro rata in accordance with the number of shares of
Registrable Securities which such Demanding Holder has requested be included in
such registration, regardless of the number of shares of Registrable Securities
held by each Demanding Holder) that can be sold without exceeding the Maximum
Number of Shares; (ii) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (i), the shares of Common Stock
for the account of other persons that the Company is obligated to register
pursuant to the terms of the Founders Registration Rights Agreement and that can
be sold without exceeding the Maximum Number of Shares; (iii) third, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (i) and (ii), the shares of Common Stock or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; and (iv) fourth, to the extent that the Maximum Number of
Shares have not been reached under the foregoing clauses (i), (ii), and (iii),
the shares of Common Stock that other shareholders desire to sell that can be
sold without exceeding the Maximum Number of Shares.


      
        
           


        

        
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      (e)           Withdrawal.  If
a majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect to
withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration.  If the majority-in-interest of
the Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in Section 1.02(c).

       

      Section
1.03.         Piggy-Back
Registration.

       

      (a)           Piggy-Back
Rights.  Subject to the restrictions on transfer set forth in
Article II hereof,  if at anytime that any Registrable Securities are
outstanding the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering of equity securities, or securities
or other obligations exercisable or exchangeable for, or convertible into,
equity securities, by the Company for its own account or for shareholders of the
Company for their account (or by the Company and by shareholders of the Company
including, without limitation, pursuant to Section
1.02), other than a Registration Statement (i) filed in connection
with any employee stock option or other benefit plan, (ii) for an exchange offer
or offering of securities solely to the Company’s existing shareholders, (iii)
for an offering of debt that is convertible into equity securities of the
Company or (iv) for a dividend reinvestment plan, then the Company shall (x)
give written notice of such proposed filing to the holders of Registrable
Securities as soon as practicable but in no event less than ten (10) days before
the anticipated filing date, which notice shall describe the amount and type of
securities to be included in such offering, the intended method(s) of
distribution, and the name of the proposed managing Underwriter or Underwriters,
if any, of the offering, and (y) offer to the holders of Registrable Securities
in such notice the opportunity to register the sale of such number of shares of
Registrable Securities as such holders may request in writing within fifteen
(15) days following receipt of such notice (a “Piggy-Back
Registration”).  The Company shall cause such Registrable
Securities to be included in such registration and shall use its best efforts to
cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company and to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method(s) of
distribution thereof.  All holders of Registrable Securities proposing
to distribute their securities through a Piggy-Back Registration that involves
an Underwriter or Underwriters shall enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for such Piggy-Back
Registration.

       

      (b)           Reduction of
Offering.  If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the
Company and the holders of Registrable Securities in writing that the dollar
amount or number of shares of Common Stock which the Company desires to sell,
taken together with shares of Common Stock, if any, as to which registration has
been demanded pursuant to written contractual arrangements with persons other
than the holders of Registrable Securities hereunder, the Registrable Securities
as to which registration has been requested under this Section
1.03, and the shares of Common Stock, if any, as to which
registration has been requested pursuant to the written contractual piggy-back
registration rights of other shareholders of the Company, exceeds the Maximum
Number of Shares, then the Company shall include in any such
registration:


      
        
           


        

        
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      (i)           If
the registration is undertaken for the Company’s account: (A) first, the shares
of Common Stock or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock, if any, including the Registrable
Securities, as to which registration has been requested pursuant to written
contractual piggy-back registration rights of security holders (pro rata in
accordance with the number of shares of Common Stock which each such person has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right to
request such inclusion) that can be sold without exceeding the Maximum Number of
Shares; and

       

      (ii)           If
the registration is a “demand” registration
undertaken at the demand of persons other than the holders of Registrable
Securities pursuant to written contractual arrangements with such persons, (A)
first, the shares of Common Stock for the account of the demanding persons that
can be sold without exceeding the Maximum Number of Shares; (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number of
Shares; and (C) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A) and (B), the shares of Common Stock
as to which registration has been requested pursuant to the terms of the
Founders Registration Rights Agreement; (C) fourth, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A),
(B) and (C), the Registrable Securities as to which registration has been
requested under this Section 1.03 (pro rata in accordance with the number of
shares of Registrable Securities held by each such holder) and (E) fifth, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A), (B), (C) and (D), the shares of Common Stock, if any, as
to which registration has been requested pursuant to written contractual
piggy-back registration rights which other shareholders desire to sell that can
be sold without exceeding the Maximum Number of Shares.

       

      (c)           Withdrawal.  Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement.  The Company may also
elect to withdraw a registration statement at any time prior to the
effectiveness of the Registration Statement.  Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in this Section
1.03.


