Exhibit 10.4

 

EXCHANGE AGREEMENT

BY AND AMONG

 

DUFF & PHELPS ACQUISITIONS, LLC

LM DUFF HOLDINGS, LLC

LOVELL MINNICK EQUITY PARTNERS LP

VESTAR CAPITAL PARTNERS IV, L.P.

VESTAR/D&P HOLDINGS LLC

 

and

 

the MEMBERS, as defined herein

 

Dated as of October 3, 2007

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

ARTICLE I DEFINITIONS

 

1

Section 1.1

DEFINITIONS

 

1

Section 1.2

GENDER

 

5

ARTICLE II EXCHANGE

 

5

Section 2.1

EXCHANGE WITH ENTITIES

 

5

Section 2.2

EXPENSES

 

11

Section 2.3

NON-SOLICITATION

 

11

Section 2.4

ADJUSTMENT

 

12

Section 2.5

EXPIRATION

 

12

Section 2.6

MAINTENANCE REQUIREMENTS10

 

12

ARTICLE III MISCELLANEOUS

 

12

Section 3.1

NOTICES

 

12

Section 3.2

INTERPRETATION

 

13

Section 3.3

MEMBER

 

13

Section 3.4

SEVERABILITY

 

13

Section 3.5

COUNTERPARTS

 

13

Section 3.6

ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES

 

14

Section 3.7

FURTHER ASSURANCES

 

14

Section 3.8

GOVERNING LAW; EQUITABLE REMEDIES

 

14

Section 3.9

CONSENT TO JURISDICTION

 

14

Section 3.10

AMENDMENTS; WAIVERS.

 

15

Section 3.11

ASSIGNMENT

 

15

Section 3.12

TAX TREATMENT

 

15

 

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EXCHANGE AGREEMENT (the “Agreement”), dated as of October 3, 2007, by and among
Duff & Phelps Acquisitions LLC, a Delaware limited liability company (“DPA”), LM
Duff Holdings, LLC, Lovell Minnick Equity Partners LP, Vestar Capital Partners
IV, L.P., Vestar/D&P Holdings LLC and certain other Members (as defined herein).

 

WHEREAS, in connection with the closing of the IPO (as defined herein), Duff &
Phelps Corporation, a Delaware corporation (“the Corporation”), intends to
consummate the transactions described in the Registration Statement on Form S-1
filed with the Commission (as defined herein) on May 23, 2007 (Registration No.
333-143205) (as amended and supplemented from time to time, the “IPO
Registration Statement”);

 

WHEREAS, each Member owns one or more New Class A Units (as defined herein) and
Class B Shares (as defined herein);

 

WHEREAS, the parties hereto desire to provide for the possible future exchange
of New Class A Units for Class A Shares, on the terms and subject to the
conditions set forth herein;

 

WHEREAS, DPA shall have no obligation to acquire from any Member any New Class A
Units issued by DPA unless such Member exercises its Exchange Right (as defined
herein) with respect to such New Class A Units and delivers for cancellation a
number of Class B Shares equal to such number of New Class A Units; and

 

WHEREAS, the parties intend that an Exchange (as defined herein) consummated
hereunder be treated for Federal income tax purposes, to the extent possible, as
a taxable sale of New Class A Units by the exchanging Member to the Corporation;

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1                                      DEFINITIONS.  As used in this
Agreement, the following terms shall have the following meanings:

 

An “AFFILIATE” of any Person means any other Person that directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such first Person. “CONTROL” means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.

 

“AGGREGATE VALUE” means a value equal to the product of (a) the number of
applicable New Class A Units multiplied by (b) the closing sales price of the
Class A Shares on the stock exchange where the Class A Shares then trade at the
close of business on the Business Day immediately preceding the date of delivery
of the related Exchange Request.

 

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“AGREEMENT” has the meaning set forth in the preamble to this Agreement.

 

“BUSINESS DAY” means Monday through Friday of each week, except that a legal
holiday recognized as such by the government of the United States of America or
the State of New York shall not be regarded as a Business Day.

 

“CLASS A SHARES” means shares of Class A common stock, par value $0.01 per share
of the Corporation.

 

“CLASS B SHARES” means shares of Class B common stock, par value $0.0001 per
share of the Corporation.

 

“CLOSING” and “CLOSING DATE” have the meanings set forth in Section 2.1(b).

 

“COMMISSION” means the United States Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.

 

“CORPORATION” has the meaning set forth in the recitals of this Agreement.

 

“DPA” has the meaning set forth in the preamble to this Agreement.

 

“EXCHANGE” means the exchange by a Member of one or more New Class A Units for
Class A Shares as described in Sections 2.1(a) and (b) of this Agreement.

 

“EXCHANGE RIGHT” means the right of a Member to exchange one or more New Class A
Units for Class A Shares pursuant to Sections 2.1(a) and (b) of this Agreement
along with the delivery of the corresponding number of Class B Shares for
cancellation.

