“ Agreement ” shall have the
meaning specified in the preamble hereto.
“ Asserted Liability ” shall
have the meaning specified in Section 7.02(a) hereof.
“ Aston ” shall have the
meaning specified in the preamble hereto.
“ Aston LLC Agreement ” shall
mean the Third Amended and Restated Limited Liability Company
Agreement of Aston Asset Management LLC, of even date herewith, as
amended from time to time.
“ Certificate ” shall mean
the Certificate of Formation of Aston, as the same may be amended
and/or restated from time to time in accordance with the terms
hereof.
“ Claims Notice ” shall have
the meaning specified in Section 7.02(a) hereof.
“ Code ” shall mean the
United States Internal Revenue Code of 1986, as from time to time
amended, and any successor thereto, together with all regulations
promulgated thereunder.
“ Committee Vote ” shall have
the meaning specified in Section 2.02(b)(iv) hereof.
“ Common Stock ” means the
common stock, par value $0.0001 per share, of Highbury.
“ Controlled Affiliate ”
shall mean, with respect to a Person, any Affiliate of such Person
under its “ control ,” as the term “
control ” is defined in the definition of
Affiliate.
“ Covered Person ” shall mean
a Management Stockholder or any Officer.
“ Eligible Person ” shall
have the meaning specified in Section 2.02(b)(i) hereof.
“ ERISA ” shall mean the
Employee Retirement Income Security Act of 1974, as amended from
time to time, and any successor to such Act.
“ Event of Default ” shall
have the meaning specified in Section 6.01 hereof.
“ Exchange Agreement ” shall
have the meaning set forth in the recitals hereto.
“ Expenses ” shall have the
meaning specified in Section 2.05(b) hereof.
“ For Cause ” shall mean,
with respect to the termination of a Management Stockholder’s
employment with Aston (or any of its Controlled Affiliates), or his
or her removal from the Management Committee or from his or her
position as an Officer, any of the following:
(a) The
Management Stockholder has been convicted of or indicted for (i)
any criminal offense which is classified as a felony in the United
States, or (ii) any other criminal offense which involves a
violation of federal or state securities laws or regulations (or
equivalent laws or regulations of any country or political
subdivision thereof in which the criminal offense occurs),
embezzlement, fraud, wrongful taking or misappropriation of
property, theft, or any other crime involving
dishonesty;
(b) The
Management Stockholder has persistently and willfully failed to
perform his or her duties, including, without limitation,
persistently and willfully violating or breaching any material
provision of the Management Agreement, or has failed to devote
substantially all of his or her working time to the performance of
such duties, and in either such case such failure has not been
cured by the Management Stockholder within thirty (30) days
following written notice; or
(c) The
Management Stockholder has (i) engaged in a Prohibited Competition
Activity, or (ii) violated or breached Section 2.07 of the Exchange
Agreement; provided , however , that, in any such
case described in clauses (i) or (ii) of this paragraph (c), in the
event such action by such Management Stockholder has not resulted
(and, if cured, is not reasonably likely to result) in harm that is
material to Highbury, Aston or any of their respective Controlled
Affiliates or any of the Funds, such Management Stockholder shall
be provided with an opportunity to cure such action promptly (and
in any event within thirty (30) days) following written notice
thereof ( provided that such an opportunity to cure shall be
available to a particular Management Stockholder solely with
respect to the first three such actions by such Management
Stockholder with respect to which such a written notice is
provided, and provided , further , that such an
opportunity to cure shall in no event be provided to a Management
Stockholder if his or her violation, breach or other applicable
action was willful or reckless).
“ Fund ” shall mean any
Mutual Fund or other commingled fund for which Aston provides
Investment Services.
“ GAAP ” shall mean U.S.
generally accepted accounting principles.
“ Highbury ” shall have the
meaning set forth in the preamble hereto.
“ Immediate Family ” shall
mean, with respect to any natural person, (a) such person’s
spouse, parents, grandparents, children, grandchildren and
siblings, (b) such person’s former spouse(s) and current
spouses of such person’s children, grandchildren and siblings
and (c) estates, trusts, partnerships and other entities of which
substantially all of the interests are held directly or indirectly
by the foregoing.
“ Indebtedness ” shall mean,
with respect to a Person, (a) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under any financing
leases, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (e)
all obligations of such Person under non-competition agreements
reflected as liabilities on a balance sheet of such Person in
accordance with GAAP, (f) all liabilities secured by any Lien on
any property owned by such Persons even though such Person has not
assumed or otherwise become liable for the payment thereof, and (g)
all net obligations of such Person under interest rate, commodity,
foreign currency and financial markets swaps, options, futures and
other hedging obligations.