      
        
           


        

        
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      Section
1.04.         Registrations on Form
S-3.  The holders of Registrable Securities may at any time and
from time to time that any Registrable Securities are outstanding, request in
writing that the Company register the resale of any or all of such Registrable
Securities on Form S-3 or any similar short-form registration which may be
available at such time (“Form S-3”); provided,
however, that the Company shall not be obligated to effect such request through
an underwritten offering.  Upon receipt of such written request, the
Company will promptly give written notice of the proposed registration to all
other holders of Registrable Securities, and, as soon as practicable thereafter,
effect the registration of all or such portion of such holder’s or holders’
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder or holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration pursuant to this Section
1.04:  (i) if Form S-3 is not available for such offering;
or (ii) if the holders of the Registrable Securities, together with the holders
of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) at any aggregate price to the public of less than
$500,000.  Registrations effected pursuant to this Section
1.04 shall not be counted as Demand Registrations effected pursuant
to Section
1.02.

       

      Section
1.05.         Filings;
Information.  Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to this Article
I, the Company shall use its best efforts to effect the registration
and sale of such Registrable Securities in accordance with the intended
method(s) of distribution thereof as expeditiously as practicable, and in
connection with any such request:

       

      (a)           Filing Registration
Statement.  The Company shall, as expeditiously as possible and
in any event within sixty (60) days after receipt of a request for a Demand
Registration pursuant to Section
1.02, prepare and file with the Commission a Registration Statement
on any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the sale of
all Registrable Securities to be registered thereunder in accordance with the
intended method(s) of distribution thereof, and shall use its best efforts to
cause such Registration Statement to become and remain effective for the period
required by Section 1.05(c);
provided, however, that the Company shall have the right to defer any
Demand Registration for up to ninety (90) days, and any Piggy-Back Registration
for such period as may be applicable to deferment of any demand registration to
which such Piggy-Back Registration relates, in each case if the Company shall
furnish to the holders a certificate signed by the Chief Executive Officer of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be materially detrimental to the Company and its
shareholders for such Registration Statement to be effected at such time;
provided further, however, that the Company shall not have the right to exercise
the right set forth in the immediately preceding proviso more than once in any
365-day period in respect of a Demand Registration hereunder.


      
        
           


        

        
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      (b)           Copies.  The
Company shall, prior to filing a Registration Statement or prospectus, or any
amendment or supplement thereto, furnish without charge to the holders of
Registrable Securities included in such registration, and such holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each
amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned by
such holders.

       

      (c)           Amendments and
Supplements.  The Company shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective and in
compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement (which period shall not exceed the sum of one
hundred eighty (180) days plus any period during which any such disposition is
interfered with by any atop order or injunction of the Commission or any
governmental agency or court) or such securities have been withdrawn from
inclusion in such Registration Statement.

       

      (d)           Notification.  After
the filing of a Registration Statement, the Company shall promptly, and in no
event more than two (2) business days after such filing, notify the holders of
Registrable Securities included in such Registration Statement of such filing,
and shall further notify such holders promptly and confirm such advice in
writing in all events within two (2) business days of the occurrence of any of
the following: (i) when such Registration Statement becomes effective; (ii) when
any post-effective amendment to such Registration Statement becomes effective;
(iii) the issuance or threatened issuance by the Commission of any stop order
(and the Company shall take all actions required to prevent the entry of such
stop order or to remove it if entered); and (iv) any request by the Commission
for any amendment or supplement to such Registration Statement or any prospectus
relating thereto or for additional information or of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by
such Registration Statement, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that before
filing with the Commission a Registration Statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference,
the Company shall furnish to the holders of Registrable Securities included in
such Registration Statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and legal counsel with a reasonable opportunity
to review such documents and comment thereon, and the Company shall not file any
Registration Statement or prospectus or amendment or supplement thereto,
including documents incorporated by reference, to which such holders or their
legal counsel shall reasonably object.


      
        
           


        

        
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      (e)           State Securities Laws
Compliance.  The Company shall use commercially reasonable
efforts to (i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of
such jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other federal or state authorities as may be necessary
by virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided,
however, that in no event shall the Company be required to register the
Registrable Securities in a jurisdiction in which such registration would cause
the Company to be obligated to qualify to do business in any such jurisdiction,
or would subject the Company to taxation as a foreign corporation doing business
in such jurisdiction.