 

“EXCHANGE REQUEST” means an irrevocable written notice to DPA, delivered at
least 45 days in advance of any Exchange, setting forth the number of New Class
A Units to be Exchanged for Class A Shares and the number of Class B Shares to
be delivered to the Corporation for cancellation, as described in Section 2.1(a)
of this Agreement.

 

“EXECUTIVE MEMBER” means an “officer” of DPA or its Subsidiaries, within the
meaning of Section 16 of the Securities and Exchange Act of 1934, as amended
(other than the corporate controller of DPA), immediately following the IPO, who
is a beneficial owner of one or more New Class A Units and Class B Shares.

 

“FIRST ANNIVERSARY” means the one-year anniversary of the date of pricing of the
IPO.

 

“FISCAL QUARTER” means each fiscal quarter, ending on the last day of each of
March, June, September and December of any Fiscal Year.

 

“FISCAL YEAR” means the fiscal year, ending on December 31 of each calendar
year.

 

“FOURTH ANNIVERSARY” means the four-year anniversary of the date of pricing of
the IPO.

 

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“GOVERNMENTAL ENTITY” means any court, administrative agency, regulatory body,
commission or other governmental authority, board, bureau or instrumentality,
domestic or foreign, and any subdivision thereof.

 

“IPO” means the initial public offering of Class A Shares.

 

“IPO REGISTRATION STATEMENT” has the meaning set forth in the recitals of this
Agreement.

 

“LIENS” means any and all liens, charges, security interests, options, claims,
mortgages, pledges, proxies, voting trusts or agreements, obligations,
understandings or arrangements or other restrictions on title or transfer of any
nature whatsoever.

 

“LLC AGREEMENT” means the Third Amended and Restated Limited Liability Company
Agreement, as amended, of DPA.

 

“LOVELL MEMBER” means, collectively, LM Duff Holdings, LLC, Lovell Minnick
Equity Partners LP and their respective Permitted Transferees.

 

“MEMBER” means each Person who, as of the effective date of the LLC Agreement,
is a member of DPA or thereafter is admitted as a member of DPA in accordance
with the terms of the LLC Agreement.

 

“NEW CLASS A UNITS” means the New Class A Units of DPA.

 

“NON-EMPLOYEE MEMBER” means a Member who is not an employee as of the date
hereof of DPA or any of its Subsidiaries (other than a Lovell Member or a Vestar
Member).

 

“NON-EXECUTIVE MEMBER” means an employee (other than an Executive Member) of DPA
and its Subsidiaries on or after the date hereof, who is a beneficial owner of
New Class A Units and Class B Shares.

 

“PERMITTED TRANSFEREE” shall mean with respect to each Member (a) such Member’s
spouse, (b) a lineal descendant of such Member’s maternal or paternal
grandparents (or any such descendant’s spouse), (c) a Charitable Institution (as
defined below), (d) a trustee of a trust (whether inter vivos or testamentary),
all of the current beneficiaries and presumptive remaindermen of which are one
or more of such Member and Persons described in clauses (a) through (c) of this
definition, (e) an entity that, for U.S. federal income tax purposes, is
disregarded as separate from its owner, of which all of the outstanding equity
interests therein are owned by such Member or a Person described in clauses (a)
through (d) of this definition, (f) an individual mandated under a qualified
domestic relations order, (g) a legal or personal representative of such Member
in the event of his death or Disability (as defined below), (h) a liquidating
trust, as defined in Treasury Regulations section 1.7701-4(d), or other entity
with comparable characteristics, (i) any other Member who is then employed by
DPA or any of its Affiliates and (j) any other transferee permitted pursuant to
Section 3.3; provided, however, that any such Person described in clauses (a)
through (j) shall be required to sign a joinder to this Agreement, in form and
substance reasonably satisfactory to DPA as set forth in Section 3.3 of

 

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this Agreement; provided further that the covenants of Section 2.3 of this
Agreement shall continue to be applicable to the Member who, on the date hereof,
originally held the New Class A Units and/or Class B Shares being transferred in
such transfer. For purpose of this definition: (i) “lineal descendants” shall
not include individuals adopted after attaining the age of eighteen (18) years
and such adopted Person’s descendants; (ii) “Charitable Institution” shall refer
to an organization described in section 501(c)(3) of the Internal Revenue Code
of 1986, as amended (or any corresponding provision of a future United State
Internal Revenue law) which is exempt from income taxation under section 501(a)
thereof; (iii) “presumptive remaindermen” shall refer to those Persons entitled
to a share of a trust’s assets if it were then to terminate; and (iv)
“Disability” shall refer to any physical or mental incapacity which prevents
such Member from carrying out all or substantially all of his duties under his
employment agreement with DPA or any of its Affiliates in such capacity for any
period of one hundred twenty (120) consecutive days or any aggregate period of
six (6) months in any 12-month period, as determined, in its sole discretion, by
the Managing Member of DPA.

 

“PERSON” means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization,
Governmental Entity or other entity.

 

“PROCEEDING” has the meaning set forth in Section 3.9.