“ Independent Public Accountants
” shall mean any independent certified public accountant
retained by Aston and satisfactory to Highbury.
“ Investment Services ” shall
mean any services which involve (a) the management, administration,
solicitation or distribution of an investment account, Mutual Fund
or other commingled fund (or portions thereof or a group of
investment accounts, Mutual Funds or other commingled funds) for
compensation, (b) the giving of advice with respect to the
investment and/or reinvestment of assets or funds (or any group of
assets or funds) for compensation, or (c) otherwise acting as an
“investment adviser” within the meaning of the Advisers
Act.
“ Investor Rights Agreement ”
shall mean that certain Investor Rights Agreement, dated as of the
date hereof, among Highbury, the Management Stockholders and the
Persons named as Investors therein.
“ Lien ” shall mean any
mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any financing lease having substantially
the same economic effect as any of the foregoing) or any other
restrictions, liens or claims of any kind or nature whatsoever,
excluding liens of lessors under operating leases that do not
extend beyond the property leased. Notwithstanding the
foregoing, the following items shall not constitute Liens under
this Agreement (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by
appropriate legal proceedings promptly instituted and diligently
conducted and for which an adequate reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP
shall have been made; (ii) statutory Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen or other similar Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which an adequate
reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; and (iii)
statutory Liens incurred in the ordinary course of business in
connection with workers’ compensation, unemployment
insurances and other types of social security.
“ Losses ” shall have the
meaning specified in Section 7.01 hereof.
“ Majority Vote ” shall mean
the affirmative approval, by vote or written consent, of the
Persons holding a majority of the aggregate voting power of the
Series B Preferred Stock then outstanding.
“ Management Committee ”
shall have the meaning specified in Section 2.02(a)
hereof.
“ Management Stockholders ”
shall have the meaning specified in the preamble hereto.
“ Mutual Fund ” shall mean a
registered investment company (or series of registered investment
companies).
“ Officers ” shall have the
meaning specified in Section 2.03 hereof.
“ Operating Allocation ”
shall mean, for any period, an amount equal to the difference
between Revenues From Operations for such period and the
Owners’ Allocation for such period.
“ Owners’ Allocation ”
shall mean, for any period, the sum of the Owners’ Allocation
Percentage multiplied by the Revenues From Operations for such
period.
“ Owners Allocation Account ”
shall have the meaning specified in Section 5.02 hereof.
“ Owners’ Allocation
Expenditure ” shall have the meaning specified in Section
2.05(b) hereof.
“ Owners’ Allocation
Percentage ” shall mean twenty-eight percent
(28%).
“ Person ” means any
individual, partnership (limited or general), corporation, limited
liability company, limited liability partnership, association,
trust, joint venture, unincorporated organization or other
entity.
“ Predecessor Business ”
shall mean the business of the parties to the Purchase Agreement
immediately prior to the Closing (as such term is defined in the
Purchase Agreement).
“ Prohibited Competition Activity
” shall mean any of the following activities:
(a) directly
or indirectly, whether as owner, part owner, member, director,
officer, trustee, employee, agent or consultant for or on behalf of
any Person other than Aston or any Controlled Affiliate of Aston:
(i) diverting or taking away any funds or investors from any Fund;
(ii) soliciting or otherwise inducing or attempting to cause any
Person to divert or take away any assets or funds invested in such
Funds; or (iii) soliciting or otherwise inducing or attempting to
cause any subadviser, distributor or seller of the Funds to
terminate or reduce its services on behalf of the Funds;
and
(b) directly
or indirectly, whether as owner, part owner, partner, member,
director, officer, trustee, employee, agent or consultant for or on
behalf of any Person other than Aston or any Controlled Affiliate
of Aston, performing any Investment Services.
“ Purchase Agreement ” shall
mean that certain Asset Purchase Agreement, dated as of April 20,
2006, by and among ABN AMRO Asset Management Holdings, Inc., ABN
AMRO Investment Fund Services, Inc., ABN AMRO Asset Management,
Inc., Montag & Caldwell, Inc., Tamro Capital Partners LLC,
Veredus Asset Management LLC, River Road Asset Management LLC and
Aston.
“ Receipts Account ” shall
have the meaning set forth in Section 5.02 hereof.