       

      (f)           Agreements for
Disposition.  The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities.  The representations,
warranties and covenants of the Company in any underwriting agreement which are
made to or for the benefit of any Underwriters, to the extent applicable, shall
also be made to and for the benefit of the holders of Registrable Securities
included in such registration statement.  No holder of Registrable
Securities included in such registration statement shall be required to make any
representations or warranties in the underwriting agreement except, if
applicable, with respect to such holder’s organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such holder’s material agreements and organizational documents, and with respect
to written information relating to such holder that such holder has furnished in
writing expressly for inclusion in such Registration
Statement.  Holders of Registrable Securities shall agree to such
covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that
type.  Further, such holders shall cooperate fully in the preparation
of the registration statement and other documents relating to any offering in
which they include securities pursuant to Article
I hereof.  Each holder shall also furnish to the Company
such information regarding itself, the Registrable Securities held by such
holder, and the intended method of disposition of such securities shall be
reasonably required to effect the registration of the Registrable
Securities.

       

      (g)           Cooperation.  The
principal executive officer of the Company, the principal financial officer of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.

       

      (h)           Records.  The
Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such
Registration Statement.


      
        
           


        

        
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      (i)           Opinions and Comfort
Letters.  The Company shall furnish to each holder of
Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any
Underwriter.  In the event no legal opinion is delivered to any
Underwriter, the Company shall furnish to each holder of Registrable Securities
included in such Registration Statement, at any time that such holder elects to
use a prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.

       

      (j)           Earnings
Statement.  The Company shall comply with all applicable rules
and regulations of the Commission and the Securities Act and make available to
its shareholders, as soon as practicable, an earnings statement covering a
period of twelve (12) months, beginning within three (3) months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.

       

      (k)           Listing.  The
Company shall use its best efforts to cause all Registrable Securities included
in any registration to be listed on such exchanges or otherwise designated for
trading in the same manner as similar securities issued by the Company are then
listed or designated or, if no such similar securities are then listed or
designated, in a manner satisfactory to the holders of a majority of the
Registrable Securities included in such registration.

       

      Section
1.06.         Obligation to Suspend
Distribution.  Upon receipt of any notice from the Company of
the happening of any event of the kind described in Section
1.05(d)(iv), or, in the case of a resale registration on Form S-3
pursuant to Section
1.04 hereof, upon any suspension by the Company, pursuant to a
written insider trading compliance program adopted by the Company’s Board of
Directors, of the ability of all “insiders” covered by such program to transact
in the Company’s securities because of the existence of material non-public
information and holder would be deemed an “insider” under such program, each
holder of Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by Section
1.05(d)(iv) or the restriction on the ability of “insiders” to
transact in the Company’s securities is removed or is inapplicable to such
holder, as applicable, and, if so directed by the Company, each such holder will
deliver to the Company all copies, other than permanent file copies then in such
holder’s possession, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice.


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      Section
1.07.         Registration
Expenses.  The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section
1.02, any Piggy-Back Registration pursuant to Section
1.03, and any registration on Form S-3 effected pursuant to Section
1.04, and all expenses incurred in performing or complying with its
other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including, without limitation; (i) all registration
and filing fees; (ii) fees and expenses of compliance with securities or “blue
sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses; (iv)
the Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (v) the fees and expenses incurred in
connection with the listing of the Registrable Securities as required by Section
1.05(k); (vi) Financial Industry Regulatory Authority fees; (vii)
fees and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including the
expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 1.05(i)); (viii) the fees and
expenses of any special experts retained by the Company in connection with such
registration; and (ix) the reasonable fees and expenses of one legal counsel
selected by the holders of a majority-in-interest of the Registrable Securities
included in such registration.  The Company shall have no obligation
to pay any underwriting discounts or selling commissions or transfer taxes, if
any, attributable to the Registrable Securities being sold by the holders
thereof, which underwriting discounts or selling commissions or transfer taxes,
if any, shall be borne by such holders.  Additionally, in an
underwritten offering, all selling shareholders and the Company shall bear the
expenses of the underwriter pro rata in proportion to the respective amount of
shares each is selling in such offering.

       

      Section
1.08.         Information.  The
holders of Registrable Securities shall provide such information relating to
such holder and its intended method of distribution of such Registrable
Securities as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
this Article
I and in connection with the Company’s obligation to comply with
federal and applicable state securities laws.

       

      Section
1.09.         Holder
Obligations.  No holder of Registrable Securities may
participate in any underwritten offering pursuant to this Article
I unless such holder (i) agrees to sell only such holder’s
Registrable Securities on the basis reasonably provided in any underwriting
agreement, and (ii) completes, executes and delivers any and all questionnaires,
powers of attorney, custody agreements, indemnities, underwriting, agreements
and other documents reasonably required by or under the terms of any
underwriting agreement or as reasonably requested by the
Company.


