Exhibit 10.1

 

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DUFF & PHELPS ACQUISITIONS, LLC

 

A Delaware Limited Liability Company

 

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THIRD AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

Dated as of October 3, 2007

 

THE COMPANY INTERESTS REPRESENTED BY THIS THIRD AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES
LAWS.  SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED
OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND APPLICABLE LAWS
OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS
ON TRANSFERABILITY SET FORTH HEREIN.

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I DEFINITIONS

3

Section 1.1

Definitions

3

Section 1.2

Terms Generally

16

 

 

 

ARTICLE II GENERAL PROVISIONS

17

Section 2.1

Formation

17

Section 2.2

Name

17

Section 2.3

Term

17

Section 2.4

Purpose; Powers

17

Section 2.5

Foreign Qualification

18

Section 2.6

Registered Office; Registered Agent; Principal Office; Other Offices

18

Section 2.7

No State Law Partnership

18

 

 

 

ARTICLE III CAPITALIZATION

19

Section 3.1

Units; Initial Capitalization; Schedules

19

Section 3.2

Authorization and Issuance of Additional Units

19

Section 3.3

Capital Accounts

20

Section 3.4

No Withdrawal

22

Section 3.5

Redemption of Class A Stock

22

Section 3.6

Loans From Members

23

Section 3.7

No Right of Partition

23

 

 

 

ARTICLE IV DISTRIBUTIONS

23

Section 4.1

Distributions

23

Section 4.2

Unvested Units

23

Section 4.3

Successors

24

Section 4.4

Tax Distributions

24

Section 4.5

Security Interest and Right of Set Off

24

Section 4.6

Certain Distributions

25

 

 

 

ARTICLE V ALLOCATIONS

25

Section 5.1

Allocations for Capital Account Purposes

25

Section 5.2

Allocations for Tax Purposes

28

Section 5.3

Members’ Tax Reporting

30

Section 5.4

Indemnification and Reimbursement for Payments on Behalf of a Member

30

 

 

 

ARTICLE VI MANAGEMENT

31

Section 6.1

The Managing Member; Delegation of Authority and Duties

31

Section 6.2

Officers

33

Section 6.3

Duties of Officers

33

Section 6.4

Liability of Members

34

 

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Section 6.5

Indemnification by the Company

34

Section 6.6

Investment Representations of Members

35

 

 

 

ARTICLE VII WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS; ADMISSION
OF NEW MEMBERS

35

Section 7.1

Member Withdrawal

35

Section 7.2

Continuation of Vesting

35

Section 7.3

Dissolution

36

Section 7.4

Transfer by Members

37

Section 7.5

Admission or Substitution of New Members

37

Section 7.6

Compliance with Law

38

 

 

 

ARTICLE VIII BOOKS AND RECORDS; FINANCIAL STATEMENTS AND OTHER INFORMATION; TAX
MATTERS

38

Section 8.1

Books and Records; Management Interviews

38

Section 8.2

Information

39

Section 8.3

Fiscal Year; Taxable Year

39

Section 8.4

Certain Tax Matters

39

 

 

 

ARTICLE IX MISCELLANEOUS

40

Section 9.1

Schedules

40

Section 9.2

Governing Law

41

Section 9.3

Successors and Assigns

41

Section 9.4

Amendments

41

Section 9.5

Notices

41

Section 9.6

Counterparts

41

Section 9.7

Power of Attorney

42

Section 9.8

Entire Agreement

42

Section 9.9

Remedies

42

Section 9.10

Severability

42

Section 9.11

Creditors

42

Section 9.12

Waiver

43

Section 9.13

Further Action

43

Section 9.14

Delivery by Facsimile or Email

43

 

 

 

Schedule A     —

Schedule of Units

 

 

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THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
DUFF & PHELPS ACQUISITIONS, LLC
A Delaware Limited Liability Company

 

This THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Duff &
Phelps Acquisitions, LLC, dated and effective as of October 3, 2007 (this
“Agreement”), is adopted, executed and agreed to, for good and valuable
consideration, by and among Duff & Phelps Acquisitions, LLC, a Delaware limited
liability company (the “Company”), and the Members (as defined below) listed on
the Schedule of Members. Any reference in this Agreement to any Member shall
include such Member’s Successors in Interest (as defined below) to the extent
such Successors in Interest have become Substituted Members in accordance with
the provisions of this Agreement.

 

WHEREAS, the Company was formed as a limited liability company pursuant to the
Act by the filing of its Certificate of Formation with the Secretary of State of
the State of Delaware on September 7, 2005;

 

WHEREAS, on September 7, 2005, Duff & Phelps Holdings, LLC (“DPH”) and the
Company executed and delivered that certain Limited Liability Company Agreement
of the Company (the “Original Agreement”);

 

WHEREAS, on September 30, 2005, DPH, Vestar Capital Partners IV, L.P.  (“VCP
IV”), Vestar/D&P Holdings LLC (“VDP” and, together with VCP IV, “Vestar”), LM
Duff Holdings LLC (“Lovell Minnick”), the Company and the other Members thereto
executed and delivered (i) that certain Amended and Restated Limited Liability
Company Agreement of the Company (the “First Amended Agreement”), thereby
amending and restating the Original Agreement in its entirety, and (ii) that
certain Securityholders Agreement among the Company and the Members thereto;

 

WHEREAS, on October 10, 2006, the Company executed and delivered that certain
Unit Purchase Agreement (the “Chanin Unit Purchase Agreement”), pursuant to
which the Company acquired all of the limited liability company membership
interests of Chanin Capital Partners, LLC (“Chanin”) in exchange for the
consideration set forth therein, including certain membership interests in the
Company;

 

WHEREAS, on October 31, 2006, Vestar, Lovell Minnick, DPH, D&P Class C Holdings
LLC and the Company executed and delivered that certain Second Amended and
Restated Limited Liability Company Agreement of the Company (the “Second Amended
Agreement”);

 

WHEREAS, pursuant to Section 9.5 of the Second Amended Agreement, the Management
Committee (as defined in the Second Amended Agreement) may cause this Agreement
to be executed and delivered with the consent of the Majority Members and DPH;

 

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WHEREAS, the Majority Members and DPH constitute all of the Members necessary to
adopt this Agreement;

 

WHEREAS, the Management Committee, the Majority Members and DPH now wish to
amend and restate the Second Amended Agreement;

 

WHEREAS, the Existing DPA Members (as defined in the Reorganization Agreement,
as defined below) own 100% of the outstanding membership interests of the
Company;

 

WHEREAS, the Management Committee has approved the conversion of all classes of
Units into New Class A Units;

 

WHEREAS, the Management Committee and the Board of Managers of DPH has approved
the merger of DPH with and into DPA (the “DPH Merger”), whereby DPH’s
outstanding membership interests held by the Existing DPH Members (as defined in
the Reorganization Agreement) will be cancelled and the Existing DPH Members
will receive New Class A Units, in accordance with the DPH Merger Agreement;

 

WHEREAS, the members holding a majority of the Class B Interests (as defined in
the Reorganization Agreement) of DPH, the members holding a majority of all
other classes of interests in DPH and the Vestar Majority Holders and Lovell
Minnick Majority Holders must approve the DPH Merger Agreement and the DPH
Merger;

 

WHEREAS, the parties to the Securityholders Agreement will terminate the
Securityholders Agreement;

 

WHEREAS, Duff & Phelps Corporation will be formed as a corporation organized
under the laws of Delaware (“Pubco”), and Pubco will issue shares of class B
stock (the “Class B Stock”) equal to the number of outstanding New Class A Units
of the Company (the “New Class A Units”) as of such date;

 

WHEREAS, Pubco will issue shares of its class A stock (the “Class A Stock”) to
the public in the initial public offering of shares of stock of Pubco (the
“IPO”), and will contribute all of the net proceeds received by it from the IPO
to the Company in exchange for a number of New Class A Units in the Company
equal to the number of shares of Class A Stock issued in the IPO;

 

WHEREAS, the Management Committee and the Majority Members now wish that
following the consummation of the transactions described above, Pubco will
become the sole managing member of the Company (the “Managing Member”);

 

WHEREAS, following the contribution of the proceeds of the IPO from Pubco, the
Company will redeem a number of New Class A Units from Vestar, Lovell Minnick,
the holders of Class B Interests of DPH and the Electing Members (as the terms
“Class B Interests” and “Electing Members” are defined in the Reorganization
Agreement);

 

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NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto, each intending to be legally bound, agree that the
Second Amended Agreement is hereby amended and restated in its entirety, and
further agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                      Definitions.

 

Unless the context otherwise requires, the following terms shall have the
following meanings for purposes of this Agreement:

 

“Act” means the Delaware Limited Liability Company Act, 6 Del. L. Sections
18-101 et seq., as it may be amended from time to time, and any successor to the
Act.

 

“Additional Member” means any Person that has been admitted to the Company as a
Member pursuant to Section 7.5 by virtue of having received its Membership
Interest from the Company and not from any other Member or Assignee.

 

“Adjusted Capital Account” means the Capital Account maintained for each Member
as of the end of each Fiscal Year of the Company, (a) increased by any amounts
that such Member is obligated to restore under the standards set by Treasury
Regulations Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore
under Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of the end of
such Fiscal Year, are reasonably expected to be allocated to such Member in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulations Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such Fiscal Year, are reasonably expected to be made to
such Member in subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to such Member’s
Capital Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to Section 5.1(e)(i)
or Section 5.1(e)(ii)). The foregoing definition of Adjusted Capital Account is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.  The
“Adjusted Capital Account” of a Member in respect of a Unit shall be the amount
that such Adjusted Capital Account would be if such Unit were the only interest
in the Company held by such Member from and after the date on which such Unit
was first issued.

 

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Section 3.3(d)(i) or Section 3.3(d)(ii).

 

“Affiliate” when used with reference to another Person means any Person (other
than the Company), directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with, such other Person.  In
addition, Affiliates of a Member shall include all its Members, officers,
employees and former Members in their capacities as such.

 

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“Agreed Allocation” means any allocation, other than a Required Allocation, of
an item of income, gain, loss or deduction pursuant to the provisions of Section
5.1, including, without limitation, a Curative Allocation (if appropriate to the
context in which the term “Agreed Allocation” is used).

 

“Agreed Value” of any Contributed Property means the fair market value of such
property or other consideration at the time of contribution as determined by the
Managing Member, without taking into account any liabilities to which such
Contributed Property was subject at such time.  The Managing Member shall use
such method as it determines to be appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Company in a single or
integrated transaction among each separate property on a basis proportional to
the fair market value of each Contributed Property.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

 “Assignee” means any Transferee to which a Member or another Assignee has
Transferred all or a portion of its interest in the Company in accordance with
the terms of this Agreement, but that is not a Member.

 

“Assumed Tax Rate” means, for any taxable year, the highest marginal effective
rate of federal, state and local income tax applicable to an individual resident
in New York, New York (or, if higher, a corporation doing business in New York,
New York), taking account of any differences in rates applicable to ordinary
income and capital gains and any allowable deductions in respect of such state
and local taxes in computing a Member’s liability for federal income tax;
provided that the Assumed Tax Rate for ordinary income initially will be set at
45 percent, as adjusted by decision of the Managing Member; and provided further
that the Assumed Tax Rate for ordinary income shall be recalculated at any time
that the applicable tax rates change.

