Summary of HIGHBURY FINANCIAL INC

Item 1.01. Entry into a Material Definitive Agreement.

Exchange Agreement

On September 14, 2009, Highbury Financial Inc. (the "Company") entered into an Exchange Agreement (the "Exchange Agreement") with the holders (the "B Investors"), which includes Stuart D. Bilton and Kenneth C. Anderson who are directors of the Company, of the Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company (the "Series B Preferred Stock"). Pursuant to the Exchange Agreement, the B Investors agreed to exchange up to 36% of their shares of Series B Preferred Stock to the Company for up to 1,620,000 shares of common stock, par value $0.0001 per share, of the Company ("Common Stock").

The Company and the B Investors entered into the Exchange Agreement in order to prevent a single stockholder from acquiring ownership beneficially of more than 25% of the outstanding voting securities of the Company, which could thereby trigger a presumptive change of control under Section 2(a)(9) of the Investment Company Act of 1940, as amended, of Aston Asset Management LLC ("Aston"), the Company's wholly owned subsidiary and investment adviser to the Aston Funds. A change of control of Aston could automatically terminate the investment advisory agreement between Aston and the Aston Funds, even if there is no change in the personnel of Aston. The Aston Funds are the primary source of revenue for both the Company and Aston. If the investment advisory agreement between Aston and the Aston Funds is terminated due to a change of control, the business of Highbury and Aston could potentially be significantly damaged.

Pursuant to the Exchange Agreement, each time a person becomes a beneficial owner of 25% or more of the outstanding voting securities of the Company (a "25% Stockholder"), the Company simultaneously will issue to each B Investor its pro rata share of the "Exchange Shares." "Exchange Shares" means the number of shares of Common Stock that the Company must issue such that after such issuance the number of voting securities held by the 25% Stockholder that triggered the Exchange will be equal to one share less than 25% of the outstanding voting securities. In exchange for the Exchange Shares, each B Investor will assign to the Company such number of shares or fractional shares of Series B Preferred Stock (which shall not exceed 360 shares of Series B Preferred Stock in the aggregate) equal to the quotient of (x) the number of Exchange Shares issued to such B Investor and (y) the "Conversion Number." The "Conversion Number" is 4,500, subject to standard anti-dilution provisions. The number of shares of Common Stock to be received in exchange for each share of Series B Preferred Stock is the same as the number of shares of Common Stock into which the Series B Preferred Stock is presently convertible.

Each exchange contemplated by the Exchange Agreement will be effective upon, and occur contemporaneously with, a person becoming a 25% Stockholder of the Company. The maximum number of shares of Common Stock that the Company may be required to issue in exchange for Series B Preferred Stock pursuant to the Exchange Agreement is 1,620,000. An exchange may not occur after the earlier to occur of (i) the first anniversary of the date of the Exchange Agreement and
(ii) a transaction that would constitute a Change of Control (as defined in the Certificate of Designation of the Series B Preferred Stock) of Highbury. If an exchange does not occur on or before the first anniversary of the date of the Exchange Agreement, the Exchange Agreement will terminate.

The Exchange Agreement contains representations of each of the B Investors relating to, among other things, (a) proper corporate organization and similar corporate matters; (b) investment intent and accredited investor status; (c) the authorization, performance and enforceability of the Exchange Agreement and related transaction documents and (d) title to the shares of Series B Preferred Stock. The Exchange Agreement also contains representations of the Company relating to, among other things, (a) proper corporate organization and similar corporate matters; (b) capitalization of the Company; (c) the authorization, performance and enforceability of the Exchange Agreement and related transaction documents (d) valid issuance of the Exchange Shares, and (e) accuracy of reports of the Company filed with the Securities and Exchange Commission.

Pursuant to the Exchange Agreement, the Company agreed to indemnify each of the B Investors and the persons named as management stockholders therein who own interests in certain of the B Investors and are employees of Aston (the "Management Stockholders") from and against any claims challenging the authority of the Company to enter into, or otherwise seeking to invalidate, the transactions contemplated by the Exchange Agreement. The Company also agreed to pay any expenses of the B Investors and Management Stockholders relating to the negotiation and consummation of the Exchange Agreement and any filings required by such persons with the Securities and Exchange Commission as a result of the transactions contemplated by the Exchange Agreement.

The foregoing description of the Exchange Agreement is qualified in its entirety by the Exchange Agreement which is included as Exhibit 10.1 hereto and is incorporated herein by reference.

Amended and Restated Investor Rights Agreement

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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As described in Item 1.01 above, on September 14, 2009, in connection with the agreed waiver by the B Investors of their right to elect one director to the Company's board of directors that was included in the Amended and Restated Investor Rights Agreement, Kenneth C. Anderson resigned as a member of the Company's board of directors nominated by the holders of the Series B Preferred Stock. As permitted by the Company's By-Laws, the Company's board of directors elected Mr. Anderson as a director to fill the vacancy created by his resignation as a director nominated by the B Investors. Mr. Anderson will serve as a director in the class of directors whose term will expire on the date of the Company's annual meeting of stockholders to be held in 2011.

Mr. Anderson, as a Management Stockholder, is a party to the Amended and Restated Investor Rights Agreement described above and owns interests in one of the B Investors which is a party to the Exchange Agreement described above. The descriptions of the Exchange Agreement and Amended and Restated Investor Rights Agreement included in Item 1.01 above are incorporated herein by reference. Mr. Anderson was also a party to the Exchange Agreement, dated August 10, 2009 (the "First Exchange Agreement"), and the Investor Rights Agreement, each between the Company, the B Investors and the Management Stockholders which were described in, and filed as exhibits to, the Company's Form 8-K filed with the Securities and Exchange Commission on August 11, 2009 (the "August 11 Form 8-K"). The descriptions of the First Exchange Agreement and Investor Rights Agreement included in the August 11 Form 8-K are incorporated herein by reference.