      
        
           


        

        
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      Section
1.10.         Indemnification and
Contribution.

       

      (a)           Indemnification by the
Company.  The Company agrees to indemnify and hold harmless
each Investor and each other holder of Registrable Securities, and each of their
respective officers, employees, affiliates, directors, partners, members and
agents, and each person, if any, who controls an Investor and each other holder
of Registrable Securities (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified
Party”), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue statement (or allegedly untrue statement) of a material fact
contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to such Registration Statement, or arising out of
or based upon any omission (or alleged omission) to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration; and the Company shall promptly reimburse the Investor Indemnified
Party for any legal and any other expenses reasonably incurred by such Investor
Indemnified Party in connection with investigating and defending any such
expense, loss, judgment, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon and
in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein.  The Company also shall
indemnify any Underwriter of the Registrable Securities, their officers,
affiliates, directors, partners, members and agents and each person who controls
such Underwriter on substantially the same basis as that of the indemnification
provided above in this Section
1.10(a).

       

      (b)           Indemnification by Holders
of Registrable Securities.  Each selling holder of Registrable
Securities will, in the event that any registration is being effected under the
Securities Act pursuant to this Agreement of any Registrable Securities held by
such selling holder, indemnify and hold harmless the Company, each of its
directors and officers and each underwriter (if any), and each other person, if
any, who controls such selling holder or such underwriter (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), against any
losses, claims, judgments, damages or liabilities, whether joint or several,
insofar as such losses, claims, judgments, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
allegedly untrue statement of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder expressly
for use therein, and shall reimburse the Company, its directors and officers,
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigation or defending any such
loss, claim, damage, liability or action.  Each selling holder’s
indemnification obligations hereunder shall be several and not joint and shall
be limited to the amount of any net proceeds (after payment of all underwriting
fees, discounts, commissions and taxes) actually received by such selling holder
from the sale of Registrable Securities which gave rise to such indemnification
obligation.


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      (c)           Conduct of Indemnification
Proceedings.  Promptly after receipt by any person of any
notice of any loss, claim, damage or liability or any action in respect of which
indemnity may be sought pursuant to Section
1.10(a) or (b), such person (the “Indemnified Party”)
shall, if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying Party”)
in writing of the loss, claim, judgment, damage, liability or action; provided,
however, that the failure by the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have to such Indemnified Party hereunder, except and
solely to the extent the Indemnifying Party is actually prejudiced by such
failure.  If the Indemnified Party is seeking indemnification with
respect to any claim or action brought against the Indemnified Party, then the
Indemnifying Party shall be entitled to participate in such claim or action,
and, to the extent that it wishes, jointly with all other Indemnifying Parties,
to assume control of the defense thereof with counsel reasonably satisfactory to
the Indemnified Party.  After notice from the Indemnifying Party to
the Indemnified Party of its election to assume control of the defense of such
claim or action, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which both the
Indemnified Party and the Indemnifying Party are named as defendants, the
Indemnified Party shall have the right to employ separate counsel (but no more
than one such separate counsel) to represent the Indemnified Party and its
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by
such Indemnifying Party if, based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them.  No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, consent to entry of judgment or effect any settlement
of any claim or pending or threatened proceeding in respect of which the
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such judgment or settlement
includes an unconditional release of such Indemnified Party from all liability
arising out of such claim or proceeding.

       

      (d)           Contribution.

       

      (i)           If
the indemnification provided for in the foregoing Section 1.10(a), (b) and (c)
is unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable
considerations.  The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      (ii)           The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section
1.10(d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding Section
1.10(d)(i).  The amount paid or payable by an Indemnified
Party as a result of any loss, claim, damage, liability or action referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim.  Notwithstanding the provisions of this Section
1.10(d), no holder of Registrable Securities shall be required to
contribute any amount in excess of the dollar amount of the net proceeds (after
payment of all underwriting fees, discounts, commissions and taxes) actually
received by such holder from the sale of Registrable Securities which gave rise
to such contribution obligation.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

       

      Section
1.11.         Rule
144.  The Company covenants that it shall file any filings
required to be filed by it under the Securities Act and the Exchange Act and
shall take such further action as the holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rules may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission but not Rule
144A.