 

“REGISTRATION RIGHTS AGREEMENT” means that certain Registration Rights
Agreement, dated as of October 3, 2007, among the Corporation and the other
parties named therein.

 

“REMAINING UNITS” means, with respect to each Member, all New Class A Units held
by such Member immediately following the IPO, taking into account all such New
Class A Units redeemed by DPA pursuant to the Reorganization Agreement (as
defined herein) in connection with the IPO (including New Class A Units that may
be exchanged by such Member if the underwriters exercise their over-allotment
option in the IPO).

 

“REORGANIZATION AGREEMENT” means that certain Reorganization Agreement, dated as
of April 9, 2007, among DPA and the other parties named therein.

 

“SECOND ANNIVERSARY” means the two-year anniversary of the date of pricing of
the IPO.

 

“SELECTED COURTS” has the meaning set forth in Section 3.9.

 

“SUBSIDIARIES” means, with respect to any Person, as of any date of
determination, any other Person as to which such Person, owns, directly or
indirectly, or otherwise controls more than 50% of the voting shares or other
similar interests or the sole general partner interest or managing member or
similar interest of such Person.

 

“THIRD ANNIVERSARY” means the three-year anniversary of the date of pricing of
the IPO.

 

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“VESTAR MEMBER” means, collectively, Vestar Capital Partners IV, L.P.,
Vestar/D&P Holdings LLC and their respective Permitted Transferees.

 

Section 1.2                                      GENDER. For the purposes of
this Agreement, the words “it”, “he,” “his” or “himself” shall be interpreted to
include the masculine, feminine and corporate, other entity or trust form.

 

ARTICLE II

EXCHANGE

 

Section 2.1                                      EXCHANGE WITH ENTITIES

 

(a)                                  Permissible Exchanges.

 

(i)             From and after the First Anniversary, a Non-Executive Member may
elect to Exchange up to thirty three and one-third percent (331/3%) of its
vested Remaining Units by delivering, at least 45 days in advance of the Closing
of such Exchange, a written notice to DPA (an “Exchange Request”). From and
after the Second Anniversary, a Non-Executive Member may elect to Exchange up
to, but not exceeding, sixty-six and two-third percent (662/3%) of its vested
Remaining Units (less its vested Remaining Units that were Exchanged after the
First Anniversary and before the Second Anniversary) by delivering and Exchange
Request at least 45 days in advance of the Closing of such Exchange. Subject to
the limitations as set forth below, one hundred percent (100%) of any such
Non-Executive Member’s vested Remaining Units may be Exchanged at the election
of such Non-Executive Member following the Third Anniversary by delivering an
Exchange Request at least 45 days in advance of the Closing of any such
Exchange. Each Exchange Request shall be delivered at least 45 days in advance
of the Closing of the relevant Exchange and shall set forth the number of New
Class A Units such Non-Executive Member wishes to Exchange for Class A Shares at
the Closing and the number of Class B Shares to be delivered for cancellation at
the Closing, subject to the limitations specified in this Section 2.1(a).
Notwithstanding the foregoing, each Non-Executive Member shall be required to
continue to beneficially own, for so long as such Non-Executive Member remains
employed by DPA, such number of New Class A Units, Class A Shares, or a
combination thereof, equal to at least twenty percent (20%) of its Remaining
Units. Any Exchange Requests submitted in violation of such maintenance
requirement will be summarily disregarded, and DPA shall have no obligation to
effectuate a Closing of any such Exchange relating to the entire amount of
Remaining Units included on such Exchange Request. Subject to the exceptions set
forth in Section 2.1(a)(iv), Exchange Requests may not be revoked after delivery
to DPA.

 

(ii)          From and after the First Anniversary, an Executive Member may
elect to Exchange up to twenty percent (20%) of its vested Remaining Units by
delivering an Exchange Request to DPA. From and after the

 

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Second Anniversary, an Executive Member may elect to Exchange up to, but not
exceeding, forty percent (40%) of its vested Remaining Units (less its vested
Remaining Units that were Exchanged after the First Anniversary and before the
Second Anniversary) by delivering an Exchange Request at least 45 days in
advance of the Closing of such Exchange. From and after the Third Anniversary,
an Executive Member may elect to Exchange up to, but not exceeding sixty percent
(60%) of its vested Remaining Units (less its vested Remaining Units that were
Exchanged before the Third Anniversary) by delivering an Exchange Request at
least 45 days in advance of the Closing of such Exchange. Subject to the
limitations as set forth below, one hundred percent (100%) of any such Executive
Member’s vested Remaining Units may be Exchanged at the election of such
Executive Member from the Fourth Anniversary by delivering an Exchange Request
at least 45 days in advance of the Closing of such Exchange. Each Exchange
Request shall be delivered at least 45 days in advance of such Exchange and
shall set forth the number of New Class A Units such Executive Member wishes to
Exchange for Class A Shares at the Closing and the number of Class B Shares to
be delivered for cancellation at the Closing, subject to the limitations
specified in this Section 2.1(a). Notwithstanding the foregoing, each Executive
Member shall be required to continue to beneficially own, for so long as such
Executive Member remains employed by DPA, such number of New Class A Units,
Class A Shares, or a combination thereof, equal to at least twenty-five  percent
(25%) of its Remaining Units. Any Exchange Requests submitted in violation of
such maintenance requirement will be summarily disregarded, and DPA shall have
no obligation to effectuate a Closing of any such Exchange relating to the
entire amount of Remaining Units included on such Exchange Request. Subject to
the exceptions set forth in Section 2.1(a)(iv), Exchange Requests may not be
revoked after delivery to DPA.