 

 “Bankruptcy” means, with respect to any Person, the occurrence of any of the
following events: (i) the filing of an application by such Person for, or a
consent to, the appointment of a trustee or custodian of such Person’s assets;
(ii) the filing by such Person of a voluntary petition in Bankruptcy or the
seeking of relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or the filing of a pleading in any court of record
admitting in writing such Person’s inability to pay its debts as they become
due; (iii) the failure of such Person to pay its debts as such debts become due;
(iv) the making by such Person of a general assignment for the benefit of
creditors; (v) the filing by such Person of an answer admitting the material
allegations of, or such Person’s consenting to, or defaulting in answering, a
Bankruptcy petition filed against him in any Bankruptcy proceeding or petition
seeking relief under Title 11 of the United States Code, as now constituted or
as hereafter amended; or (vi) the entry of an order, judgment or decree by any
court of competent jurisdiction adjudicating such Person a bankrupt or insolvent
or for relief in respect of such Person or appointing a trustee or custodian of
such Person’s assets and the continuance of such order, judgment or decree
unstayed and in effect for a period of 60 consecutive calendar days.

 

“Book-Tax Disparity” means, with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the

 

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difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required to close.

 

“Capital Account” means the capital account maintained for a Member pursuant to
Section 3.3.

 

“Capital Contribution” means any cash, cash equivalents or the Fair Market Value
of other property that a Member contributes to the Company with respect to any
Unit or other Equity Securities issued pursuant to ARTICLE III (net of
liabilities assumed by the Company or to which such property is subject).

 

“Carrying Value” means (a) with respect to a Contributed Property, subject to
the following sentence, the Agreed Value of such property reduced (but not below
zero) by all depreciation, amortization and cost recovery deductions charged to
the Members’ Capital Accounts in respect of such Contributed Property, and (b)
with respect to any other Company property, subject to the following sentence,
the adjusted basis of such property for federal income tax purposes, all as of
the time of determination.  The Carrying Value of any property shall be adjusted
from time to time in accordance with Section 3.3(d)(i) and Section 3.3(d)(ii)
and to reflect changes, additions or other adjustments to the Carrying Value for
dispositions and acquisitions of Company properties, as deemed appropriate by
the Managing Member.

 

 “CEO” means the Chief Executive Officer of the Company.

 

“Certificate” has the meaning set forth in Section 2.1.

 

“CFO” means the Chief Financial Officer of the Company.

 

“Chanin” has the meaning set forth in the recitals hereto.

 

“Chanin Unit Purchase Agreement” has the meaning set forth in the recitals
hereto.

 

“Class A Stock” has the meaning set forth in the recitals hereof.

 

“Class B Stock” has the meaning set forth in the recitals hereof.

 

“Code” means the United States Internal Revenue Code of 1986, as amended from
time to time.

 

“Company” has the meaning set forth in the preamble hereto.

 

“Company EBITDA” means, for any period, the consolidated net income of the
Company and its Subsidiaries for such period, plus, without duplication, (i) the
sum of the amounts attributable to (to the extent deducted from such net income)
(A) depreciation and

 

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amortization for such period, (B) U.S. federal, state and local income tax
expense for such period, (C) interest expense (less interest income) for such
period, (D) any non-cash charges (less non-cash income) for such period for
which no cash payments are or will be due and payable during any future period,
(E) any amounts payable by D&P LLC pursuant to that certain Professional
Services Agreement, dated as of September 30, 2005, by and among D&P LLC, Vestar
Capital Partners, Lovell Minnick Partners LLC and DPH, (F) all fees and expenses
payable by the Company or any of its Subsidiaries with respect to the
transaction contemplated by the Transaction Documents (as such term is defined
in the Second Amended Agreement) and (G) any special cash bonus award payments
payable by the Company or any of its Subsidiaries pursuant to (1) the first
paragraph under the heading “Retention Payments” and (2) the last paragraph
under the heading “Annual Bonus and other Special Annual Payments,” in each
case, set forth in those certain employment letters entered into by and between
D&P LLC (and subsequently assigned to D&P Employment) and certain other Persons,
in each case, calculated in accordance with GAAP as in effect on the date
hereof, plus (ii) such other adjustments as may be agreed from time to time by
the Managing Member and the Majority Unitholders. Company EBITDA for any Fiscal
Year shall be based on the financial statements for such Fiscal Year delivered
in accordance with Section 8.2(a)(iii) of the Second Amended Agreement, and
Company EBITDA for any trailing 12-month period other than a Fiscal Year shall
be based on the financial statements delivered in accordance with Section
8.2(a)(1) of the Second Amended Agreement.

 

“Company Minimum Gain” has the meaning set forth for the term “partnership
minimum gain” in Treasury Regulations Section 1.704-2(d).

 

“Control” means, when used with reference to any Person, the power to direct the
management or policies of such Person, directly or indirectly, by or through
stock or other equity ownership, agency or otherwise, or pursuant to or in
connection with an agreement, arrangement or other understanding (written or
oral); and the terms “controlling” and “controlled” shall have meanings
correlative to the foregoing.

 

“Contributed Property” means any property contributed to the Company by a
Member.

 

“Curative Allocation” means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 5.1(e)(ix).

 

“Depreciation” means, for each Fiscal Year or other period, an amount equal to
the depreciation, amortization or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such year or other
period, except that if the Carrying Value of an asset differs from its adjusted
basis for federal income tax purposes at the beginning of such year or other
period, Depreciation shall be an amount which bears the same ratio to such
beginning Carrying Value as the federal income tax depreciation, amortization or
other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be calculated with reference to such beginning Carrying
Value using any reasonable method selected by the Managing Member.

 

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“Distributable Assets” means, with respect to any fiscal period, all cash
receipts (including from any operating, investing and financing activities) and
(if distribution thereof is determined to be necessary or desirable by the
Managing Member) other assets of the Company from any and all sources, reduced
by operating cash expenses, contributions of capital to Subsidiaries of the
Company and payments (if any) required to be made in connection with any loan to
the Company and any reserve for contingencies or escrow required, in each case,
as is determined in Good Faith by the Managing Member; provided that
Distributable Assets shall not exceed the amount permitted under Section 18-607
of the Act.

 

“D&P LLC” means Duff & Phelps, LLC, a Delaware limited liability company and a
direct wholly-owned Subsidiary of the Company.

 

“D&P Management Co.” means Duff & Phelps Management Company, a Delaware
corporation and a Subsidiary of the Company.

 

“D&P Management LLC” means Duff & Phelps Management Co., LLC, a Delaware limited
liability company and a Subsidiary of the Company.

 

“D&P Securities” means Duff & Phelps Securities, LLC, a Delaware limited
liability company and a wholly-owned Subsidiary of D&P LLC.

 

“DPH” has the meaning set forth in the preamble hereto.

 

“DPH LLC Agreement” means that certain Second Amended and Restated Limited
Liability Company Agreement of DPH, dated as of September 30, 2005, by and among
DPH and each of the members party thereto, as in effect on such date and as
amended, restated, supplemented or otherwise modified from time to time.

 

“DPH Merger Agreement” has the meaning set forth in the recitals hereto.

 

“DPH Merger” has the meaning set forth in the recitals hereto.

 

“Economic Risk of Loss” has the meaning set forth in Section 5.1(e)(vi).

 

“Electing Members” has the meaning given to it in the Reorganization Agreement.

 

“Equity Securities” means, as applicable, (i) any capital stock, membership
interests or other share capital, (ii) any securities directly or indirectly
convertible into or exchangeable for any capital stock, membership interests or
other share capital or containing any profit participation features, (iii) any
rights or options directly or indirectly to subscribe for or to purchase any
capital stock, membership interests, other share capital or securities
containing any profit participation features or to subscribe for or to purchase
any securities directly or indirectly convertible into or exchangeable for any
capital stock, membership interests, other share capital or securities
containing any profit participation features, (iv) any share appreciation
rights, phantom share rights or other similar rights, or (v) any Equity
Securities issued or issuable with respect to the securities referred to in
clauses (i) through (iv)

 

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above in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.

 

“Exchange Agreement” means the Exchange Agreement, among the Company and the
other parties named therein, dated as of October 3, 2007.

 

“Expert” means an independent investment bank, accounting firm or other Person
of national standing having particular expertise in the valuation of businesses
comparable to that of the Company and its Subsidiaries.

 

“Existing DPA Members” has the meaning given to it in the Reorganization
Agreement.

 

“Existing DPH Members” has the meaning given to it in the Reorganization
Agreement.

 

“Fair Market Value” means (i) in reference to a particular Unit or, as the case
may be, all of the outstanding Units, the hypothetical amount that would be
distributed with respect to such Unit(s), as determined pursuant to an
appraisal, which appraisal shall be subject to the approval of the Majority
Members, performed at the expense of the Company by (A) the Company or any of
its Subsidiaries or (B) an investment bank, accounting firm or other Person of
national standing having particular expertise in the valuation of businesses
comparable to that of the Company mutually selected by the Company and the
Majority Members, and where such appraisal (1) determines the net equity value
of the Company, and (2) assumes the distribution to the Members pursuant to
Section 4.1 and ARTICLE VII of the proceeds that would hypothetically be
received with respect to such Unit(s) based on such net equity value, and (ii)
in reference to assets or securities other than Units, the fair market value for
such assets or securities as between a willing buyer and a willing seller in an
arm’s length transaction occurring on the date of valuation, taking into account
all relevant factors determinative of value, as is reasonably determined in Good
Faith by the Managing Member, and subject to the approval of the Majority
Members.

 

“First Amended Agreement” has the meaning set forth in the recitals hereto.

 

“Fiscal Quarter” means each fiscal quarter of the Company and its Subsidiaries,
ending on the last day of each of March, June, September and December of any
Fiscal Year.

 

“Fiscal Year” means the fiscal year of the Company and its Subsidiaries, ending
on December 31 of each calendar year.

 

 “GAAP” means accounting principles generally accepted in the United States of
America, consistently applied and maintained throughout the applicable periods.

 

“Good Faith” shall mean a Person having acted in good faith and in a manner such
Person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to a criminal proceeding, having had no reasonable
cause to believe such Person’s conduct was unlawful.

 

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“Governmental Entity” means the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government, including any court, in each case, having jurisdiction over the
Company or any of its Subsidiaries or any of the property or other assets of the
Company or any of its Subsidiaries.

 

 “HSR Act” has the meaning set forth in Section 7.3(f).

 

“Incentive Plan” means any equity incentive or similar plan pursuant to which
the Managing Member may issue shares of Class A Stock from time to time.

 

“Income” means individual items of Company income and gain determined in
accordance with the definitions of Net Income and Net Loss.

 

“Indebtedness” shall mean, for any Person at the time of any determination,
without duplication, and without including any amounts owed by such Person to
the Company or any wholly-owned Subsidiary of the Company, the following
obligations, contingent or otherwise:  (i) all obligations for borrowed money,
(ii) all obligations evidenced by notes, bonds, debentures, acceptances or
similar instruments, or arising out of letters of credit or bankers’ acceptances
issued for such Person’s account, (iii) all obligations, whether or not assumed,
secured by any Lien or payable out of the proceeds or production from any
property or assets now or hereafter owned or acquired by such Person other than
a Permitted Lien, (iv) the capitalized portion of lease obligations under
capitalized leases, (v) all obligations arising from installment purchases of
property or representing the deferred purchase price of property or services in
respect of which such person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the Ordinary Course of Business), (vi) all obligations of such Person upon which
interest charges are customarily paid or accrued and (vii) any other
obligations, contingent or otherwise, of such Person that, in accordance with
GAAP, should be classified upon the balance sheet of such Person as indebtedness
(other than trade payables or current liabilities incurred in the Ordinary
Course of Business).

 

“IPO” has the meaning set forth in the recitals hereto.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof), any sale of receivables with recourse
against the Company or any of its Subsidiaries, any filing or agreement to file
a financing statement as a debtor under the Uniform Commercial Code or any
similar statute other than to reflect ownership by a third party of property
leased to the Company or any of its Subsidiaries under a lease that is not in
the nature of a conditional sale or title retention agreement.