       

      Section
1.12.         Requested
Consent.  The Company agrees to use commercially reasonable
efforts to obtain the necessary consents pursuant to the Founders Registration
Rights Agreement for the rights of the holders of Registrable Securities to
include shares in a “demand” registration pursuant to Section 1.03(b) pari passu
(rather than subordinate) to the rights with respect to shares of Common Stock
exercising piggy-back rights pursuant to the Founders Registration Rights
Agreement.  The Company shall provide the Investors with prompt
written notice at such time as it has obtained such consent.  Upon
obtaining such consent, Section 1.03(b) shall automatically, and without further
action by the Company or any Investor, be amended in its entirety to read as
follows:


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      “(b)        If
the registration is a “demand” registration
undertaken at the demand of persons other than the holders of Registrable
Securities pursuant to written contractual arrangements with such persons, (A)
first, the shares of Common Stock for the account of the demanding persons that
can be sold without exceeding the Maximum Number of Shares; (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number of
Shares; and (C) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A) and (B), the shares of Common Stock
as to which registration has been requested pursuant to the terms of the
Founders Registration Rights Agreement and the Registrable Securities to which
registration has been requested under this Section 1.03 (pro rata in accordance
with the number of shares of Registrable Securities and Common Stock held by
each such holder) and (D) fourth, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clauses (A), (B) and (C), the
shares of Common Stock, if any, as to which registration has been requested
pursuant to written contractual piggy-back registration rights which other
shareholders desire to sell that can be sold without exceeding the Maximum
Number of Shares.”

       

      ARTICLE
II


       

      TRANSFER RESTRICTIONS; RIGHT
OF FIRST OFFER

       

      Section
2.01.         Transferability of
Shares.  Subject to the provisions of Section
2.02 below, no shares of Series B Preferred Stock may, directly or
indirectly, be sold, assigned, transferred, gifted or exchanged, nor may any
Investor (or transferee thereof) offer to do any of the foregoing (each, a
“Transfer”),
nor may any direct or indirect interest in any Investor be, directly or
indirectly, Transferred by any holder thereof, nor may any stockholder or other
holder of an ownership interest in Investor which is not a natural person offer
to do any of the foregoing, and no Transfer by an Investor (or transferee
thereof) or holder of an ownership interest in an Investor shall be binding upon
the Company or any Investor, in each case unless (i) such Transfer is expressly
permitted by this Article
II and (ii) the Company receives an executed copy of the documents
effecting such Transfer and such documents are in compliance with the
requirements of this Article
II and otherwise in form and substance
reasonably satisfactory to the Company.  No Company Shares may be
pledged, hypothecated, optioned or encumbered, nor may any direct or indirect
ownership interests in an Investor may be pledged, hypothecated, optioned or
encumbered, nor may any offer to do any of the foregoing be made, without the
prior written consent of the Company in its sole discretion.  Each
Investor agrees to comply, and to cause its owners and transferees to comply (as
applicable), with the provisions of this Article
II.  An Investor’s Company Shares (or, in the case of an
Investor which is not a natural person, direct (but in no event indirect)
ownership interests in such Investor) may be Transferred solely:

       

      (a)           with
the prior written consent of the Company, which consent may be granted or
withheld by the Company in its reasonable discretion;

       

      (b)           (i)
upon the death of such Investor (in the case of an Investor who is a natural
person), with respect to Company Shares held by such Investor, or upon the death
of a direct holder of ownership interests in such Investor (in the case of an
Investor which is not a natural person), with respect to the direct ownership
interests in such Investor held by such deceased holder, in either such case
such specified ownership interests may be Transferred by will or the laws of
descent and distribution (without the consent of the Company, but subject in all
cases to the provisions regarding redemption of such Company Shares by the
Company pursuant to Section 10 of the Certificate of Designation for the Series
B Preferred Stock, which shall continue to be binding upon the Company Shares of
such Investor (and the holders thereof) notwithstanding such death) or (ii) in
connection with the appointment of a legal guardian or conservator for such
Investor or a direct holder of equity interests therein (as applicable) in the
event of incapacity, to the extent such legal guardian or conservator succeeds
as a matter of law to record ownership of such Company Shares or direct
ownership interests (as applicable) and provided that such Investor or holder of
direct ownership interests (as applicable) remains the beneficial owner of such
interests; or


      
        
           


        

        
          15

          
            

          

        

        
           


        

      


      (c)           (i)
a Management Stockholder may Transfer his or her Company Shares, or (ii) direct
ownership interests in an Investor which is not a natural person may be
Transferred by its related Management Stockholder, in either such case to
members of such Management Stockholder’s Immediate Family (or trusts for the
benefit of such Management Stockholder or the members of such Management
Stockholder’s Immediate Family, provided that any such trust does not require or
permit distribution of such interests other than to such Management Stockholder,
members of such Management Stockholder’s Immediate Family, or such Management
Stockholder’s related original Investor that is a party hereto).