 

(iii)       Notwithstanding the foregoing, no Non-Executive Member or Executive
Member may make any Exchange prior to the occurrence of the earlier of (a) the
completion of two underwritten registered public offerings of the Class A Shares
other than the IPO and (b) the Second Anniversary, except (i) Exchanges of New
Class A Units in connection with the IPO and (ii) Exchanges of New Class A Units
to be sold pursuant to such registered public offerings in accordance with
Sections 2.1(a)(i) and (ii) above.

 

(iv)      Upon delivery of one or more Exchange Requests, the Vestar Members,
Lovell Members and Non-Employee Members may elect to Exchange up to one hundred
percent (100%) of their respective Remaining Units for Class A Shares following
the Initial Lockup Period (as defined herein) by delivering an Exchange Request
at least 45 days in advance of the Closing of such Exchange. Each Exchange
Request shall be delivered at least 45 days in advance of the Closing of such
Exchange and shall set forth the number of New Class A Units such Vestar Member,
Lovell Member or Non-Employee Member, as the case may be, wishes to Exchange for
Class A Shares at the Closing and the number of Class B Shares to be delivered
for cancellation at the Closing. In the

 

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event that any Exchange Request is made in connection with a contemplated
underwritten offering of Class A Shares and such underwritten offering includes
any option being granted to the underwriters or any other person to acquire an
additional number of Class A Shares in connection with such offering, then (i)
each Exchange Request related to Class A Units to be exchanged for Class A
Shares that will be included in such underwritten offering shall also specify
the maximum number of additional Class A Units that the holder desires to have
exchanged only in the event that such option is exercised (it being understood
that (x) the party exercising such option may have the right to do so in part,
in which case the additional Class A Units exchanged in connection with such
offering will be limited to the amount necessary to fulfill the delivery
obligation with respect to the Class A Shares that are actually to be acquired
upon exercise of such option, and (y) the allocation of Class A Shares to be
acquired pursuant to an exercise of any such option among the persons
participating in such offering may not be known at the time of the delivery of
the original Exchange Request, in which case the maximum number of additional
Class A Units to potentially be exchanged will be communicated to the Company
pursuant to a supplemental Exchange Request delivered promptly following the
time at which such determination is made) and (ii) the Closing of the exchange
of any additional Class A Units to fulfill a unitholder’s delivery obligation
with respect to the Class A Shares that are to be acquired upon exercise of any
such option will occur immediately prior to the time that delivery of the Class
A Shares is to be made.. Upon delivery to DPA, no Exchange Request may be
revoked; provided, first, that, notwithstanding any other provision to the
contrary contained herein, any Member that has delivered an Exchange Request
pursuant to Section 2.1(a) shall be entitled either (x) to revoke such Exchange
Request at any time prior to the Closing of the applicable Exchange or (y) to
delay the Closing of the requested Exchange pursuant to this Section 2.1(a)(iv),
in each case, after the occurrence of one or more of the following events: (A)
the registration statement pursuant to which the Class A Shares were to be
registered by such Member at or immediately following the Closing shall have
ceased to be effective pursuant to any action or inaction by the Commission; (B)
the Corporation shall have failed to cause any related prospectus to be
supplemented by any required prospectus supplement; (C) the Corporation shall
have imposed restrictions on the ability of such Member to effect a registration
of Class A Shares at or immediately following the Closing; (D) the Corporation
shall have exercised its right to defer, delay or suspend the filing or
effectiveness of a registration statement (whether pursuant to Section 2.1(d) or
2.2(d) of the Registration Rights Agreement or otherwise), and such deferral,
delay or suspension shall affect the ability of such Member to register its
Class A Shares at or immediately following the Closing; (E) the Corporation, any
of its Affiliates or any third party shall have disclosed to such Member any
material non-public information, the receipt of which results in such Member
being prohibited from registering Class A Shares at or immediately following the
Closing; (F) any stop order shall have been issued by the Commission; (G) the
Closing, or the closing of the registered offering or the effectiveness of any
registration shall have been delayed due to any facts, circumstances or Persons,

 