“ Revenues From Operations ”
shall mean, for any period, the consolidated gross revenues of
Aston and any Controlled Affiliates thereof, determined on an
accrual basis in accordance with GAAP consistently applied (but
including other income such as interest, dividend income and gains
on the sale of assets); provided , however , that
Revenues From Operations (A) shall not include (a) proceeds during
such period from the sale, exchange or other disposition of all, or
substantially all, of the assets of Aston and its Controlled
Affiliates, (b) revenues from the issuance by Aston of securities
issued by Aston or any of its Controlled Affiliates, and (c)
payments received from third parties to the extent constituting
direct reimbursements of expenses previously paid from the
Operating Allocation (and any such payments shall be added back to
the Operating Allocation for the period in which such expenses were
originally paid from the Operating Allocation), and (B) shall be
reduced by payments made to PFPC, Inc. pursuant to the
Sub-Administration and Accounting Services Agreement, dated as of
April 1, 2000 by and between PFPC, Inc. and Alleghany Investment
Services, as amended.
“ Series B Preferred Stock ”
shall have the meaning set forth in the recitals hereto.
“ Term ” shall have the
meaning set forth in Section 4.01 hereof.
“ Transfer ” shall mean,
directly or indirectly, a sale, assignment, transfer, gift or
exchange, or offer to do any of the foregoing; and “
Transferred ” shall have the correlative
meaning.
In addition to the foregoing, other capitalized
terms used in this Agreement shall have the meaning ascribed
thereto in the text of this Agreement.
ARTICLE II
MANAGEMENT OF
ASTON
Section 2.01. Management in
General . Subject to the other terms and conditions
of this Agreement, including the delegations of power and authority
set forth in this Agreement, the management and control of the
business of Aston shall be vested exclusively in Highbury, and
Highbury shall have exclusive power and authority, in the name of
and on behalf of Aston, to perform all acts and do all things
which, in its sole discretion, it deems necessary or desirable to
conduct the business of Aston; provided , however ,
that Highbury shall not have any powers or privileges with respect
to those matters delegated exclusively to the Management Committee
pursuant to Section 2.02 hereof.
(a) Highbury
shall, subject to all applicable provisions of this Agreement, be
authorized in the name of and on behalf of Aston: (i) to enter
into, execute, amend, supplement, acknowledge and deliver any and
all contracts, agreements, leases or other instruments for the
operation of Aston business; and (ii) in general to do all things
and execute all documents necessary or appropriate to conduct the
business of Aston as described in the Aston LLC Agreement, or to
protect and preserve Aston’s assets. Highbury may
delegate any or all of the foregoing powers to one or more of the
Officers (including without limitation through delegation to the
Management Committee).
(b) Any
action taken by Highbury, and the signature of Highbury (or an
authorized representative thereof) on any agreement, contract,
instrument or other document on behalf of Aston, shall be
sufficient to bind Aston and shall conclusively evidence the
authority of Highbury and Aston with respect thereto.
(c) Any
Person dealing with Aston, Highbury or the Management Stockholders
may rely upon a certificate signed by Highbury as to (i) the
identity of Highbury or the Management Stockholders; (ii) any
factual matters relevant to the affairs of Aston; (iii) the Persons
who are authorized to execute and deliver any document on behalf of
Aston; or (iv) any action taken or omitted by Aston or
Highbury.
(d) Each
of the Management Stockholders acknowledges and agrees that (i)
neither he, she, nor any of his or her related Investors, is a
party to the Aston LLC Agreement and (ii) neither he, she, nor
any of his or her related Investors, has any rights under the Aston
LLC Agreement; provided, however, that Highbury agrees that it
shall not amend Sections 12 or 13 of the Aston LLC Agreement to
preclude the provision of indemnity to Covered Persons under
Article VII of this Agreement without the prior written consent of
the Management Stockholders, acting by Majority Vote.
Section 2.02. Management
Committee of Aston .
(a) Aston
shall have a Management Committee (the “ Management
Committee ”). Highbury hereby delegates to the
greatest extent permitted by applicable law the power and authority
under Section 2.05(a) of this Agreement to the Management Committee
to conduct the day-to-day operations, business and activities of
Aston.
(b) The
Management Committee shall be comprised as follows:
(i) The
Management Committee shall initially have three (3) members and
consist of Stuart Bilton, Kenneth Anderson, and Gerald Dillenburg.
The number of members of the Management Committee may be increased
or decreased by the Management Committee at any time with the
written consent of Highbury (but not decreased to a number less
than two (2) members). No Person who is not both an active employee
of Aston (or any of its Controlled Affiliates) and a holder of
Series B Preferred Stock and/or Common Stock that was issued to
such holder upon conversion of Series B Preferred Stock (an “
Eligible Person ”) may be, become or remain a member
of the Management Committee (subject to clause (v) below);
provided, that for the purposes of this Section 2.02, an employee
of Aston or its Controlled Affiliates shall be deemed to be the
holder of any shares of Series B Preferred Stock and/or Common
Stock issued upon conversion thereof which is held of record by (i)
a holding company owned solely by such employee and/or his or her
Permitted Transferees (as defined in the Investor Rights Agreement)
and (ii) any Permitted Transferee of such employee or his or her
holding company.
