November 30, 2006
November
30, 2006
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxx
Fax:
(000) 000-0000
Re:
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Side
Letter Agreement - Montag &
Xxxxxxxx
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Dear
Xx.
Xxxxx:
Reference
is made to that certain Asset Purchase Agreement (the “Purchase Agreement”),
dated as of April 20, 2006 (the “Effective Date”), made by and among Highbury
Financial Inc., a Delaware corporation, Aston Asset Management LLC, a Delaware
limited liability company (collectively, the “Purchaser”), ABN AMRO Asset
Management Holdings, Inc., a Delaware corporation , ABN AMRO Investment Fund
Services, Inc., a Delaware corporation , ABN AMRO Asset Management, Inc., an
Illinois corporation , Montag & Xxxxxxxx, Inc. (“Montag”), a Georgia
corporation , Tamro Capital Partners LLC, a Delaware limited liability company
,
Veredus Asset Management LLC, a Kentucky limited liability company , and River
Road Asset Management, LLC, a Delaware limited liability company. This letter
agreement supersedes and replaces in its entirety the letter agreement, dated
April 20, 2006, between Montag and the Purchaser, which shall be null and void
and of no further legal effect following the execution and delivery hereof.
Capitalized terms used but not otherwise defined herein shall have the meaning
ascribed to such term in the Purchase Agreement.
In
connection with Montag entering into the Purchase Agreement, Purchaser and
Montag hereby enter into this letter immediately after the effectiveness of
the
Purchase Agreement and hereby agree as follows:
1. Notwithstanding
Section 5.4 of the Purchase Agreement to the contrary, Section 5.4 shall not
restrict Montag from: (i) acting as sub-adviser to any multi-manager product
or
fund, or (ii) acting as the adviser or a sub-adviser to any Mutual Fund;
provided, however, that prior to the fifth anniversary of the Closing Date,
Montag may not (A) act as the sole adviser or sole sub-adviser to a mutual
fund
registered under the 1940 Act, other than the Target Funds, or (B) use or permit
the use of the Retained Name & Marks with respect to any Mutual Fund, other
than the Target Funds. Notwithstanding the foregoing, Montag may use the
Retained Name and Marks prior to the fifth anniversary of the Closing Date
in
connection with any collective investment fund that is not registered under
the
1940 Act that Montag sponsors (a “Montag CIV”), provided that Montag pays the
Purchaser ten (10) basis points per annum on the aggregate amount of the assets
invested in such Montag CIV by any investor who, together with such investor’s
Related Parties, initially invests less than $40 million in such Montag CIV.
Montag shall pay such ten (10) basis points solely with respect to the first
$40
million that the investor invests in such Montag CIV and shall pay such amount
until the earlier of the date on which the investor withdraws such assets from
the Montag CIV or the fifth anniversary of the Closing Date. For purposes of
this Paragraph 1, “Related Party” shall mean (1) with respect to any
partnership, corporation, company, limited liability company, trust or other
entity, any Affiliate of such entity, and (2) with respect to any natural
person, any member of such person’s family or any partnership, trust or other
entity, the beneficial interests in which are directly or indirectly owned
solely by members of such person’s family.
2. Notwithstanding
Section 5.4 of the Purchase Agreement, in the event that the Purchaser
terminates any Investment Subadvisory Contract between the Purchaser and Montag
before the fifth anniversary of the Closing Date without Cause, (i) Montag
shall
immediately have the right (a) to act as the sole adviser or sole sub-adviser
with respect to any mutual fund registered under the 1940 Act which is managed
in a similar style to that of the fund subject to such terminated Investment
Subadvisory Contract, and (b) to use the Retained Name & Marks with respect
to any product, fund or other investment vehicle for which it acts as sponsor,
adviser or sub-adviser and which is managed in a similar style to that of the
fund subject to such terminated Investment Subadvisory Contract, in each case
without prior compliance with the provisions of Section 5.4(a)(i)(B) of the
Purchase Agreement, and (ii) if such terminated Investment Subadvisory Contract
was with respect to the ABN AMRO / Montag & Xxxxxxxx Growth Fund, then
Montag’s obligation to pay the Purchaser ten (10) basis points with respect to
any Montag CIV shall immediately terminate. In the event that the Purchaser
terminates the Investment Subadvisory Contracts with respect to both the ABN
AMRO/Montag & Xxxxxxxx Balanced Fund and the ABN AMRO / Montag &
Xxxxxxxx Growth Fund, without Cause, before the fifth anniversary of the Closing
Date, all of the restrictions imposed on Montag’s activities under paragraph 1
of this letter shall terminate as of the date on which both such Investment
Subadvisory Contracts have been terminated, and Montag shall immediately have
the right (A) to act as the sole adviser or sole sub-adviser to any mutual
fund
registered under the 1940 Act, and (B) to use or permit the use of the Retained
Name & Marks with respect to any Mutual Fund. For purposes of this paragraph
2, the term “Cause” shall mean any (i) material breach by Montag of the
Investment Subadvisory Contract, (ii) any material regulatory compliance issue
arising from or relating to any action or inaction of Montag, or (iii) any
other
event or circumstance of similar import or impact.