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which facts, circumstances or persons, as applicable, were not controlled or
influenced by the Members seeking to delay such Closing or revoke such Exchange
Request in order to provide such Member with a basis for such delay or
revocation outside the control or influence, direct or indirect, of such Member;
(H) there shall have occurred a material disruption in the securities markets
generally or in the market or markets in which the Class A Shares are then
traded; (I) there shall be in effect an injunction, a restraining order or a
decree of any nature of any Governmental Entity that restrains or prohibits the
Exchange of New Class A Units for Class A Shares, the transfer of Class B Shares
for cancellation or the registration or sale of any Class A Shares pursuant to a
registration statement; and (J) the Corporation shall have failed to comply in
all material respects with its obligations under the Registration Rights
Agreement, and such failure shall have affected the ability of such Member to
consummate the registration or sale of Class A Shares in a manner not expressly
contemplated in clauses (A) through (I) above; provided; second, that in no
event shall the Member who is seeking to delay such Closing or revoke such
Exchange Request and relying on any of the matters contemplated in clauses (A)
through (J) above have controlled or influenced any facts, circumstances or
Persons in connection therewith and in order to provide such Member with a basis
for such delay or revocation or been caused or influenced, either directly or
indirectly, by such Member; provided, third, that if any Member that has
delivered an Exchange Request pursuant to Section 2.1(a) revokes such Exchange
Request for any reason other than set forth in the first proviso to this Section
2(a)(iv) or is found to have engaged in conduct described in the second proviso
to this Section 2.1(a)(iv), then such Member shall not be entitled to
participate in any Exchange for a period of two Fiscal Quarters following the
date of such revocation.

 

(v)         To the extent a Member holds vested and unvested New Class A Units,
all such Member’s vested New Class A Units must be Exchanged before any unvested
New Class A Units may be Exchanged by such Member. The Member shall represent in
the Exchange Request that such Member owns New Class A Units and Class B Shares
to be delivered at the applicable Closing pursuant to Section 2.1(d)(i), free
and clear of all Liens, except as set forth therein, and, if there are any Liens
identified in the Exchange Request, such Member shall covenant that such Member
will deliver at the applicable Closing evidence reasonably satisfactory to DPA,
that all such Liens have been released. The Closing of any Exchange initiated
pursuant to this Section 2.1(a) shall occur on the applicable Closing Date.
During the 180-day period following the IPO and as extended below (the “Initial
Lock-Up Period”), the provisions of this Section 2.1(a) may be modified only
with the prior written approval of each of Goldman, Sachs & Co. and UBS
Securities LLC; provided, however, that if (1) during the last 17 days of the
Initial Lock-Up Period, the Corporation releases earnings results or announces
material news or a material event or (2) prior to the expiration of the Initial
Lock-Up Period, the Corporation announces that it will release earnings results
during the 15-day period following the last day of the Initial Lock-Up Period,
then in each case the Initial Lock-Up Period will be

 

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automatically extended until the expiration of the 18-day period beginning on
the date of release of the earnings results or the announcement of the material
news or material event, as applicable, unless Goldman, Sachs & Co. and UBS
Securities LLC waive, in writing, such extension; the Corporation will provide
Goldman, Sachs & Co. and UBS Securities LLC and each Member subject to the
Initial Lock-Up Period with prior notice of any such announcement that gives
rise to an extension of the Initial Lock-up Period and each Member agrees that
any such notice properly delivered will be deemed to have been given to, and
received by, such Member. Each Member further agrees that, prior to engaging in
any transaction or taking any other action that is subject to the terms of this
Section 2(a)(v) during the period from the date of this Agreement to and
including the 34th day following the expiration of the Initial Lock-Up Period,
such Member will give notice thereof to the Corporation and will not consummate
such transaction or take any such action unless it has received written
confirmation from the Corporation that the Initial Lock-Up Period has expired.
During the Initial Lock-Up Period, none of the Corporation, DPA, its
subsidiaries or any Member shall, without the prior written consent of Goldman,
Sachs & Co. and UBS Securities LLC, offer, sell, contract to sell, pledge, grant
any option to purchase, make any short sale or otherwise dispose of any shares
of Class A Shares of the Corporation, or any options or warrants to purchase any
shares of Class A Shares of the Corporation, or any securities convertible into,
exchangeable for or that represent the right (whether exercisable against the
Corporation or against DPA) to receive shares of Class A Shares of the
Corporation, including any membership interests in DPA, or any such
substantially similar securities, whether now owned or hereinafter acquired,
owned directly by such Member (including holding as a custodian) or with respect
to which such Member has beneficial ownership within the rules and regulations
of the Commission; provided, however, that, for the purposes of Section
2(a)(iv), the Corporation may issue securities pursuant to any employee benefit
plan existing on the date of the prospectus for the IPO which may (by their
express provisions or pursuant to any exchange offer) be or become exercisable,
convertible or exchangeable for Class A Shares. The foregoing restriction is
expressly agreed to preclude such Member from engaging in any hedging or other
transaction which is designed to or which reasonably could be expected to lead
to or result in a sale or disposition of such Member’s Class A Shares even if
such Class A Shares would be disposed of by someone other than such Member. Such
prohibited hedging or other transactions would include without limitation any
short sale or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any of such Member’s Class A
Shares or with respect to any security that includes, relates to, or derives any
significant part of its value from such Member’s Class A Shares.