(ii) Any
vacancy in the Management Committee, however occurring (including a
vacancy resulting from an increase in the size of the Management
Committee), may be filled by any Eligible Person reasonably
acceptable to Highbury by written consent of the remaining members
of the Management Committee. In lieu of any such vacancy being
filled, the Management Committee may determine to reduce the size
of the Management Committee in accordance with clause (i) above
(but not to a number less than two (2) members); provided that if
at any time there is only one (1) member of the Management
Committee, at least one (1) of the vacancies on the Management
Committee must be filled and, if it remains unfilled for a period
of greater than five (5) days, shall be filled by any Eligible
Person(s) reasonably acceptable to Highbury.
(iii) Members
of the Management Committee shall remain members of the Management
Committee until their resignation, removal or death. Any member of
the Management Committee may resign by delivering his or her
written resignation to the Management Committee and
Highbury. At any time that there are more than two (2)
members of the Management Committee, any member of the Management
Committee may be removed from such position: (A) with or without
cause, by the Management Committee acting by a Committee Vote (with
such Committee Vote being calculated for all purposes as if the
member of the Management Committee whose removal is being
considered were not a member of the Management Committee) with the
written consent of Highbury, or (B) with or without cause, by the
holders of Series B Preferred Stock acting by a Majority Vote,
with the written consent of Highbury, or (C) For Cause by Highbury,
with notice to the Management Committee specifying the reasons for
the decision. Any Management Stockholder who is a member
of the Management Committee shall be deemed to have resigned from
the Management Committee and shall no longer be a member of the
Management Committee immediately upon such Management Stockholder
ceasing to be an Eligible Person.
(iv) At
any meeting of the Management Committee, presence in person or by
telephone (or other electronic means) of a majority of the members
of the Management Committee shall constitute a quorum. At any
meeting of the Management Committee at which a quorum is present, a
majority of the total members of the Management Committee may take
any action on behalf of the Management Committee (any such action
taken by such members of the Management Committee is sometimes
referred to herein as a “ Committee Vote ”). Any
action required or permitted to be taken at any meeting of the
Management Committee may be taken without a meeting of the
Management Committee only if (A) a written consent thereto is
signed by all the members of the Management Committee and (B)
Highbury has been given a copy of such written consent not less
than forty-eight (48) hours prior to such action. Notice of the
time, date and place of any meeting of the Management Committee
shall be given to all members of the Management Committee and
Highbury at least forty-eight (48) hours in advance of the meeting.
A representative of Highbury shall be entitled to attend each
meeting of the Management Committee. Notice need not be given to
any member of the Management Committee or Highbury if a waiver of
notice is given (orally or in writing) by such member of the
Management Committee or Highbury (as applicable), before, at or
after the meeting.
(v) Notwithstanding
any other provisions of this Agreement to the contrary, Highbury
shall have full power and authority at any time in its sole
discretion (and without the consent or approval of the Management
Committee or the Management Stockholders) to increase the number of
members of the Management Committee and to fill the vacancies
created by any such increase with one or more other Management
Stockholders or with any other persons selected by Highbury,
provided that any such increase may only be effected by written
notice from Highbury to the Management Committee, which written
notice must expressly reference this Section of this
Agreement.
Section 2.03. Officers of
Aston . The Management Committee may designate
employees of Aston as officers of Aston (the “
Officers ”) as it deems necessary or desirable to
carry on the business of Aston. The Management Committee
may delegate any of its power or authority to an Officer or
Officers subject to modification and withdrawal of such delegated
power and authority by the Management Committee. Any two or more
offices may be held by the same Person. New offices may be created
and filled by the Management Committee. Each Officer shall hold
office until his or her successor is designated by the Management
Committee or until his or her earlier death, resignation or
removal. Any Officer may resign at any time upon written
notice to the Management Committee and Highbury. Any
Officer designated by the Management Committee may be removed from
his or her office (with or without a concurrent termination of
employment) (i) with or without cause by the Management Committee
(excluding for all purposes the Person whose removal is being
considered) or (ii) For Cause by Highbury, in each case at any
time. A vacancy in any office occurring because of death,
resignation, removal or otherwise may be filled by the Management
Committee. Any designation of Officers, a description of any duties
delegated to such Officers, and any removal of such Officers by the
Management Committee, shall be approved by the Management Committee
in writing, which approval shall be delivered to
Highbury.