 

“Loss” means individual items of Company loss and deduction determined in
accordance with the definitions of Net Income and Net Loss.

 

“Lovell Minnick” has the meaning set forth in the preamble hereto.

 

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“Lovell Minnick Majority Holders” means, at any time, the holders of a majority
of the Units then held by Lovell Minnick.

 

 “Majority Members” means, collectively, the Vestar Majority Holders and the
Lovell Minnick Majority Holders.

 

“Managing Member” has the meaning set forth in the recitals hereto.

 

“Member” means each Person listed on the Schedule of Members and each other
Person who is hereafter admitted as a Member in accordance with the terms of
this Agreement and the Act.  The Members shall constitute the “members” (as such
term is defined in the Act) of the Company.  Except as otherwise set forth
herein or in the Act, the Members shall constitute a single class or group of
members of the Company for all purposes of the Act and this Agreement.

 

“Member Minimum Gain” means minimum gain attributable to Member Nonrecourse Debt
determined in accordance with Treasury Regulations Section 1.704-2(i).

 

“Member Nonrecourse Debt” has the meaning set forth for the term “partner
nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

 

“Member Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury
Regulations Section 1.704-2(i)(2).

 

“Member Nonrecourse Deduction” has the meaning set forth for the term “partner
nonrecourse deduction” in Treasury Regulations Section 1.704-2(i)(2).

 

“Membership Interest” means, with respect to each Member, such Member’s economic
interest and rights as a Member.

 

“Net Agreed Value” means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either assumed by the
Company upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Member by the
Company, the Company’s Carrying Value of such property (as adjusted pursuant to
Section 3.3(d)(ii)) at the time such property is distributed, reduced by any
liabilities either assumed by such Member upon such distribution or to which
such property is subject at the time of distribution.

 

“Net Income” means, for any taxable year, the excess, if any, of the Company’s
items of income and gain for such taxable year over the Company’s items of loss
and deduction for such taxable year.  The items included in the calculation of
Net Income shall be determined in accordance with Section 3.3(b) and shall not
include any items specially allocated under Section 5.1(e).

 

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“Net Loss” means, for any taxable year, the excess, if any, of the Company’s
items of loss and deduction for such taxable year over the Company’s items of
income and gain for such taxable year.  The items included in the calculation of
Net Loss shall be determined in accordance with Section 3.3(b) and shall not
include any items specially allocated under Section 5.1(e).

 

“New Class A Units” has the meaning set forth in Section 3.1.

 

“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Members pursuant to Section 5.1(e) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no other
consideration.

 

“Nonrecourse Deductions” means any and all items of loss, deduction, or
expenditure (including, without limitation, any expenditure described in Section
705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury
Regulations Section 1.704-2(b), are attributable to a Nonrecourse Liability.

 

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations
Section 1.752-1(a)(2).

 

 “Officer” means each Person designated as an officer of the Company pursuant to
and in accordance with the provisions of Section 6.2, subject to any resolution
of the Managing Member appointing such Person as an officer or relating to such
appointment.

 

“Ordinary Course of Business” means the ordinary course of the business of the
Company and its Subsidiaries consistent with past custom and practice (including
with respect to quantity, quality and frequency).

 

“Original Agreement” has the meaning set forth in the recitals hereof.

 

 “Percentage Interest” means, with respect to any Member as of any date of
determination, (a) as to any New Class A Units, the product obtained by
multiplying (i) 100% less the aggregate percentage applicable to all Units
referred to in clause (b) by (ii) the quotient obtained by dividing (x) the
number of such Units held by such Member by (y) the total number of all
outstanding New Class A Units, and (b) as to any other Units, the percentage
established for such Units by the Managing Member as a part of such issuance.

 

“Permitted Business” has the meaning set forth in Section 6.1(c).

 

“Permitted Liens” means:

 

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(i)                                     Liens with respect to taxes, assessments
and other governmental charges or levies not yet due and payable or actively
contested in good faith;

 

(ii)                                  deposits or pledges made in the Ordinary
Course of Business in connection with, or to secure payment of, utilities or
similar services, workers’ compensation, unemployment insurance, old age
pensions or other social security, governmental insurance and governmental
benefits, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, performance and return of
money bonds and similar obligations;

 

(iii)                               purchase money Liens in any property
acquired by the Company or any of its Subsidiaries in the Ordinary Course of
Business to the extent permitted by this Agreement;

 

(iv)                              interests or title of a licensor, licensee,
lessor or sublessor under any license or lease permitted by this Agreement;

 

(v)                                 Liens in respect of property of the Company
or any of its Subsidiaries imposed by applicable law which were incurred in the
Ordinary Course of Business, such as warehousemen’s, mechanic’s, statutory
landlord’s, materialmen’s, carriers’ or contractors’ liens or encumbrances or
any similar Lien or restriction for amounts not yet due and payable;

 

(vi)                              easements, rights of way, restrictions and
other similar charges and encumbrances on real property and minor defects or
irregularities in the title thereof that do not (A) secure obligations for the
payment of money or (B) materially impair the value of such property or its use
by the Company or any of its Subsidiaries in the Ordinary Course of Business;
and

 

(vii)                           Liens securing Indebtedness under the Senior
Credit Agreement.

 

“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) and (h) a liquidating
trust, as defined in Treasury Regulations section 1.7701-4(d), or other entity
with comparable characteristics.  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

 

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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 the Company 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.

 

“Person” means an individual, a partnership (including a limited partnership), a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, association or other
entity or a Governmental Entity.

 

“Pledge” means pledge, grant a security interest in, create a lien on, assign
the right to receive distributions or proceeds from, or otherwise encumber,
directly or indirectly, or any act of the foregoing.

 

“Proceeding” has the meaning set forth in Section 6.5.

 

“Pubco” has the meaning set forth in the recitals hereto.

 

“Quarterly Estimated Tax Periods” means the two, three, and four calendar month
periods with respect to which Federal quarterly estimated tax payments are
made.  The first such period begins on January 1 and ends on March 31.  The
second such period begins on April 1 and ends on May 31.  The third such period
begins on June 1 and ends on August 31.  The fourth such period begins on
September 1 and ends on December 31.

 

“Required Allocations” means (a) any limitation imposed on any allocation of Net
Losses under Section 5.1(b) and (b) any allocation of an item of income, gain,
loss or deduction pursuant to Section 5.1(e)(i), 5.1(e)(ii), 5.1(e)(iii),
5.1(e)(vi) or 5.1(e)(viii).

 

“Reorganization Agreement” means that certain Reorganization Agreement, dated as
of •, 2007, entered into by and among the Company, each of the individuals and
entities listed on Annex A thereto and each of the individuals and entities
listed on Annex B thereto.

 

“Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Company recognized for federal income tax purposes resulting from
a sale, exchange or other disposition of a Contributed Property or Adjusted
Property, to the extent such item of gain or loss is not allocated pursuant to
Section 5.2(b)(i)(A) or 5.2(b)(ii)(A), respectively, to eliminate Book-Tax
Disparities.

 

“Schedule of Members” has the meaning set forth in Section 3.1(b).

 

“Second Amended Agreement” has the meaning set forth in the recitals hereto.

 

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“Securities” means any debt securities or Equity Securities of any issuer,
including common and preferred stock and interests in limited liability
companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust
receipts and other obligations, instruments or evidences of indebtedness, other
property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties
and mineral properties, short term investments commonly regarded as money market
investments, bank deposits and interests in personal property of all kinds,
whether tangible or intangible.

 

“Securityholders Agreement” means the Amended and Restated Securityholders
Agreement, dated October 31, 2006.

 

“Segregated Account” has the meaning set forth in Section 4.2.

 

“Senior Credit Agreement” means the Company’s principal credit facility, which
shall initially be that certain Credit Agreement, dated as of September 30,
2005, by and among D&P LLC, the Company, General Electric Capital Corporation
and each of the other parties from time to time signatory thereto, as amended or
amended and restated (i) by that certain Amendment Number One, dated as of June
14, 2006 and that certain Amendment Number Two, dated as of October 10, 2006 and
(ii) from time to time, and any successor principal credit facility in
replacement thereof.

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof.  For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association or other
business entity gains or losses or shall be or control any managing director or
general partner of such limited liability company, partnership, association or
other business entity.  For purposes hereof, references to a “Subsidiary” of any
Person shall be given effect only at such times that such Person has one or more
Subsidiaries and, unless otherwise indicated, the term “Subsidiary” refers to a
Subsidiary of the Company.

 

“Substituted Member” means any Person that has been admitted to the Company as a
Member pursuant to Section 7.5 by virtue of such Person receiving all or a
portion of a Membership Interest from a Member or its Assignee and not from the
Company.

 

“Successor in Interest” means any (i) trustee, custodian, receiver or other
Person acting in any Bankruptcy or reorganization proceeding with

 

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respect to, (ii) assignee for the benefit of the creditors of, (iii) trustee or
receiver, or current or former officer, director or partner, or other fiduciary
acting for or with respect to the dissolution, liquidation or termination of, or
(iv) other executor, administrator, committee, legal representative or other
successor or assign of, any Member, whether by operation of law or otherwise.

 

“Tax Distribution” has the meaning set forth in Section 4.4.

 

“Tax Distribution Amount” has the meaning set forth in Section 4.4.

 

“Tax Matters Member” has the meaning set forth in Section 8.4(d).

 

“Transaction Documents” means, collectively, this Agreement, the Exchange
Agreement, the Reorganization Agreement, the DPH Merger Agreement, and the Tax
Receivable Agreement.

 

“Transfer” means sell, assign, convey, contribute, give, or otherwise transfer,
whether directly or indirectly, or any act of the foregoing, but excludes Pledge
or any act of Pledging.  The terms “Transferee,” “Transferor,” “Transferred,”
“Transferring Member” and other forms of the word “Transfer” shall have the
correlative meanings.

 

“Treasury Regulations” means the regulations, including temporary regulations,
promulgated by the United States Treasury Department under the Code, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).

 

“Unit” has the meaning set forth in Section 3.1(a).

 

“Unrealized Gain” attributable to any item of Company property means, as of any
date of determination, the excess, if any, of (a) the fair market value of such
property as of such date (as determined under Section 3.3(d)) over (b) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 3.3(d) as of such date).

 

“Unrealized Loss” attributable to any item of Company property means, as of any
date of determination, the excess, if any, of (a) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to Section
3.3(d) as of such date) over (b) the fair market value of such property as of
such date (as determined under Section 3.3(d)).

 

“VCP IV” has the meaning set forth in the preamble hereto.

 

“VDP” has the meaning set forth in the preamble hereto.

 

“Vestar” has the meaning set forth in the preamble hereto.

 

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“Vestar Majority Holders” means, at any time, the holders of a majority of the
Units then held by the Vestar Members.

 

“Vestar Members” means the Members holding an economic interest in any Units
initially issued to Vestar.

 

“Vesting Percentage” means, with respect to any Unit held by a Member, a
fraction, the numerator of which shall be the number of complete calendar years
that have lapsed since the grant of such Unit to such Member and the denominator
of which shall be the number of years designated as “Vesting Years” at the time
of the grant of such Unit, or such other percentage with respect to a period as
may be designated at the time of the grant of such Unit.