 

Notwithstanding any other provision herein to the contrary, the provisions of
Section 2.1(a)(i) – (iv) may be modified only with the prior written approval of
the independent directors of the Corporation. The provisions of Section
2.1(a)(v) may be modified only with the prior written approval of Goldman, Sachs
& Co., UBS Securities LLC and the independent directors of the Corporation.

 

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(b)                                 Closing.

 

(i)             If an Exchange Request has been timely delivered pursuant to
Section 2.1(a), then, on the later to occur of (x) the fifth Business Day prior
to the last Business Day of the Fiscal Quarter during which such Exchange
Request has been delivered and (y) the fifth Business Day following the date on
which the conditions giving rise to any delay pursuant to Section 2(a)(iv) cease
to exist ( the “Closing Date”), the parties shall effect the closing (the
“Closing”) of the transactions contemplated by Section 2.1 at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York,
10036, or at such other time, at such other place, and in such other manner, as
the applicable parties to such Exchange shall agree in writing; provided,
however, that if pursuant to this Section 2.1(b)(i) an applicable Closing Date
falls on a day during which officers and directors of the Corporation or any of
their Affiliates are prohibited by the trading policies of the Corporation from
disposing of equity securities of the Corporation, then with respect to such
Exchanges by such officers and directors, the Closing Date shall instead be
deemed to be the first Business Day after such date that such officers and
directors of the Corporation are allowed to dispose of equity securities of the
Corporation pursuant to the trading policies of the Corporation.

 

(ii)          No Exchange shall be permitted (and, if attempted, shall be void
ab initio) if, in the good faith determination of DPA, such an Exchange would
pose a material risk that DPA would be a “publicly traded partnership” as
defined in Section 7704 of the Code.

 

(iii)       DPA is not required to effect a Closing relating to the delivery of
an Exchange Request unless the aggregate number of exchanged New Class A Units
of each Member who elects to participate in such Closing by delivering an
Exchange Request have an Aggregate Value of at least $50,000, or such lesser
amount as constitutes such Member’s entire holdings of New Class A Units at such
time.

 

(c)                                  Closing Conditions. The obligations of any
of the parties to consummate an Exchange pursuant to this Section 2.1 shall be
subject to the conditions that:

 

(i)             there shall be no injunction, restraining order or decree of any
nature of any Governmental Entity that is then in effect that restrains or
prohibits the Exchange of New Class A Units for Class A Shares or the transfer
of Class B Shares for cancellation; and

 

(ii)          in the case of a Non-Executive Member or an Executive Member, such
Member satisfies the maintenance requirements set forth in Sections 2.1(a)(i) or
(ii), as applicable.

 

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(d)                                 Closing Deliveries. At each Closing, with
respect to each Member that requests the Exchange, or elects to participate in
the Exchange, in each case, contemplated for such Closing:

 

(i)             such Member shall deliver instruments of transfer, in form
reasonably satisfactory to the designated transfer agent (the “Transfer Agent”),
duly executed by such Member or such Member’s duly authorized attorney, and
transfer tax stamps or funds therefor, if required, representing a number of New
Class A Units to be exchanged for Class A Shares, together with stock powers
duly endorsed in blank;

 

(ii)          such Member shall deliver for cancellation instruments of
transfer, in form reasonably satisfactory to the Transfer Agent, duly executed
by such Member or such Member’s duly authorized attorney, and transfer tax
stamps or funds therefor, if required, representing a number of Class B Shares
equal to the number of such Member’s exchanged New Class A Units, together with
stock powers duly endorsed in blank;

 

(iii)       if applicable, such Member shall deliver evidence reasonably
satisfactory to DPA, that all Liens on his New Class A Units and Class B Shares
delivered pursuant to Section 2.1(d)(i) have been released;

 

(iv)      if such Member transfers a number of New Class A Units and Class B
Shares pursuant to this Section 2.1(d) that represent a greater number of New
Class A Units and Class B Shares than to be exchanged in such Exchange, DPA will
deliver back instruments of transfer representing the remainder of New Class A
Units and Class B Shares, as applicable.

 

(v)         the Corporation shall deliver to DPA a certificate representing an
amount of Class A Shares equal to the number of New Class A Units.

 

Section 2.2                                      EXPENSES

 

Each party hereto shall bear his own expenses in connection with the
consummation of any of the transactions contemplated hereby, whether or not any
such transaction is ultimately consummated.