       

      provided
that in the case of (b) or (c) above, (i) the transferee first enters into an
agreement with the Company in form and substance reasonably satisfactory to the
Company agreeing to be bound by the provisions of this Agreement, and (ii)
whether or not the transferee enters into such an agreement, such Company Shares
and ownership interests in such Investor (as applicable) shall thereafter remain
subject to this Agreement.  The transferees pursuant to the provisions
of Section 2.01(b) and (c) hereof, and, to the extent set forth in any consent
of the Company pursuant to Section 2.01(a), the transferees pursuant to Section
2.01(a) are referred to as “Permitted
Transferees”.

       

      (d)           For
purposes of this Section 2.01, the following terms shall have the meanings set
forth below:

       

      (i)           “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).

       

      (ii)           “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.

       

      (iii)           “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.


      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      (iv)           “Management
Stockholder(s)” shall mean (a) in the case of any Investor which is a
natural person, such Investor, and (b) in the case of any Investor which is not
a natural person, that certain employee of Aston (or one of its Controlled
Affiliates) who is the owner of the issued and outstanding capital stock of, or
other equity interests in, such Investor and is listed as such on Schedule A hereto
(including any such employee after such employee has transferred any of his or
her interest in such Investor to a Permitted Transferee).

       

      (v)           “Person” means any
individual, partnership (limited or general), corporation, limited liability
company, limited liability partnership, association, trust, joint venture,
unincorporated organization or other entity.

       

      Section
2.02.         Right of First
Offer.  In the event that any Investor proposes to Transfer any
shares of Common Stock issued upon the conversion of Series B Preferred Stock
(“Conversion
Shares”) which would cause the aggregate number of Conversion Shares
Transferred by such Investor (or any group of Investors acting in concert with
respect to the Transfer of Conversion Shares) to exceed 300,000 shares (as
adjusted on account of any stock splits, stock dividends or similar events
affecting the Common Stock) after the date hereof, the selling Investor or
Investors shall furnish to the Company, a notice, stating such Investor’s or
Investors’ desire to make such a Transfer and the number of shares of Conversion
Shares to be Transferred (the “Offered
Shares”).  At any time within one (1) business day of the
receipt of a notice pursuant to the preceding sentence (the “Right of First Offer
Period”), the Company shall have the right by delivery of a written
notice to the selling Investor (the “Offer Notice”) to
offer to purchase all, but not less than all, of the Offered
Shares.  Each Offer Notice shall constitute an irrevocable offer by
the Company to the Investor to purchase the Offered Shares described in the
Offer Notice at the price specified in the Offer Notice.  At any time
in the three (3) trading day period following delivery of the Offer Notice the
selling Investor may (i) elect to accept the offer pursuant to the Offer Notice
by delivery of written notice to the Company or (ii) sell any of the Offered
Shares, publicly or privately, but in compliance with applicable securities
laws, at a price per share in excess of the price per share provided in the
Offer Notice.  For the avoidance of doubt, if any proposed Transfer by
an Investor (or any group of Investors acting in concert with respect to such
Transfer) would result in the Transfer of more than an aggregate of 300,000
Conversion Shares after the date hereof (as adjusted on account of any stock
splits, stock dividends or similar event affecting the Common Stock) by such
Investor after the date hereof, all of the Conversion Shares included in such
proposed Transfer shall be subject to this terms of this Section
2.02.

       

      (a)           Exercise.  In
the event that the Company fails to deliver a timely Offer Notice, then the
selling Investor or Investors may sell any of the Offered Shares, publicly or
privately, but in compliance with applicable securities laws, on any terms and
conditions and for any price, during the ten (10) trading day period following
the expiration of the Right of First Offer Period.  If, at the end of
such ten (10) trading day period, the Investor shall not have sold the Offered
Shares, it shall be necessary for the terms of this Section 2.02
separately complied with, in order to consummate a Transfer, which would
otherwise be subject to this Section
2.02.


      
        
           


        

        
          17

          
            

          

        

        
           


        

      


      (b)           Closing.  If
the selling Investor accepts the Offer set forth in the Offer Notice, the
Investor or Investors shall be required to sell the Offered Shares to the
Company, and the Company shall be required to purchase from the Investor or
Investors the Offered Shares, for the price set forth in the Offer
Notice.  The sole representations and warranties from the selling
Investor to be contained in the purchase agreement for the purchase of the
Offered Shares shall be representations and warranties substantially similar to
those set forth in Sections 4.01, 4.02(b), 4.05 and 4.06 of the Exchange
Agreement.  The closing of the purchase and sale of the Offered Shares
to the Company will take place as soon as is reasonably practicable thereafter,
but in any event no later than ten (10) days after the Investor’s delivery of a
written notice accepting the Offer, and at such date, time and place as the
Company and the Investors may reasonably determine.