 

Section 1.2                                      Terms Generally.  In this
Agreement, unless otherwise specified or where the context otherwise requires:

 

(a)                        the headings of particular provisions of this
Agreement are inserted for convenience only and will not be construed as a part
of this Agreement or serve as a limitation or expansion on the scope of any term
or provision of this Agreement;

 

(b)                       words importing any gender shall include other
genders;

 

(c)                        words importing the singular only shall include the
plural and vice versa;

 

(d)                       the words “include,” “includes” or “including” shall
be deemed to be followed by the words “without limitation”;

 

(e)                        the words “hereof,” “herein” and “herewith” and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement;

 

(f)                          references to “Articles,” “Exhibits,” “Sections” or
“Schedules” shall be to Articles, Exhibits, Sections or Schedules of or to this
Agreement;

 

(g)                       references to any Person include the successors and
permitted assigns of such Person;

 

(h)                       the use of the words “or,” “either” and “any” shall
not be exclusive;

 

(i)                           wherever a conflict exists between this Agreement
and any other agreement, this Agreement shall control but solely to the extent
of such conflict;

 

(j)                           references to “$” or “dollars” means the lawful
currency of the United States of America;

 

(k)                        references to any agreement, contract or schedule,
unless otherwise stated, are to such agreement, contract or schedule as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof; and

 

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(l)                           the parties hereto have participated jointly in
the negotiation and drafting of this Agreement; accordingly, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any provisions of this Agreement.

 

ARTICLE II
GENERAL PROVISIONS

 

Section 2.1                                      Formation.  The Company was
formed as a Delaware limited liability company on September 7, 2005 by the
execution and filing of a Certificate of Formation (the “Certificate”) by an
authorized person under and pursuant to the Act.  The Members agree to continue
the Company as a limited liability company under the Act, upon the terms and
subject to the conditions set forth in this Agreement.  The rights, powers,
duties, obligations and liabilities of the Members shall be determined pursuant
to the Act and this Agreement.  To the extent that the rights, powers, duties,
obligations and liabilities of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.

 

Section 2.2                                      Name.  The name of the Company
is “Duff & Phelps Acquisitions, LLC,” and all Company business shall be
conducted in that name or in such other names that comply with applicable law as
the Managing Member may select from time to time.  The Managing Member may
change the name of the Company at any time and from time to time.  Prompt
notification of any such change shall be given to all Members.

 

Section 2.3                                      Term.  The term of the Company
commenced on the date the Certificate was filed with the office of the Secretary
of State of the State of Delaware and shall continue in existence perpetually
until termination or dissolution in accordance with the provisions of Section
7.3.

 

Section 2.4                                      Purpose; Powers.

 

(a)                        General Powers.  The nature of the business or
purposes to be conducted or promoted by the Company is to engage in any lawful
act or activity for which limited liability companies may be organized under the
Act.  The Company may engage in any and all activities necessary, desirable or
incidental to the accomplishment of the foregoing.  Notwithstanding anything
herein to the contrary, nothing set forth herein shall be construed as
authorizing the Company to possess any purpose or power, or to do any act or
thing, forbidden by law to a limited liability company organized under the laws
of the State of Delaware.

 

(b)                       Company Action.  Subject to the provisions of this
Agreement and except as prohibited by applicable law, (i) the Company may, with
the approval of the Managing Member, enter into and perform any and all
documents, agreements and instruments, all without any further act, vote or
approval of any Member and (ii) the Managing Member may authorize any Person
(including any Member or Officer) to enter into and perform any document on
behalf of the Company.

 

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Section 2.5                                      Foreign Qualification.  Prior
to the Company’s conducting business in any jurisdiction other than the State of
Delaware, the Managing Member shall cause the Company to comply, to the extent
procedures are available and those matters are reasonably within the control of
the Officers, with all requirements necessary to qualify the Company as a
foreign limited liability company in that jurisdiction.

 

Section 2.6                                      Registered Office; Registered
Agent; Principal Office; Other Offices.  The registered office of the Company
required by the Act to be maintained in the State of Delaware shall be the
office of the initial registered agent named in the Certificate or such other
office (which need not be a place of business of the Company) as the Managing
Member may designate from time to time in the manner provided by law.  The
registered agent of the Company in the State of Delaware shall be the initial
registered agent named in the Certificate or such other Person or Persons as the
Managing Member may designate from time to time in the manner provided by law. 
The principal office of the Company shall be at such place as the Managing
Member may designate from time to time, which need not be in the State of
Delaware, and the Company shall maintain records at such place.  The Company may
have such other offices as the Managing Member may designate from time to time.

 

Section 2.7                                      No State Law Partnership.  (a) 
The Members intend that the Company shall not be a partnership (including a
limited partnership) or joint venture, and that no Member or Officer shall be a
partner or joint venturer of any other Member or Officer by virtue of this
Agreement, for any purposes other than as is set forth in the last sentence of
this Section 2.7(a), and this Agreement shall not be construed to the contrary. 
The Members intend that the Company shall be treated as a partnership for
federal and, if applicable, state or local income tax purposes, and each Member
and the Company shall file all tax returns and shall otherwise take all tax and
financial reporting positions in a manner consistent with such treatment.

 

(b)                       So long as the Company is treated as a partnership for
federal income tax purposes, to ensure that Units are not traded on an
established securities market within the meaning of Treasury Regulations Section
1.7704-1(b) or readily tradable on a secondary market or the substantial
equivalent thereof within the meaning of Regulations Section 1.7704-1(c),
notwithstanding anything to the contrary contained herein,

 

(i)                                     the Company shall not participate in the
establishment of any such market or the inclusion of its Units thereon, and

 

(ii)                                  the Company shall not recognize any
Transfer made on any such market by:

 

(A)                  redeeming the Transferor Member (in the case of a
redemption or repurchase by the Company); or

 

(B)                    admitting the Transferee as a Member or otherwise
recognizing any rights of the Transferee, such as a right of the Transferee to
receive Company distributions (directly or indirectly) or to acquire an interest
in the capital or profits of the Company.

 

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ARTICLE III
CAPITALIZATION

 

Section 3.1                                      Units; Initial Capitalization;
Schedules.

 

(a)                        Units; Initial Capitalization.  Each Member’s
interest in the Company, including such Member’s interest, if any, in the
capital, income, gain, loss, deduction and expense of the Company and the right
to vote, if any, on certain Company matters as provided in this Agreement, shall
be represented by units of limited liability company interest (each, a “Unit”). 
The Company shall have one authorized class of Units, designated “New Class A
Units.”  The authorized Units consist of 200,000,000 New Class A Units.  The
ownership by a Member of Units shall entitle such Member to allocations of
profits and losses and other items and distributions of cash and other property
as is set forth in ARTICLE IV and ARTICLE V.

 

(b)                       Schedule of Units; Schedule of Members.  The aggregate
number of outstanding Units and the aggregate amount of cash Capital
Contributions that have been made by the Members and the Fair Market Value of
any property other than cash contributed by the Members with respect to the
Units (including, if applicable, a description and the amount of any liability
assumed by the Company or to which contributed property is subject) shall be set
forth on Schedule A attached hereto.  The Company shall also maintain a schedule
setting forth the name and address of each Member, the number of Units owned by
such Member and the aggregate Capital Contributions that have been made by such
Member with respect to such Member’s Units (such schedule, the “Schedule of
Members”).

 

Section 3.2                                      Authorization and Issuance of
Additional Units.

 

(a)                        The Managing Member shall have the right to cause the
Company to issue and/or create and issue at any time after the date hereof, and
for such amount and form of consideration as the Managing Member may determine,
additional Units (of the existing class or new classes) or other Equity
Securities of the Company (including creating other classes or series thereof
having such powers, designations, preferences and rights as may be determined by
the Managing Member). The Managing Member is expressly authorized to cause the
Company to issue Units for less than Fair Market Value, so long as the Managing
Member concludes in good faith that such issuance is in the best interests of
the Company and its Members. Subject to the foregoing, the Managing Member shall
have the power to make such amendments to this Agreement in order to provide for
such powers, designations and preferences and rights as the Managing Member in
its discretion deems necessary or appropriate to give effect to such additional
authorization or issuance.

 

(b)                       At any time the Managing Member issues a share Class A
Stock or a share of other capital stock of the Managing Member, other than
shares of Class B Stock, the net proceeds received by the Managing Member with
respect to such share, if any, shall be concurrently transferred to the Company
and the Company shall issue to the Managing Member one (1) New Class A Unit
registered in the name of the Managing Member or other equity security of the
Company, if the Managing Member issues capital stock other than Class A Stock

 

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or Class B Stock, corresponding to the number of shares of capital stock issued
by the Managing Member.

 

(c)                        Any subdivision (by any stock split, stock dividend,
reclassification, recapitalization or otherwise) or combination (by reverse
stock split, reclassification, recapitalization or otherwise) of shares of Class
A Stock shall be accompanied by an identical subdivision or combination, as
applicable, of the New Class A Units, and the Managing Member shall ensure a
corresponding adjustment to the number of shares of Class B Stock outstanding.

 

Section 3.3                                      Capital Accounts.

 

(a)                        The Managing Member shall maintain for each Member
owning Units a separate Capital Account with respect to such Units in accordance
with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made
to the Company with respect to such Units pursuant to this Agreement and (ii)
all items of Company income and gain (including, without limitation, income and
gain exempt from tax) computed in accordance with Section 3.3(b) and allocated
with respect to such Units pursuant to Section 5.1, and decreased by (x) the
amount of cash or Net Agreed Value of all actual and deemed distributions of
cash or property made with respect to such Units pursuant to this Agreement and
(y) all items of Company deduction and loss computed in accordance with Section
3.3(b) and allocated with respect to such Units pursuant to Section 5.1. The
foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations
Section 1.704-1(b) and shall be interpreted and applied in a manner consistent
with such Treasury Regulations. In the event the Managing Member shall determine
that it is prudent to modify the manner in which the Capital Accounts or any
adjustments thereto (including, without limitation, adjustments relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Company or any Members) are computed in order to comply with
such Treasury Regulations, the Managing Member may make such modification,
provided that it is not likely to have a material effect on the amounts
distributed to any Person pursuant to ARTICLE VII hereof upon the dissolution of
the Company. The Managing Member also shall (i) make any adjustments that are
necessary or appropriate to maintain equality among the Capital Accounts of the
Members and the amount of capital reflected on the Company’s balance sheet, as
computed for book purposes, in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Treasury Regulations Section 1.704-1(b).

 

(b)                       For purposes of computing the amount of any item of
income, gain, loss or deduction, which is to be allocated pursuant to ARTICLE VI
and is to be reflected in the Members’ Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes
(including, without limitation, any method of depreciation, cost recovery or
amortization used for that purpose), provided, that:

 

(i)                                     Solely for purposes of this Section 3.3,
the Company shall be treated as owning directly its proportionate share (as
determined by the Managing Member) of

 

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all property owned by any partnership, limited liability company, unincorporated
business or other entity or arrangement that is classified as a partnership for
federal income tax purposes, of which the Company is, directly or indirectly, a
partner.

 

(ii)                                  Except as otherwise provided in Treasury
Regulations Section 1.704-1(b)(2)(iv)(m), the computation of all items of
income, gain, loss and deduction shall be made without regard to any election
under Section 754 of the Code which may be made by the Company and, as to those
items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without
regard to the fact that such items are not includable in gross income or are
neither currently deductible nor capitalized for federal income tax purposes. To
the extent an adjustment to the adjusted tax basis of any Company asset pursuant
to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment in the Capital
Accounts shall be treated as an item of gain or loss.

 

(iii)                               Any income, gain or loss attributable to the
taxable disposition of any Company property shall be determined as if the
adjusted basis of such property as of such date of disposition were equal in
amount to the Company’s Carrying Value with respect to such property as of such
date.