Section 2.04. Employees of Aston
.
(a) The
decision to employ, and the terms of employment of any employee of
Aston (or any Controlled Affiliates thereof) who is not a
Management Stockholder (including, without limitation, with respect
to the hiring, all aspects of compensation, promoting, demoting and
terminating of such employees), shall be determined by the
Management Committee or such Person or Persons to whom the
Management Committee may delegate such power and authority
(subject, in all instances, to the power of the Management
Committee to revoke such delegation in whole or in part (by a
Committee Vote that excludes any Person to whom such power and
authority has been delegated)), subject, in all cases, to
compliance with all applicable laws, rules and regulations and with
the provisions of Section 2.05 hereof. Notwithstanding the
foregoing, Highbury may terminate the employment by Aston (or any
Controlled Affiliate thereof) of any employee who has engaged in
any activity included in the definition of “ For Cause
” with notice to the Management Committee specifying the
reasons for such decision.
(b) Any
Person who is a Management Stockholder may have his or her
employment with Aston terminated by Aston only: (i) in the case of
a termination For Cause, either by Highbury or by the Management
Committee (excluding for all purposes the Person whose termination
is being considered) with the prior written consent of Highbury, or
(ii) in the case of any other termination by Aston, by the
Management Committee (excluding for all purposes the Person whose
termination is being considered) with the prior written consent of
Highbury.
Section 2.05. Operation of the Business
of Aston .
(a) Subject
to Highbury’s rights, duties and obligations set forth
elsewhere in this Agreement (including, without limitation, the
provisions of this Section 2.05), the Management Committee is
hereby delegates to the greatest extent permitted by applicable law
the power and authority from Highbury to manage the day-to-day
operations, business and activities of Aston; including, without
limitation, the power and authority, in the name of and on behalf
of Aston, to:
(i) determine
the use of the Operating Allocation as set forth in Section 2.05(b)
below;
(ii) execute
such documents and do such acts as are necessary to register (or
provide or qualify for exemptions from any such registrations) or
qualify Aston (or any Controlled Affiliates thereof) under
applicable federal and state securities laws;
(iii) enter
into contracts and other agreements with respect to the provision
of Investment Services and execute other instruments, documents or
reports on behalf of Aston (and any Controlled Affiliates thereof)
in connection therewith;
(iv) enter
into contracts, agreements and commitments with respect to the
operation of the business of Aston (and any Controlled Affiliates
thereof) as are consistent with the other provisions of this
Agreement; and
(v) act
for and on behalf of Aston (and any Controlled Affiliates thereof)
in all matters incidental to the foregoing and other day-to-day
matters.
(b) The
Operating Allocation for any period shall be used to provide for
and pay Aston’s (and any Controlled Affiliates’
thereof) business expenses, liabilities and other costs (including
without limitation (i) the payment of premiums during such period
with respect to any insurance coverages maintained (except to the
extent otherwise provided for in Section 2.05(d)), (ii) all capital
expenditures and capital contributions made by Aston (or any
Controlled Affiliate thereof) during such period, except to the
extent that Owners’ Allocation has been retained therefor as
an Owners’ Allocation Expenditure, (iii) the satisfaction of
any net worth, working capital or similar requirements imposed by
applicable laws and regulations in connection with the businesses
conducted and registrations held by Aston (or any Controlled
Affiliate thereof) or otherwise reasonably necessary in connection
with the conduct of the businesses of Aston (and any Controlled
Affiliates thereof), (iv) all payments to subadvisers, brokers and
other vendors, (v) compensation and benefits payable to employees
of Aston (including the Officers and the Management Stockholders),
and at the discretion of the Management Committee, establishing
reserves for such future payments, and (vi) any payroll,
withholding and other similar taxes related to the compensation and
benefits payable to employees of Aston), as determined by the
Management Committee, and all such business expenses, liabilities
and other costs of Aston (and any Controlled Affiliates thereof)
shall be paid out of the Operating Allocation. Without the prior
written consent of Highbury (which written consent makes specific
reference to this Section 2.05(b)), Aston shall not (nor shall any
Controlled Affiliate of Aston) incur (and the Management
Stockholders shall use their reasonable best efforts to prevent
Aston (or any Controlled Affiliate thereof) from incurring) any
expenses or take any action to incur other obligations which
expenses and obligations exceed the ability of Aston to pay or
provide for them out of the Operating Allocation on a current or
previously reserved basis. Except to the extent otherwise required
by applicable law, Aston (and any Controlled Affiliates thereof)
shall only make payments of compen