       

      Section
2.03.         Restrictive
Legends.  It is understood and agreed that the certificates
evidencing the shares of Series B Preferred Stock and the certificates
evidencing the shares of Common Stock issued upon conversion of Series B
Preferred Stock until such time as such shares of Common Stock represented by
such certificate are Transferred in compliance with the provisions of this
Article II, shall bear the following legends, in addition to any other legends
required by Delaware law:

       

      “THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO
REGISTERED OR IN A MANNER EXEMPT FROM REGISTRATION UNDER SUCH ACT.

       

      THE
SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF AN INVESTOR RIGHTS AGREEMENT WHICH PLACES RESTRICTIONS ON THE TRANSFERABILITY
OF THE SHARES REPRESENTED HEREBY.  A COPY OF THE INVESTOR RIGHTS
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.”

       

      ARTICLE
III


       

      MISCELLANEOUS.

       

      Section
3.01.         Termination.  This
Agreement shall terminate, and have no further force and effect, (i) when the
Company shall consummate a transaction or series of related transactions deemed
to be a Liquidation Event pursuant to, and defined in, the Company’s Certificate
of Designation for the Series B Preferred Stock, as the same may be amended from
time to time or (ii) upon the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding and Series B Preferred
Stock then outstanding, voting together on an as-converted basis with the
Registrable Securities.


      
        
           


        

        
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      Section
3.02.         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 the
Company:

       

      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
Investors or Management Stockholders:

       

      120 North
LaSalle Street, 25th Floor

      Chicago,
Illinois  60601

      Facsimile:  312-268-1335

       

      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
3.03.         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 the
Company and the holders of a majority of the Registrable Securities then
outstanding and Series B Preferred Stock then outstanding, voting together on an
as-converted basis with the Registrable Securities.


      
        
           


        

        
          19

          
            

          

        

        
           


        

      


      Section
3.04.         Successors and
Assigns.  This Agreement shall be so binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

       

      Section
3.05.         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
3.06.         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
3.07.         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
3.08.         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 3.09 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 3.02 hereof.  The parties agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions.


      
        
           


        

        
          20

          
            

          

        

        
           


        

      


      Section
3.09.         Dispute
Resolution.  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 3.09 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.

       

      Section
3.10.         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
3.11.         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.


       

      [Signature
Pages Follow]


      
        
           


        

        
          21

          
            

          

        

        
           


        

      


      The
parties hereto have executed this Investor Rights Agreement as of the date first
written above.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                	
                                                                                                                        COMPANY:

                                                                                                                      
	 
      
	
                                                                                                                        HIGHBURY
      FINANCIAL INC.

                                                                                                                      
	 
      	 
      
	
                                                                                                                        By:

                                                                                                                      	
                                                                                                                        /s/
      Richard S. Foote

                                                                                                                      
	 
      	
                                                                                                                        Name:
      Richard S. Foote

                                                                                                                      
	 
      	
                                                                                                                        Title:
      President and Chief Executive Officer

                                                                                                                      
	 
      	 
      
	
                                                                                                                        INVESTORS:

                                                                                                                      
	 
      
	
                                                                                                                        SDB
      ASTON, INC.

                                                                                                                      
	 
      	 
      
	
                                                                                                                        By:

                                                                                                                      	
                                                                                                                        /s/
      Stuart D. Bilton

                                                                                                                      
	 
      	
                                                                                                                        Name:
      Stuart D. Bilton

                                                                                                                      
	 
      	
                                                                                                                        Title:President

                                                                                                                      
	 
      
	
                                                                                                                        KCA
      ASTON, INC.

                                                                                                                      
	 
      	 
      
	
                                                                                                                        By:

                                                                                                                      	
                                                                                                                        /s/
      Kenneth C. Andersen

                                                                                                                      
	 
      	
                                                                                                                        Name:
      Kenneth C. Andersen

                                                                                                                      
	 
      	
                                                                                                                        Title:
      President

                                                                                                                      
	 
      	 
      
	
                                                                                                                        GFD
      ASTON, INC.

                                                                                                                      
	 
      	 
      
	
                                                                                                                        By:

                                                                                                                      	
                                                                                                                        /s/
      Gerald F. Dillenburg

                                                                                                                      
	 
      	
                                                                                                                        Name:
      Gerald F. Dillenburg

                                                                                                                      
	 
      	
                                                                                                                        Title:
      President

                                                                                                                      
	 
      
	
                                                                                                                        CRD
      ASTON, INC.