 

Section 2.3                                      NON-SOLICITATION

 

Each Member who is an employee of DPA or any of its Subsidiaries hereby
covenants and agrees that during the period he is an employee of DPA or any of
its Subsidiaries and for a period of one (1) year thereafter, such Member shall
not, directly or indirectly, solicit, induce, attempt to induce or encourage or
assist (i) any then-current employees of DPA or any of its Affiliates to
terminate their employment with DPA or such Affiliate or to become employed by
any other firm, company or other business enterprise; or (ii) any existing
customer or client of DPA or any of its Affiliates to cease doing business with
or modify its relation with DPA or any of its Affiliates to the economic
detriment of DPA or any

 

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of its Affiliates or to become a customer or client of any other firm, company
or business enterprise. Notwithstanding the foregoing, any Member who is party
to any non-solicitation provisions contained in an employee letter, unit grant
agreement, employment agreement, offer letter, or any other agreement with DPA
or any of its Subsidiaries dated prior to the execution of this Agreement, shall
be bound by the applicable non-solicitation provisions of such employee letter,
unit grant agreement, employment agreement, offer letter or any other agreement
with DPA or any of its Subsidiaries relating to such non-solicitation
provisions, and this Section 2.3 shall not apply to such Member.

 

Section 2.4                                      ADJUSTMENT      The Exchange
Rights for New Class A Units shall be adjusted accordingly if there is: (A) any
subdivision (by any unit split, unit distribution, reclassification,
recapitalization or otherwise) or combination (by reverse unit split,
reclassification, recapitalization or otherwise) of the New Class A Units that
is not accompanied by an identical subdivision or combination of the Class A
Shares; or (B) any subdivision (by any stock split, stock dividend,
reclassification, recapitalization or otherwise) or combination (by reverse
stock split, reclassification, recapitalization or otherwise) of the Class A
Shares that is not accompanied by an identical subdivision of the New Class A
Units.

 

Section 2.5                                      EXPIRATION

 

In the event that DPA is dissolved pursuant to Section 7.2 of the LLC Agreement,
any Exchange Right pursuant to Sections 2.1(a) and (b) of this Agreement shall
expire upon final distribution of the assets of DPA pursuant to the terms and
conditions of the LLC Agreement.

 

Section 2.6                                      MAINTENANCE REQUIREMENTS

 

Each Member who is a Non-Executive Member or an Executive Member covenants and
agrees that during the period he is an employee of DPA or any of its
Subsidiaries, such Member will satisfy the maintenance requirements set forth in
Sections 2.1(a)(i) or (ii), as applicable.

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1                                      NOTICES.  All notices,
requests, consents and other communications hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in person
or sent by facsimile (provided a copy is thereafter promptly delivered as
provided in this Section 3.1) or nationally recognized overnight courier,
addressed to such party at the address or facsimile number set forth below or
such other address or facsimile number as may hereafter be designated in writing
by such party to the other parties:

 

(a)                                  If to DPA, to its Managing Member:

 

Duff & Phelps Corporation
55 East 52nd Street
New York, NY 10055
Attention: General Counsel

 

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Facsimile: (212) 450-2801

with a copy (which shall not constitute notice to DPA) to:

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Attention: David J. Goldschmidt, Esq.

 

(b)                                 if to any of the Members, to:

 

the address and facsimile number set forth in the records of DPA from time to
time.

 

Section 3.2                                      INTERPRETATION.  The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
“included”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.”

 

Section 3.3                                      MEMBER.  To the extent a Member
(or an applicable Permitted Transferee) validly transfers any or all of his New
Class A Units and Class B Shares to a Permitted Transferee of such Member or to
any other Person in a transaction not in contravention of, and in accordance
with, the LLC Agreement, then such Person shall have the right to execute and
deliver a joinder to this Agreement, in form and substance reasonably
satisfactory to DPA. Upon execution of any such joinder, such Person shall be
entitled to all of the rights and bound by each of the obligations applicable to
the relevant transferor hereunder.

 

Section 3.4                                      SEVERABILITY.  The provisions
of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any person or entity or any
circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

 

Section 3.5                                      COUNTERPARTS.  This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original and all of which shall, taken together, be considered one and the same
agreement, it being understood that both parties need not sign the same
counterpart.

 

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Section 3.6                                      ENTIRE AGREEMENT; NO THIRD
PARTY BENEFICIARIES.

This Agreement (a) constitutes the entire agreement and supersedes all other
prior agreements, both written and oral, among the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any Person, other
than the parties hereto and their Permitted Transferees, any rights or remedies
hereunder; provided, that, Goldman, Sachs & Co., UBS Securities LLC, Lehman
Brothers Inc., William Blair & Company, L.L.C., Keefe, Bruyette & Woods, Inc.
and Fox-Pitt, Kelton Cochran Caronia Waller (USA) LLC shall be deemed third
party beneficiaries with respect to Section 2.1(a)(v) of this Agreement.

 

Section 3.7                                      FURTHER ASSURANCES.  Each party
hereto shall execute, deliver, acknowledge and file such other documents and
take such further actions as may be reasonably requested from time to time by
any other party hereto to give effect to and carry out the transactions
contemplated herein.

 

Section 3.8                                      GOVERNING LAW; EQUITABLE
REMEDIES. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK). The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or this Agreement were otherwise
breached. It is accordingly agreed that the parties hereto shall be entitled to
an injunction or injunctions and other equitable remedies to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any of the Selected Courts (as defined below), this being in addition to any
other remedy to which they are entitled at law or in equity. Any requirements
for the securing or posting of any bond with respect to such remedy are hereby
waived by each of the parties hereto. Each party further agrees that, in the
event of any action for an injunction or other equitable remedy in respect of
such breach or enforcement of specific performance, it will not assert the
defense that a remedy at law would be adequate.