3. Purchaser
agrees that, notwithstanding the provisions of Section 5.4(a)(iii) of the
Purchase Agreement, Montag shall be permitted to accept funds from clients
of
Target Funds for purposes of creating a separately managed account managed
in
the style of any Target Fund sub-advised by Montag, without regard to the amount
of total investment dollars that such client and his, her or its Affiliates
collectively provide Montag for investment in such account, provided that with
respect to any such investment made before the earlier of the fifth anniversary
of the Closing Date or the date upon which the Purchaser has terminated, without
cause, its Investment Subadvisory Contracts with Montag for both the ABN
AMRO/Montag & Xxxxxxxx Balanced Fund and the ABN AMRO / Montag &
Xxxxxxxx Growth Fund, (i) such investor provides Purchaser with a letter of
intent with respect to such investment, which letter of intent includes a
representation by such investor that Montag did not, directly or indirectly,
solicit such investment, and (ii) Montag shall pay the Purchaser ten (10) basis
points per annum solely with respect to the first $40 million in assets so
invested until the earlier of (x) the fifth anniversary of the date of such
initial investment or (y) the date on which such investor withdraws such assets
from management by Montag.
4. Purchaser
agrees that, notwithstanding the provisions of Section 2 of the Sub-Advisory
License Agreement, the license granted by Montag under Section 1 of the
Sub-Advisory License Agreement shall terminate with respect to each Licensed
Xxxx (as defined in the Sub-Advisory License Agreement) of Montag upon (i)
the
earlier of the close of business on the thirtieth (30th)
day
following (A) the date of termination of all of the Investment Advisory
Contracts with respect to the Target Funds for which such Licensed Xxxx (as
defined in the Sub-Advisory License Agreement) is used as of the date hereof
or
(B) the date of termination of the Investment Subadvisory Contract with Montag
with respect to all of the Target Funds for which such Licensed Xxxx (as defined
in the Sub-Advisory License Agreement) of Montag is used as of the date hereof,
or (ii) as subsequently agreed to in writing by Licensor. In the event that
Purchaser terminates its Investment Subadvisory Contract with Montag with
respect to one, but not both, of the ABN AMRO/Montag & Xxxxxxxx Balanced
Fund and the ABN AMRO/Montag & Xxxxxxxx Growth Fund, the Purchaser’s license
to use each Licensed Xxxx (as defined in the Sub-Advisory License Agreement)
of
Montag in connection with the fund with respect to which the Investment
Subadvisory Contract has been terminated shall terminate, solely with respect
to
such fund, upon the termination of the Investment Subadvisory Contract with
respect to such fund.
This
letter agreement shall constitute the binding and enforceable obligation of
Purchaser and Montag and is not superseded or replaced by the terms of the
Purchase Agreement or any other agreement entered into in connection with the
Purchase Agreement. The provisions in this letter agreement shall be effective
upon the Effective Date and if the Closing does not occur for any reason, or
the
Purchase Agreement is terminated in accordance with its terms, this letter
agreement shall also be automatically terminated contemporaneously therewith,
and shall be null and void and of no legal effect, such that neither party
shall
have any obligations hereunder. This letter agreement shall be binding upon
the
parties to this letter agreement and their successors and assigns; provided,
that this letter agreement shall automatically terminate in the event that
(i)
any other Seller or Affiliate of any other Seller becomes the successor to
Montag (other than a direct or indirect wholly owned subsidiary of Montag)
or
(ii) in the event of any assignment hereof to any other Seller or Affiliate
of
any other Seller.
This
letter agreement shall be governed by the laws of the State of New York, without
regard to its conflicts of law rules.
If
the
foregoing accurately reflects the agreement, please execute one copy of this
letter agreement and return it to us, whereupon this letter agreement shall
become a binding agreement between the parties.
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MONTAG
& XXXXXXXX, INC.
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By:
/s/ Xxxxxxx X.
Xxxxx
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Name:
Xxxxxxx X. Xxxxx
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Title:
Chief Executive Officer
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Acknowledged
and Accepted:
ASTON
ASSET MANAGEMENT LLC
Its:
Managing Member
By:
/s/
Xxxxxxx X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
President and Chief Executive Officer
By:
/s/
Xxxxxxx X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
President and Chief Executive Officer
Side
Letter - Montag / Non-Compete