 

(iv)                              In accordance with the requirements of Section
704(b) of the Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be determined in the
manner described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3) as if
the adjusted basis of such property on the date it was acquired by the Company
were equal to the Agreed Value of such property.  Upon an adjustment pursuant to
Section 3.3(d) to the Carrying Value of any Adjusted Property that is subject to
depreciation, cost recovery or amortization, any further deductions for such
depreciation, cost recovery or amortization attributable to such property shall
be determined in the manner described in Treasury Regulations Sections
1.704-1(b)(2)(iv)(g)(3) and 1.704-3(a)(6)(i) as if the adjusted basis of such
property were equal to the Carrying Value of such property immediately following
such adjustment; provided, however, that, if the asset has a zero adjusted basis
for federal income tax purposes, depreciation, cost recovery or amortization
deductions shall be determined using any method that the Managing Member may
adopt.

 

(c)                        A transferee of Units shall succeed to a pro rata
portion of the Capital Account of the transferor relating to the Units so
transferred.

 

(d)                       (i)  In accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed
Property and the issuance of Units as consideration for the provision of
services, the Capital Account of all Members and the Carrying Value of each
Company property immediately prior to such issuance shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to such
Company property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior to such
issuance and had been allocated to the Members at such time pursuant to Section
6.1 in the same manner as a corresponding item of gain or loss actually
recognized during such period would have been allocated. In determining such
Unrealized Gain or Unrealized Loss, the aggregate cash amount

 

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and fair market value of all Company assets (including, without limitation, cash
or cash equivalents) immediately prior to the issuance of additional Units shall
be determined by the Managing Member using such method of valuation as it may
adopt; provided, however, that the Managing Member, in arriving at such
valuation, must take fully into account the fair market value of the Units of
all Members at such time. The Managing Member shall allocate such aggregate
value among the assets of the Company (in such manner as it determines) to
arrive at a fair market value for individual properties.

 

(ii)                                  In accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Member of any Company property (other than a distribution of
cash that is not in redemption or retirement of a Unit), the Capital Accounts of
all Members and the Carrying Value of all Company property shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Company property, as if such Unrealized Gain or Unrealized
Loss had been recognized in a sale of such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Members, at such time, pursuant to Section 5.1 in the same
manner as a corresponding item of gain or loss actually recognized during such
period would have been allocated. In determining such Unrealized Gain or
Unrealized Loss, the aggregate cash amount and fair market value of all Company
assets (including, without limitation, cash or cash equivalents) immediately
prior to a distribution shall (A) in the case of an actual distribution that is
not made pursuant to ARTICLE VII or in the case of a deemed distribution, be
determined and allocated in the same manner as that provided in Section
3.3(d)(i) or (B) in the case of a liquidating distribution pursuant to ARTICLE
VII, be determined and allocated by the Liquidator using such method of
valuation as it may adopt.

 

(iii)                               The Managing Member may make the adjustments
described in clause (i) above in the manner set forth therein if the Managing
Member determines that such adjustments are necessary or useful to effectuate
the intended economic arrangement among the Members, including Members who
received Units in connection with the performance of services to or for the
benefit of the Company.

 

(e)                        Notwithstanding anything expressed or implied to the
contrary in this Agreement, in the event the Managing Member shall determine, in
its sole and absolute discretion, that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are computed in
order to effectuate the intended economic sharing arrangement of the Members,
the Managing Member may make such modification.

 

Section 3.4                                      No Withdrawal.  No Person shall
be entitled to withdraw any part of such Person’s Capital Contributions or
Capital Account or to receive any distribution from the Company, except as
expressly provided herein.

 

Section 3.5                                      Redemption of Class A Stock. 
If, at any time, any shares of Class A Stock are redeemed (whether by exercise
of a put or call, automatically or by means of another arrangement) by the
Managing Member for cash, the Company shall, immediately prior to such
redemption of Class A Stock, redeem an equal number of Units held by the
Managing Member, upon the same terms and for the same price per Unit, as such
shares of Class A Stock are redeemed.

 

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Section 3.6                                      Loans From Members.  Loans by
Members to the Company shall not be considered Capital Contributions.  If any
Member shall loan funds to the Company, then the making of such loans shall not
result in any increase in the Capital Account balance of such Member.  The
amount of any such loans shall be a debt of the Company to such Member and shall
be payable or collectible in accordance with the terms and conditions upon which
such loans are made.

 

Section 3.7                                      No Right of Partition.  No
Member shall have the right to seek or obtain partition by court decree or
operation of law of any property of the Company or any of its Subsidiaries or
the right to own or use particular or individual assets of the Company or any of
its Subsidiaries, or, except as expressly contemplated by this Agreement, be
entitled to distributions of specific assets of the Company or any of its
Subsidiaries.

 

Section 3.8                                      Non-Certification of Units;
Legend; Units are Securities

 

(a)                        Units shall be issued in non certificated form;
provided that the Managing Member may cause the Company to issue certificates to
a Member representing the Units held by such Member.  If any Unit certificate is
issued, then such certificate shall bear a legend substantially in the following
form:

 

This certificate evidences a New Class A Unit representing an interest in Duff &
Phelps Acquisitions, LLC and shall be a security within the meaning of Article 8
of the Uniform Commercial Code.

 

The interest in Duff & Phelps Acquisitions, LLC represented by this certificate
is subject to restrictions on transfer set forth in the Third Amended and
Restated Limited Liability Company Agreement of Duff & Phelps Acquisitions, LLC,
dated as of October 3, 2007, by and among Duff & Phelps Acquisitions, LLC and
each of the members from time to time party thereto, as the same may be amended
from time to time.

 

(b)                       The Company hereby irrevocably elects that all Units
shall be “securities” governed by Article 8 of the Uniform Commercial Code as in
effect from time to time in the State of Delaware or analogous provisions in the
Uniform Commercial Code in effect in any other jurisdiction.  This Section
3.7(b) shall not be amended without the prior written consent of all of the
Members, and any purported amendment to this Section 3.7(b) in violation of the
foregoing shall be null and void.

 

ARTICLE IV
DISTRIBUTIONS

 

Section 4.1                                      Distributions.  Distributions
shall be made to the Members, after Tax Distributions are made pursuant to
Section 4.4 hereof, as and when determined by the Managing Member, in accordance
with their respective Units and pro rata in respect of each class of Units.

 

Section 4.2                                      Unvested Units. 
Notwithstanding any other provision of this Agreement, to the extent that a
Member’s Vesting Percentage is less than 100%, such Member

 

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shall only be entitled to receive an amount equal to the sum of (a) the amount
otherwise distributable with respect to any Unit in which such Member’s Vesting
Percentage is 100% and (b) with respect to any other Unit, the greater of (i)
the product of the amount otherwise distributable with respect to any Unit in
which such Member was not fully vested and the Vesting Percentage or (ii) the
Tax Distribution Amount with respect to such Unit.  The Company shall maintain,
in a segregated interest-bearing account (the “Segregated Account”) any amounts
that were otherwise distributable to the Members that were not distributed to
them as a result of this Section 4.2.  Any interest thereon shall be distributed
no less frequently than annually to the applicable Members pro rata and such
interest income shall be specially allocated to such Members for purposes of
Article V.  After the end of each fiscal year, the Company shall distribute to
each such Member an amount equal to the excess of (a) the product of the
aggregate amount previously distributable with respect to the Units held by such
Member (determined without giving effect to the first sentence of this Section
4.2) and the Vesting Percentage as of the end of such fiscal year over (b) the
amounts previously distributed to such Member (exclusive of any amounts
distributed pursuant to the preceding sentence).

 

Section 4.3                                      Successors.  For purposes of
determining the amount of distributions under Section 4.1, each Member shall be
treated as having made the Capital Contributions and as having received the
distributions made to or received by its predecessors in respect of any of such
Member’s Units.

 

Section 4.4                                      Tax Distributions.  Subject to
the Act and to any restrictions contained in any agreement to which the Company
is bound, no later than the tenth day following the end of each Quarterly
Estimated Tax Period of each calendar year, the Company shall, to the extent of
available cash and borrowings of the Company, make a distribution in cash (each,
a “Tax Distribution”), pro rata in accordance with the Percentage Interests in
effect with respect to such Quarterly Estimated Tax Period, in an amount equal
to the excess of (i) the product of (x) the taxable income of the Company
attributable to such Quarterly Period and all prior Quarterly Periods in such
calendar year, based upon (I) the information returns filed by the Company, as
amended or adjusted to date, and (II) estimated amounts, in the case of periods
for which the Company has not yet filed information returns, multiplied by (y)
the Assumed Tax Rate, over (ii) distributions made by the Company pursuant to
this Section 4.4 with respect to such calendar year.  The Managing Member shall
use conventions similar to those adopted pursuant to Section 5.2(d) of this
Agreement to determine the Percentage Interests of the Members with respect to a
Quarterly Period.  For the avoidance of doubt, Tax Distributions shall be made
only with respect to taxable income earned by the Company (as opposed to income
recognized by any Member with respect to the vesting of such Member’s Units). 
For purposes of clause (i)(x) above, the taxable income of the Company shall be
determined by disregarding any adjustment to the taxable income of any Member
that arises under Section 743(b) of the Code and is attributable to the
acquisition by such Member of an interest in the Company in a transaction
described in Section 743(a) of the Code.

 

Section 4.5                                      Security Interest and Right of
Set Off.  As security for any liability or obligation to which the Company may
be subject as a result of any act or status of any Member, or to which the
Company may become subject with respect to the interest of any Member, the
Company shall have (and each Member hereby grants to the Company) a security
interest in all Distributable Assets distributable to such Member to the extent
of the amount of

 

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such liability or obligation.  Whenever the Company is to pay any sum to any
Member or any Affiliate or related Person thereof pursuant to the terms of this
Agreement, any amounts that such Member or such Affiliate or related Person owes
to the Company under any promissory note issued to the Company as partial
payment for any Units of the Company may be deducted from that sum before
payment.

 

Section 4.6                                      Certain Distributions.  For
purposes of this ARTICLE IV, a distribution to a Member of property (other than
cash) shall be treated as a Tax Distribution pursuant to Section 4.4 (rather
than as, for example, a distribution pursuant to Section 4.1) in an amount equal
to the hypothetical amount of tax that the Member would pay, at the Assumed Tax
Rate, if (i) such property were not treated as a distribution of money pursuant
to Section 731(c)(2) of the Code (to the extent that Section 731(c)(2) otherwise
applies) and (ii) the Member sold the property immediately after receiving such
distribution.

 

ARTICLE V
ALLOCATIONS

 

Section 5.1                                      Allocations for Capital Account
Purposes.  For purposes of maintaining the Capital Accounts and in determining
the rights of the Members among themselves, the Company’s items of income, gain,
loss and deduction (computed in accordance with Section 3.3(b)) shall be
allocated among the Members in each taxable year (or portion thereof) as
provided herein below.

 

(a)                        Net Income.  After giving effect to the special
allocations set forth in Section 5.1(e), Net Income for each taxable year (or
portion thereof) and all items of income, gain, loss and deduction taken into
account in computing Net Income for such taxable year (or portion thereof) shall
be allocated to the Members in accordance with their respective Percentage
Interests.

 

(b)                       Net Losses.  After giving effect to the special
allocations set forth in Section 5.1(e), Net Losses for each taxable year (or
portion thereof) and all items of income, gain, loss and deduction taken into
account in computing Net Losses for such taxable year (or portion thereof) shall
be allocated to the Members in accordance with their respective Percentage
Interests; provided that to the extent any allocation of Net Losses would cause
any Member to have a deficit balance in its Adjusted Capital Account at the end
of such taxable year (or increase any existing deficit balance in its Adjusted
Capital Account), such allocation of Net Loss shall be reallocated among the
other Members in accordance with their respective Percentage Interests.