 

Section 3.9                                      CONSENT TO JURISDICTION.  With
respect to any suit, action or proceeding (“Proceeding”) arising out of or
relating to this Agreement or any transaction contemplated hereby each of the
parties hereto hereby irrevocably (i) submits to the exclusive jurisdiction of
the United States District Court for the Southern District of New York or the
Court of Chancery located in the State of Delaware, County of Newcastle (the
“Selected Courts”) and waives any objection to venue being laid in the Selected
Courts whether based on the grounds of forum non conveniens or otherwise and
hereby agrees not to commence any such Proceeding other than before one of the
Selected Courts; provided, however, that a party may commence any Proceeding in
a court other than a Selected Court solely for the purpose of enforcing an order
or judgment issued by one of the Selected Courts; (ii) consents to service of
process in any Proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, or by recognized international express carrier
or delivery service, to the parties hereto at their respective addresses
referred to in Section 3.1 hereof; provided, however, that nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law; and (iii) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT

 

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ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY
IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND
AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS
WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE
PARTIES IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING
WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY, WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE SITTING WITHOUT A JURY.

 

Section 3.10                                AMENDMENTS; WAIVERS.

 

(a)                                  No provision of this Agreement may be
amended unless such amendment is approved in writing by DPA and by the Lovell
Members and Vestar Members, respectively, who, together with their Permitted
Transferees, are adversely affected by such amendment. If Members who, together
with their Permitted Transferees, collectively hold at least two-thirds of the
New Class A Units do not approve in writing such amendment to the Agreement,
such amendment shall not become effective. In addition, no such amendment shall
become effective if such amendment will have a materially disproportionate
effect on certain Members (unless disproportionate solely because of
disproportionate unit ownership) unless all such disproportionately affected
Members consent in writing to such amendment; provided further, no amendment may
be made to Section 2.1(a)(v) unless such amendment is also approved in writing
by Goldman, Sachs & Co. and UBS Securities LLC. No provision of this Agreement
may be waived unless such waiver is in writing and signed by the party against
whom the waiver is to be effective.

 

(b)                                 No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.

 

Section 3.11                                ASSIGNMENT.  Except as contemplated
by Section 3.3, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors, assigns and Permitted Transferees.

 

Section 3.12                                TAX TREATMENT.

 

(a)                                  This Agreement shall be treated as part of
the partnership agreement of DPA as described in Section 761(c) of the Internal
Revenue Code of 1986, as amended, and Sections 1.704-1(b)(2)(ii)(h) and
1.761-1(c) of the Treasury Regulations.

 

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(b)                                 As required by the Code and the Regulations:
(i) the parties shall report an Exchange consummated hereunder as a taxable sale
of New Class A Units by a Member to the Corporation (in conjunction with an
associated cancellation of Class B Shares) and (ii) no party shall take a
contrary position on any income tax return, amendment thereof or communication
with a taxing authority.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered, all as of the date first set forth above.

 

 

DUFF & PHELPS ACQUISITIONS, LLC

 

 

 

 

 

By:

/s/ Noah Gottdiener

 

Name: Noah Gottdiener

 

Title: Chief Executive Officer

 

 

 

 

 

LM DUFF HOLDINGS, LLC

 

 

 

 

 

By:

/s/ Noah Gottdiener

 

Name: Noah Gottdiener

 

Title: Chief Executive Officer

 

 

 

 

 

LM DUFF HOLDINGS, LLC

 

 

 

 

 

By: Lovell Minnick Equity Partners II LP, its Manager

 

 

 

By: Lovell Minnick Equity Advisors II LLC, its General Partner

 

 

 

By: Lovell Minnick Partners LLC, its Managing Member

 

 

 

By:

/s/ Robert Belke

 

Name: Robert Belke

 

Title: Managing Director

 

 

 

 

 

VESTAR CAPITAL PARTNERS IV, L.P.

 

 

 

 

 

By:

/s/ Sander Levy

 

Name: Sander Levy

 

Title: Managing Director

 

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VESTAR/D&P HOLDINGS LLC

 

 

 

 

 

By:

/s/ Sander Levy

 

Name: Sander Levy

 

Title: Managing Director

 

 

 

 

 

ON BEHALF OF EACH OF THE INDIVIDUAL MEMBERS OF DUFF & PHELPS ACQUISITIONS, LLC

 

 

 

NOAH GOTTDIENER

 

 

 

By:

/s/ Noah Gottdiener

 

Name: Noah Gottdiener

 

Title: Attorney-In-Fact for the Members

 

 

 

GERARD CREAGH

 

 

 

By:

/s/ Gerard Creagh

 

Name: Gerard Creagh

 

Title: Attorney-In-Fact for the Members

 

 

Signature Page for the Exchange Agreement

 

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