                                                                                                                      
	 
      	 
      
	
                                                                                                                        By:

                                                                                                                      	
                                                                                                                        /s/
      Christine R. Dragon

                                                                                                                      
	 
      	
                                                                                                                        Name:
      Christine R. Dragon

                                                                                                                      
	 
      	
                                                                                                                        Title:
      President

                                                                                                                      
	 
      
	
                                                                                                                        JH
      ASTON, INC.

                                                                                                                      
	 
      	 
      
	
                                                                                                                        By:

                                                                                                                      	
                                                                                                                        /s/
      Joseph Hays

                                                                                                                      
	 
      	
                                                                                                                        Name:
      Joseph Hays

                                                                                                                      
	 
      	
                                                                                                                        Title:
      President

                                                                                                                      


                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           


        

        
          22

          
            

          

        

        
           


        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                            
                                                                                                                                                              
                                                                                                                                                                	
                                                                                                                                                                        BCH
      ASTON, INC.

                                                                                                                                                                      
	 
      	 
      
	
                                                                                                                                                                        By:

                                                                                                                                                                      	
                                                                                                                                                                        /s/
      Betsy C. Heaberg

                                                                                                                                                                      
	 
      	
                                                                                                                                                                        Name:
      Betsy C. Heaberg

                                                                                                                                                                      
	 
      	
                                                                                                                                                                        Title:
      President

                                                                                                                                                                      
	 
      	 
      
	
                                                                                                                                                                        DAR
      ASTON, INC.

                                                                                                                                                                      
	 
      	 
      
	
                                                                                                                                                                        By:

                                                                                                                                                                      	
                                                                                                                                                                        /s/
      David A. Robinow

                                                                                                                                                                      
	 
      	
                                                                                                                                                                        Name:
      David A. Robinow

                                                                                                                                                                      
	 
      	
                                                                                                                                                                        Title:
      President

                                                                                                                                                                      
	 
      
	
                                                                                                                                                                        JPR
      ASTON, INC.

                                                                                                                                                                      
	 
      	 
      
	
                                                                                                                                                                        By:

                                                                                                                                                                      	
                                                                                                                                                                        /s/
      John P. Rouse

                                                                                                                                                                      
	 
      	
                                                                                                                                                                        Name:
      John P. Rouse

                                                                                                                                                                      
	 
      	
                                                                                                                                                                        Title:
      President

                                                                                                                                                                      
	 
      
	
                                                                                                                                                                        MANAGEMENT STOCKHOLDERS:

                                                                                                                                                                      
	 
      	 
      
	/s/
      Stuart D. Bilton
	Stuart
      D. Bilton
	 
      	 
      
	/s/
      Kenneth C. Anderson
	Kenneth
      C. Anderson
	 
      	 
      
	/s/
      Gerald Dillenburg
	Gerald
      Dillenburg
	 
      	 
      
	/s/
      Christine R. Dragon
	Christine
      R. Dragon
	 
      	 
      
	/s/
      Joseph Hays
	Joseph
      Hays


                                                                                                                                                              

                                                                                                                                                            

                                                                                                                                                          

                                                                                                                                                        

                                                                                                                                                      

                                                                                                                                                    

                                                                                                                                                  

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                
                  
                    
                      	
                              /s/
      Betsy Heaberg

                            
	
                              Betsy
      Heaberg

                            
	 
      
	
                              /s/
      David Robinow

                            
	
                              David
      Robinow

                            
	 
      
	
                              /s/
      John Rouse

                            
	
                              John
      Rouse

                            


                    

                  

                

              

            

          

        

      


      
        
           


        

        
          24

          
            

          

        

        
           


        

      

       

      SCHEDULE
A

       

      
        
          	
                  Investors

                
	 
      
	
                  SDB
      Aston, Inc.

                
	
                  KCA
      Aston, Inc.

                
	
                  GFD
      Aston, Inc.

                
	
                  CRD
      Aston, Inc.

                
	
                  JH
      Aston, Inc.

                
	
                  BCH
      Aston, Inc.

                
	
                  DAR
      Aston, Inc.

                
	
                  JPR
      Aston, Inc.

                


        

      

      


       

      
        
          	
                  Management Stockholders

                
	 
      
	
                  Stuart
      Bilton

                  Kenneth
      C. Anderson

                  Gerald
      Dillenburg

                  Christine
      R. Dragon

                  Joseph
      Hays

                  Betsy
      Heaberg

                  David
      Robinow

                  John
      Rouse

                


        

      

       

      
        
           


        

        
          25