 

(c)                        Allocation upon Termination.  With respect to all
Section 5.1(a) and (b) allocations following a liquidation date, such
allocations shall be made after Capital Account balances have been adjusted by
all other allocations provided under this Section 5.1 and after giving effect to
all distributions during such taxable year; provided, however, that solely for
purposes of this Section 5.1(c), Capital Accounts shall not be adjusted for
distributions made pursuant to ARTICLE VII.

 

(d)                       Allocations Relating to Last Fiscal Year. Except as
otherwise provided elsewhere in this Agreement, if upon the dissolution and
termination of the Company

 

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pursuant to Article VII and after all other allocations provided for in Section
5.1 have been tentatively made as if this Section 5.1(d) were not in this
Agreement, a distribution to the Members under Article VII would be different
from a distribution to the Members on a pro rata basis in relation to the Units
held by such Members, then all items of income, gain, deduction and loss for the
Fiscal Year in which the Company dissolves and terminates pursuant to Article
VII shall be allocated among the Members in a manner such that the Capital
Account of each Member, immediately after giving effect to such allocation, is,
as nearly as possible, equal (proportionately) to the amount of the
distributions that would be made to such Member during such last Fiscal Year on
a pro rata basis in relation to the Units held by such Member.  The Managing
Member may apply the principles of this Section 5.1(d) to any Fiscal Year
preceding the Fiscal Year in which the Company dissolves and terminates
(including through application of Section 761(e) of the Code) if delaying
application of the principles of this Section 5.1(d) would likely result in
Capital Accounts that are materially different from pro rata distributions in
relation to Units held by Members in the Fiscal Year in which the Company
dissolves and terminates.

 

(e)                        Special Allocations.  Notwithstanding any other
provision of this Section 5.1, the following special allocations shall be made
for such taxable period:

 

(i)                                     Company Minimum Gain Chargeback. 
Notwithstanding any other provision of this Section 5.1, if there is a net
decrease in Company Minimum Gain during any Company taxable period, each Member
shall be allocated items of Company income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts provided in Treasury
Regulations Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any
successor provision.  For purposes of this Section 5.1(e), each Member’s
Adjusted Capital Account balance shall be determined, and the allocation of
income and gain required hereunder shall be effected, prior to the application
of any other allocations pursuant to this Section 5.1(e) with respect to such
taxable period (other than an allocation pursuant to Section 5.1(e)(iii) and
Section 5.1(e)(vi)).  This Section 5.1(e)(i) is intended to comply with the
Company Minimum Gain chargeback requirement in Treasury Regulations Section
1.704-2(f) and shall be interpreted consistently therewith.

 

(ii)                                  Chargeback of Member Nonrecourse Debt
Minimum Gain.  Notwithstanding the other provisions of this Section 5.1 (other
than Section 5.1(e)(i)), except as provided in Treasury Regulations Section
1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum
Gain during any Company taxable period, any Member with a share of Member
Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be
allocated items of Company income and gain for such period (and, if necessary,
subsequent periods) in the manner and amounts provided in Treasury Regulations
Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For
purposes of this Section 5.1(e), each Member’s Adjusted Capital Account balance
shall be determined, and the allocation of income and gain required hereunder
shall be effected, prior to the application of any other allocations pursuant to
this Section 5.1(e), other than Section 5.1(e)(i) and other than an allocation
pursuant to Section 5.1(e)(i)(v) and (e)(i)(vi), with respect to such taxable
period.  This Section 5.1(e)(ii) is intended to comply with the chargeback of
items of income and gain requirement in Treasury Regulations Section
1.704-2(i)(4) and shall be interpreted consistently therewith.

 

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(iii)                               Qualified Income Offset.  In the event any
Member unexpectedly receives any adjustments, allocations or distributions
described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6),
items of Company income and gain shall be specially allocated to such Member in
an amount and manner sufficient to eliminate, to the extent required by the
Treasury Regulations promulgated under Section 704(b) of the Code, the deficit
balance, if any, in its Adjusted Capital Account created by such adjustments,
allocations or distributions as quickly as possible, unless such deficit balance
is otherwise eliminated pursuant to Section 5.1(e)(i) or (ii). This Section
5.1(e)(iii) is intended to qualify and be construed as a “qualified income
offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith.

 

(iv)                              Gross Income Allocations.  In the event any
Member has a deficit balance in its Capital Account at the end of any Company
taxable period in excess of the sum of (A) the amount such Member is required to
restore pursuant to the provisions of this Agreement and (B) the amount such
Member is deemed obligated to restore pursuant to Treasury Regulations Sections
1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of
Company gross income and gain in the amount of such excess as quickly as
possible; provided, that an allocation pursuant to this Section 5.1(e)(iv) shall
be made only if and to the extent that such Member would have a deficit balance
in its Capital Account as adjusted after all other allocations provided for in
this Section 5.1 have been tentatively made as if this Section 5.1(e)(iv) were
not in this Agreement.

 

(v)                                 Nonrecourse Deductions.  Nonrecourse
Deductions for any taxable period shall be allocated to the Members in
accordance with their respective Percentage Interests.  If the Managing Member
determines that the Company’s Nonrecourse Deductions should be allocated in a
different ratio to satisfy the safe harbor requirements of the Treasury
Regulations promulgated under Section 704(b) of the Code, the Managing Member is
authorized, upon notice to the other Members, to revise the prescribed ratio to
the numerically closest ratio that does satisfy such requirements.

 

(vi)                              Member Nonrecourse Deductions.  Member
Nonrecourse Deductions for any taxable period shall be allocated 100% to the
Member that bears the “Economic Risk of Loss” (as defined in the Treasury
Regulations) with respect to the Member Nonrecourse Debt to which such Member
Nonrecourse Deductions are attributable in accordance with Treasury Regulations
Section 1.704-2(i).  If more than one Member bears the Economic Risk of Loss
with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions
attributable thereto shall be allocated between or among such Members in
accordance with the ratios in which they share such Economic Risk of Loss.

 

(vii)                           Nonrecourse Liabilities.  Nonrecourse
Liabilities of the Company described in Treasury Regulations Section
1.752-3(a)(3) shall be allocated among the Members in the manner chosen by the
Managing Member and consistent with such Section of the Treasury Regulations.

 

(viii)                        Code Section 754 Adjustments.  To the extent an
adjustment to the adjusted tax basis of any Company asset pursuant to Section
734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m), to be

 

27

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taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Members in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Treasury Regulations.

 

(ix)                                Curative Allocation.

 

(1)                      The Required Allocations are intended to comply with
certain requirements of the Treasury Regulations. It is the intent of the
Members that, to the extent possible, all Required Allocations shall be offset
either with other Required Allocations or with special allocations of other
items of Company income, gain, loss or deduction pursuant to this Section
5.1(e)(ix)(i). Therefore, notwithstanding any other provision of this ARTICLE V
(other than the Required Allocations), the Managing Member shall make such
offsetting special allocations of Company income, gain, loss or deduction in
whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Member’s Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Member would have had if the
Required Allocations were not part of this Agreement and all Company items were
allocated pursuant to the economic agreement among the Members.

 

(2)                      The Managing Member shall, with respect to each taxable
period, (1) apply the provisions of Section 5.1(e)(ix)(1) in whatever order is
most likely to minimize the economic distortions that might otherwise result
from the Required Allocations, and (2) divide all allocations pursuant to
Section 5.1(e)(ix)(1) among the Members in a manner that is likely to minimize
such economic distortions.

 

(x)                                   Deficit Capital Accounts.  No Member shall
be required to pay to the Company, to any other Member or to any third party any
deficit balance which may exist from time to time in the Member’s Capital
Account.

 

Section 5.2                                      Allocations for Tax Purposes.

 

(a)                        The income, gains, losses and deductions of the
Company shall be allocated for federal, state and local income tax purposes
among the Members in accordance with the allocation of such income, gains,
losses and deductions among the Members for purposes of computing their Capital
Accounts; except that if any such allocation is not permitted by the Code or
other applicable law, then the Company’s subsequent income, gains, losses and
deductions for tax purposes shall be allocated among the Members so as to
reflect as nearly as possible the allocation set forth herein in computing their
Capital Accounts.

 

(b)                       In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or an Adjusted Property, items of income,
gain, loss, depreciation, amortization and cost recovery deductions shall be
allocated for federal income tax purposes among the Members as follows:

 

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(i)                                     (A)  In the case of a Contributed
Property, such items attributable thereto shall be allocated among the Members
in the manner provided under Section 704(c) of the Code that takes into account
the variation between the Agreed Value of such property and its adjusted basis
at the time of contribution; and (B) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be allocated among the Members in
the same manner as its correlative item of “book” gain or loss is allocated
pursuant to Section 5.1.

 

(ii)                                  (A)  In the case of an Adjusted Property,
such items shall (1) first, be allocated among the Members in a manner
consistent with the principles of Section 704(c) of the Code to take into
account the Unrealized Gain or Unrealized Loss attributable to such property and
the allocations thereof pursuant to Section 3.3(d)(i) or Section 3.3(d)(ii), and
(2) second, in the event such property was originally a Contributed Property, be
allocated among the Members in a manner consistent with Section 5.2(b)(i)(A);
and (B) any item of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Members in the same manner as its
correlative item of “book” gain or loss is allocated pursuant to Section 5.1.

 

(iii)                               In order to eliminate Book-Tax Disparities,
the Managing Member shall apply (i) the “remedial method” with respect to the
“forward” Section 704(c) allocations arising as of September 30, 2005, (ii) the
“traditional method” with respect to the Section 704(c) allocations relating
both to the property deemed to be contributed to the Company and the associated
“reverse” Section 704(c) allocations as of October 10, 2006, and (iii) the
“traditional method” with respect to the “reverse” Section 704(c) allocations
arising as of the date of the IPO.  In cases not described in the preceding
sentence the Managing Member may cause the Company to eliminate Book-Tax
Disparities using any method described in Treasury Regulations Section 1.704-3.

 

(c)                        For the proper administration of the Company and for
the preservation of uniformity of the Units (or any class or classes thereof),
the Managing Member shall (i) adopt such conventions as it deems appropriate in
determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations for federal income tax purposes of
income (including, without limitation, gross income) or deductions; (iii) amend
the provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of the Units (or any
class or classes thereof); and (iv) adopt and employ such methods for (A) the
maintenance of capital accounts for book and tax purposes, (B) the determination
and allocation of adjustments under Sections 704(c), 734 and 743 of the Code,
(C) the determination and allocation of taxable income, tax loss and items
thereof under this Agreement and pursuant to the Code, (D) the determination of
the identities and tax classification of Members, (E) the provision of tax
information and reports to the Members, (F) the adoption of reasonable
conventions and methods for the valuation of assets and the determination of tax
basis, (G) the allocation of asset values and tax basis, (H) the adoption and
maintenance of accounting methods, (I) the recognition of the transfer of Units
and (J) tax compliance and other tax-related requirements, including without
limitation, the use of computer software, as it determines in its sole
discretion are necessary and appropriate to execute the provisions of this
Agreement and to comply with federal, state and local tax law, and to achieve
uniformity of Units within a class. The Managing Member may adopt such
conventions, make

 

29

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such allocations and make such amendments to this Agreement as provided in this
Section 5.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Members, the holders of any class or
classes of Units issued and outstanding or the Company, and if such allocations
are consistent with the principles of Section 704 of the Code.

 

(d)                       For purposes of determining the items of Company
income, gain, loss, deduction, or credit allocable to any Member with respect to
any period, such items shall be determined on a daily, monthly, or other basis,
as determined by the Managing Member using any permissible method under Code
Section 706 and the Treasury Regulations promulgated thereunder.

 

(e)                        Tax credits, tax credit recapture and any items
related thereto shall be allocated to the Members according to their interests
in such items as reasonably determined by the Managing Member taking into
account the principles of Treasury Regulations Sections 1.704-1(b)(4)(ii) and
1.704-1T(b)(4)(xi).

 

(f)                          Allocations pursuant to this Section 5.2 are solely
for the purposes of federal, state and local taxes and shall not affect, or in
any way be taken into account in computing, any Member’s Capital Account or
share of Income, Loss, distributions or other Company items pursuant to any
provision of this Agreement.

 

Section 5.3                                      Members’ Tax Reporting.  The
Members acknowledge and are aware of the income tax consequences of the
allocations made pursuant to this ARTICLE V and, except as may otherwise be
required by applicable law or regulatory requirements, hereby agree to be bound
by the provisions of this ARTICLE V in reporting their shares of Company income,
gain, loss, deduction and credit for federal, state and local income tax
purposes.

 

Section 5.4                                      Indemnification and
Reimbursement for Payments on Behalf of a Member.  If the Company is required by
law to make any payment to a Governmental Entity that is specifically
attributable to a Member or a Member’s status as such (including federal
withholding taxes, state or local personal property taxes and state or local
unincorporated business taxes), then such Member shall indemnify the Company in
full for the entire amount paid (including interest, penalties and related
expenses).  The Managing Member may offset distributions to which a Person is
otherwise entitled under this Agreement against such Person’s obligation to
indemnify the Company under this Section 5.4.  A Member’s obligation to
indemnify the Company under this Section 5.4 shall survive termination,
dissolution, liquidation and winding up of the Company, and for purposes of this
Section 5.4, the Company shall be treated as continuing in existence.  The
Company may pursue and enforce all rights and remedies it may have against each
Member under this Section 5.4, including instituting a lawsuit to collect such
indemnification, with interest calculated at a rate equal to 10 percent (but not
in excess of the highest rate per annum permitted by law).

 

Section 5.5                                      Certain Costs and Expenses. 
The Company shall (i) pay, or cause to be paid, all costs, fees, operating
expenses and other expenses of the Company (including the costs, fees and
expenses of attorneys, accountants or other professionals and the compensation
of all personnel providing services to the Company) incurred in pursuing and
conducting, or otherwise related to, the activities of the Company, and (ii) in
the sole discretion of the Managing

 

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Member, reimburse the Managing Member for any out-of-pocket costs, fees and
expenses incurred by it in connection therewith.  To the extent that the
Managing Member reasonably determines in good faith that such expenses are
related to the business and affairs of the Managing Member that are conducted
through the Company and/or its subsidiaries (including any good faith allocation
of a portion of expenses that so relate to the business and affairs of the
Company and/or its subsidiaries and that also relate to other activities of the
Managing Member, then the Managing Member may cause the Company to pay or bear
all expenses of the Managing Member, including, without suggesting any
limitation of any kind, costs of securities offerings not borne directly by
Members, Board of Directors compensation and meeting costs, cost of periodic
reports to its stockholders, litigation costs and damages arising from
litigation, accounting and legal costs and franchise taxes, provided that the
Company shall not pay or bear any income tax obligations of the Managing Member.

 

ARTICLE VI
MANAGEMENT

 

Section 6.1                                      The Managing Member; Delegation
of Authority and Duties.

 

(a)                        Members and Managing Member.

 

(i)                                     In connection with the performance of
its duties as the managing member of the Company, the Managing Member
acknowledges that it will owe to the Members the same fiduciary duties as it
would owe to the stockholders of a Delaware corporation if it were a member of
the board of directors of such a corporation and the Members were stockholders
of such corporation.  The parties acknowledge that the Managing Member will take
action through its board of directors, and that the members of the Managing
Member’s board of directors will owe comparable fiduciary duties to the
stockholders of the Managing Member.  The Managing Member will use all
commercially reasonable and appropriate efforts and means, as determined in good
faith by the Managing Member, to minimize any conflicts of interest between the
Members and the stockholders of the Managing Member and to effectuate any
transaction that involves or affects any of the Company, the Managing Member,
the Members and/or the stockholders of the Managing Member in a manner that does
not (i) disadvantage the Members or their interests relative to the stockholders
of the Managing Member, or (ii) advantage the stockholders of the Managing
Member relative to the Members, or (iii) treats the Members and the Stockholders
of the Managing Member differently.

 

(ii)                                  The Members shall possess all rights and
powers as provided in the Act and otherwise by applicable law.  Except as
otherwise expressly provided for herein, the Members hereby consent to the
exercise by the Managing Member of all such powers and rights conferred on them
by the Act with respect to the management and control of the Company. 
Notwithstanding the foregoing and except as explicitly set forth in this
Agreement, if a vote, consent or approval of the Members is required by the Act
or other applicable law with respect to any act to be taken by the Company or
matter considered by the Managing Member, each Member agrees that it shall be
deemed to have consented to or approved such act or voted on such matter in
accordance with the actions of the Managing Member on such act or matter.  If a
vote, consent or approval of the Members is required by this Agreement, then
each such Member shall have one vote for each Unit held by such Member,
regardless of whether the Units

 

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held by such Member are vested or unvested as of the date of such vote, consent
or approval.  In no manner limiting the foregoing, the Members acknowledge that
no Member shall be permitted to vote on the removal or replacement of the
Managing Member.  Additionally, and in no manner limiting the foregoing, the
Managing Member shall submit to a vote of the Members, and shall not take any
action inconsistent with the outcome of such vote, (i) any action by the
Managing Member or the Company that, in the good faith judgment of the Managing
Member, could negatively impact the amount of future distributions or (ii) any
issuance of, or amendment to the rights in respect of, Units the terms of which
include a right to distributions senior to that of any then-existing Member.  To
the extent that any of the matters to be voted on, consented to or approved by
the Members as described above or otherwise in this Agreement will have the
effect that gives rise to the need for such vote, consent or approval on only
one class of Units or only certain holders of a particular class of Units, then
the vote, consent or approval required by this Agreement shall be taken among
only the holders of such class or among the holders of the particular class that
are so affected, in which case the action shall require a majority of the voting
power of the Units affected.  Unless otherwise set forth in this Agreement, any
vote, consent or approval of the Members required by this Agreement shall
require a majority of the voting power of the Units (or class of Units, as
applicable).  No Member, in its capacity as a Member, shall have any power to
act for, sign for or do any act that would bind the Company.  Each Member
acknowledges and agrees that no Member shall, in its capacity as a Member, be
bound to devote all of such Member’s business time to the affairs of the
Company, and that each Member and such Member’s Affiliates do and will continue
to engage for such Member’s own account and for the account of others in other
business ventures.

 

(b)                       Delegation by Managing Member.  The Managing Member
shall have the power and authority to delegate to one or more other Persons the
Managing Member’s rights and powers to manage and control the business and
affairs of the Company, including to delegate to agents and employees of a
Member or the Company (including Officers), and to delegate by a management
agreement or another agreement with, or otherwise to, other Persons.  The
Managing Member may authorize any Person (including any Member or Officer) to
enter into and perform any document on behalf of the Company.

 

(c)                        The Members expressly acknowledge that (A) Vestar,
Lovell Minnick and their respective Affiliates are permitted to have, and may
presently or in the future have, investments or other business relationships
with entities other than through the Company or any of its Subsidiaries (each, a
“Permitted Business”), (B) Vestar, Lovell Minnick and their respective
Affiliates may have or may develop a strategic relationship with Permitted
Businesses, (C) none of Vestar, Lovell Minnick and their respective Affiliates
will be prohibited by virtue of its investment in the Company or any of its
Subsidiaries or, if applicable, its service on the Managing Member from pursuing
and engaging in any such activities with Permitted Businesses, (D) none of
Vestar, Lovell Minnick and their respective Affiliates shall be obligated to
inform the Company or any of its Subsidiaries of any such opportunity,
relationship or investment relating to Permitted Businesses, (E) the other
Members will not acquire or be entitled to any interest or participation in any
Permitted Business as a result of the participation therein of Vestar, Lovell
Minnick or any of their respective Affiliates, and (F) the involvement of any
equityholder of a Member or its Affiliates in any Permitted Business will not
constitute a conflict of interest by such Persons with respect to the Company or
its Members or any of its Subsidiaries.

 

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(d)                       The Managing Member shall have the power and authority
to effectuate the sale, lease, transfer, exchange or other disposition of any,
all or substantially all of the assets of the Company (including, but not
limited to, the exercise or grant of any conversion, option, privilege or
subscription right or any other right available in connection with any assets at
any time held by the Company) or the merger, consolidation, reorganization or
other combination of the Company with or into another entity.

 

Section 6.2                                      Officers.

 

(a)                        Designation and Appointment.  The Managing Member
may, from time to time, employ and retain Persons as may be necessary or
appropriate for the conduct of the Company’s business, including employees,
agents and other Persons (any of whom may be a Member) who may be designated as
Officers of the Company, with such titles as and to the extent authorized by the
Managing Member.  Any number of offices may be held by the same Person.  In its
discretion, the Managing Member may choose not to fill any office for any period
as it may deem advisable.  Officers need not be residents of the State of
Delaware or Members.  Any Officers so designated shall have such authority and
perform such duties as the Managing Member may from time to time delegate to
them.  The Managing Member may assign titles to particular Officers.  Each
Officer shall hold office until his successor shall be duly designated and shall
qualify or until his death or until he shall resign or shall have been removed
in the manner hereinafter provided.  The salaries or other compensation, if any,
of the Officers of the Company shall be fixed from time to time by the Managing
Member.

 

(b)                       Resignation and Removal.  Any Officer may resign as
such at any time.  Such resignation shall be made in writing and shall take
effect at the time specified therein, or if no time is specified, at the time of
its receipt by the Managing Member.  The acceptance of a resignation shall not
be necessary to make it effective, unless expressly so provided in the
resignation.  Any Officer may be removed as such, either with or without cause
at any time by the Managing Member.  Designation of an Officer shall not of
itself create any contractual or employment rights.

 

Section 6.3                                      Duties of Officers.  The
Officers, in the performance of their duties as such, shall owe to the Company
duties of loyalty and due care of the type owed by officers of a Delaware
corporation pursuant to the laws of the state of Delaware.

 

(a)                        Transfer of Property.  All property owned by the
Company shall be registered in the Company’s name, in the name of a nominee or
in “street name” as the Managing Member may from time to time determine.  Any
corporation, brokerage firm or transfer agent called upon to Transfer any
Securities to or from the name of the Company shall be entitled to rely on
instructions or assignments signed or purported to be signed by any Officer
without inquiry as to the authority of the Person signing or purporting to sign
such instructions or assignments or as to the validity of any Transfer to or
from the name of the Company.  At the time of any such Transfer, any such
corporation, brokerage firm or transfer agent shall be entitled to assume that
(i) the Company is then in existence and (ii) that this Agreement is in full
force and effect and has not been amended, in each case, unless such
corporation, brokerage firm or transfer agent shall have received written notice
to the contrary.

 

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(b)                       Existence and Good Standing.  The Managing Member may
take all action which may be necessary or appropriate (i) for the continuation
of the Company’s valid existence as a limited liability company under the laws
of the State of Delaware (and of each other jurisdiction in which such existence
is necessary to enable the Company to conduct the business in which it is
engaged) and (ii) for the maintenance, preservation and operation of the
business of the Company in accordance with the provisions of this Agreement and
applicable laws and regulations.  The Managing Member may file or cause to be
filed for recordation in the office of the appropriate authorities of the State
of Delaware, and in the proper office or offices in each other jurisdiction in
which the Company is formed or qualified, such certificates (including
certificates of limited liability companies and fictitious name certificates)
and other documents as are required by the applicable statutes, rules or
regulations of any such jurisdiction or as are required to reflect the identity
of the Members and the amounts of their respective capital contributions.

 

(c)                        Investment Company Act.  The Managing Member shall
use its best efforts to assure that the Company shall not be subject to
registration as an investment company pursuant to the Investment Company Act of
1940, as amended.

 

Section 6.4                                      Liability of Members.

 

(a)                        No Personal Liability.  Except as otherwise required
by applicable law and as expressly set forth in this Agreement, no Member shall
have any personal liability whatsoever in such Person’s capacity as a Member,
whether to the Company, to any of the other Members, to the creditors of the
Company or to any other third party, for the debts, liabilities, commitments or
any other obligations of the Company or for any losses of the Company.  Each
Member shall be liable only to make such Member’s Capital Contribution to the
Company, if applicable, and the other payments provided for expressly herein.

 

(b)                       Return of Distributions.  In accordance with the Act
and the laws of the State of Delaware, a member of a limited liability company
may, under certain circumstances, be required to return amounts previously
distributed to such member.  It is the intent of the Members that no
distribution to any Member pursuant to ARTICLE IV shall be deemed a return of
money or other property paid or distributed in violation of the Act.  The
payment of any such money or distribution of any such property to a Member shall
be deemed to be a compromise within the meaning of the Act, and the Member
receiving any such money or property shall not be required to return to any
Person any such money or property.  However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any
Member is obligated to make any such payment, such obligation shall be the
obligation of such Member and not of any other Member.

 

Section 6.5                                      Indemnification by the
Company.  Subject to the limitations and conditions provided in this Section
6.5, each Person who was or is made a party or is threatened to be made a party
to or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or arbitrative (each, a
“Proceeding”), or any appeal in such a Proceeding or any inquiry or
investigation that could lead to such a Proceeding, by reason of the fact that
he, she or it, or a Person of which he, she or it is the legal representative,
is or was a Member or an Officer, in each case, shall be indemnified

 

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by the Company to the fullest extent permitted by applicable law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide broader
indemnification rights than such law permitted the Company to provide prior to
such amendment) against all judgments, penalties (including excise and similar
taxes and punitive damages), fines, settlements and reasonable expenses
(including reasonable attorneys’ fees and expenses) actually incurred by such
Person in connection with such Proceeding, appeal, inquiry or investigation, if
such Person acted in Good Faith.  Reasonable expenses incurred by a Person of
the type entitled to be indemnified under this Section 6.5 who was, is or is
threatened to be made a named defendant or respondent in a Proceeding shall be
paid by the Company in advance of the final disposition of the Proceeding upon
receipt of an undertaking by or on behalf of such Person to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the Company.  Indemnification under this Section 6.5 shall
continue as to a Person who has ceased to serve in the capacity which initially
entitled such Person to indemnity hereunder.  The rights granted pursuant to
this Section 6.5 shall be deemed contract rights, and no amendment, modification
or repeal of this Section 6.5 shall have the effect of limiting or denying any
such rights with respect to actions taken or Proceedings, appeals, inquiries or
investigations arising prior to any amendment, modification or repeal.  It is
expressly acknowledged that the indemnification provided in this Section 6.5
could involve indemnification for negligence or under theories of strict
liability.

 

Section 6.6                                      Investment Representations of
Members.  Each Member hereby represents, warrants and acknowledges to the
Company that: (a) such Member has such knowledge and experience in financial and
business matters and is capable of evaluating the merits and risks of an
investment in the Company and is making an informed investment decision with
respect thereto; (b) such Member is acquiring interests in the Company for
investment only and not with a view to, or for resale in connection with, any
distribution to the public or public offering thereof; and (c) the execution,
delivery and performance of this Agreement have been duly authorized by such
Member.

 

ARTICLE VII
WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS; ADMISSION OF NEW
MEMBERS

 

Section 7.1                                      Member Withdrawal.  No Member
shall have the power or right to withdraw or otherwise resign or be expelled
from the Company prior to the dissolution and winding up of the Company except
pursuant to a Transfer permitted under this Agreement.

 

Section 7.2                                      Continuation of Vesting.
 Notwithstanding anything in this Agreement to the contrary, (i) the New Class A
Units held by any Member as a result of the conversion of Units held under the
Second Amended Agreement or as a result of the DPH Merger (in each case, the
“converted units”) shall continue to be subject to any vesting provisions or
forfeiture provisions to which those converted units were subject in the
applicable grant agreement or other agreement pursuant to which such converted
units were issued, adjusted as provided in any such agreement, in relation to
the transactions relating to the conversion or DPH Merger, as the case may be;
and (ii) no Member may Transfer any unvested Units.

 

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Section 7.3                                      Dissolution.

 

(a)                        Events.  The Company shall be dissolved and its
affairs shall be wound up on the first to occur of (i) the determination of the
Managing Member, or (ii) the entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Act.  In the event of a dissolution pursuant
to clause (i) of the immediately preceding sentence, the relative economic
rights of each class of Units immediately prior to such dissolution shall be
preserved to the greatest extent practicable with respect to distributions made
to Members pursuant to Section 7.3(c) below in connection with such dissolution,
taking into consideration tax and other legal constraints that may adversely
affect one or more parties to such dissolution and subject to compliance with
applicable laws and regulations, unless, with respect to any class of Units,
holders of a majority of the Units of such class consent in writing to a
treatment other than as described above.

 

(b)                       Actions Upon Dissolution.  When the Company is
dissolved, the business and property of the Company shall be wound up and
liquidated by the Managing Member or, in the event of the unavailability of the
Managing Member or if the Managing Member shall so determine, such Member or
other liquidating trustee as shall be named by the Managing Member.

 

(c)                        Priority.  A reasonable time shall be allowed for the
orderly winding up of the business and affairs of the Company and the
liquidation of its assets pursuant to Section 7.3 to minimize any losses
otherwise attendant upon such winding up.  Notwithstanding the generality of the
foregoing, 180 calendar days after the effective date of dissolution of the
Company, the assets of the Company shall be distributed in the following manner
and order: (i) all debts and obligations of the Company, if any, shall first be
paid, discharged or provided for by adequate reserves; and (ii) the balance
shall be distributed to the Members in accordance with their Capital Account
balances, as adjusted for all Company operations up to and including the date of
distribution.

 

(d)                       Cancellation of Certificate.  On completion of the
distribution of Company assets as provided herein, the Company is terminated,
and shall file a certificate of cancellation with the Secretary of State of the
State of Delaware, cancel any other filings made and take such other actions as
may be necessary to terminate the Company.

 

(e)                        Return of Capital.  The liquidators shall not be
personally liable for the return of Capital Contributions or any portion thereof
to the Members (it being understood that any such return shall be made solely
from Company assets).

 

(f)                          Hart Scott Rodino.  Notwithstanding any other
provision in this Agreement, in the event the Hart Scott Rodino Antitrust
Improvements Act of l976, as amended (the “HSR Act”), is applicable to any
Member by reason of the fact that any assets of the Company will be distributed
to such Member in connection with the dissolution of the Company, the
dissolution of the Company shall not be consummated until such time as the
applicable waiting periods (and extensions thereof) under the HSR Act have
expired or otherwise been terminated with respect to each such Member.

 

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Section 7.4                                      Transfer by Members.  No Member
may Transfer or Pledge all or any portion of its Units except with the written
consent of the Managing Member in its sole discretion, provided, however, that,
subject to the provisions of Section 7.5(c), without the consent of the Managing
Member, a Member may, at any time, (i) Transfer any of such Member’s Units
pursuant to the Exchange Agreement, (ii) Transfer any of such Member’s Units to
a Permitted Transferee of such Member, and, provided further, that, to the
extent that the Managing Member determines in good faith that a proposed
transfer would not have the effect contemplated by Section 7.5(c) below, then
the Managing Member will not unreasonably withhold its consent to a transfer by
any Member who holds at least 10% of the Class A Units not held by the Managing
Member and who intends, in connection with such proposed transfer, to transfer
all or substantially all of the Class A Units then held by such Persons to any
Person or group of Persons acting together that would constitute a "group" for
purposes of Section 13(d) of the Securities and Exchange Act of 1934 or any
successor provisions thereto. Any purported Transfer or Pledge of all or a
portion of a Member’s Units not complying with this Section 7.4 shall be void
and shall not create any obligation on the part of the Company or the other
Members to recognize that Transfer or Pledge or to deal with the Person to which
the Transfer or Pledge purportedly was made.

 

Section 7.5                                      Admission or Substitution of
New Members.

 

(a)                        Admission.  The Managing Member shall have the right,
subject to Section 7.4, to admit as a Substituted Member or an Additional
Member, any Person who acquires an interest in the Company, or any part thereof,
from a Member or from the Company.  Concurrently with the admission of a
Substituted Member or an Additional Member, the Managing Member shall forthwith
(i) amend the Schedule of Members to reflect the name and address of such
Substituted Member or Additional Member and to eliminate or modify, as
applicable, the name and address of the Transferring Member with regard to the
Transferred Units and (ii) cause any necessary papers to be filed and recorded
and notice to be given wherever and to the extent required showing the
substitution of a Transferee as a Substituted Member in place of the
Transferring Member, or the admission of an Additional Member, in each case, at
the expense, including payment of any professional and filing fees incurred, of
such Substituted Member or Additional Member; provided that such expenses shall
not be payable with respect to a Substituted Member or Additional Member that is
or is to become an employee of the Company or any of its Subsidiaries, where the
issuance or Transfer of an interest in the Company to such Person is in
connection with their provision of services to the Company or any of its
Subsidiaries.

 

(b)                       Conditions and Limitations.  The admission of any
Person as a Substituted Member or an Additional Member shall be conditioned upon
(i) such Person’s written acceptance and adoption of all the terms and
provisions of this Agreement, either by (A) execution and delivery of a
counterpart signature page to this Agreement countersigned by the Managing
Member on behalf of the Company or (B) any other writing evidencing the intent
of such Person to become a Substituted Member or an Additional Member and such
writing is accepted by the Managing Member on behalf of the Company.

 

(c)                        Prohibited Transfers.  Transfers subject to the
provisions of the Exchange Agreement excepted, no Transfer of a Unit shall be
permitted (and, if attempted, shall be void ab initio) if, in the determination
of the Managing Member, (i) such a Transfer would

 

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pose a material risk that the Company would be a “publicly traded partnership”
as defined in Section 7704 of the Code.

 

(d)                       Effect of Transfer to Substituted Member.  Following
the Transfer of any Unit that is permitted under this Section 7.5, the
Transferee of such Unit shall be treated as having made all of the Capital
Contributions in respect of, and received all of the distributions received in
respect of, such Unit, shall succeed to the Capital Account balance associated
with such Unit, shall receive allocations and distributions under ARTICLE IV,
ARTICLE V and Section 7.2 in respect of such Unit and otherwise shall become a
Substituted Member entitled to all the rights of a Member with respect to such
Unit.

 

Section 7.6                                      Compliance with Law. 
Notwithstanding any other provision hereof to the contrary, no sale or other
disposition of an interest in the Company may be made except in compliance with
all federal, state and other applicable laws, including federal and state
securities laws.

 

ARTICLE VIII
BOOKS AND RECORDS; FINANCIAL STATEMENTS AND OTHER INFORMATION; TAX MATTERS

 

Section 8.1                                      Books and Records; Management
Interviews.

 

(a)                        Books and Records.  The Company shall keep at its
principal executive office (i) correct and complete books and records of account
(which, in the case of financial records, shall be kept in accordance with
GAAP), (ii) minutes of the proceedings of meetings of the Members, (iii) a
current list of the directors and officers of the Company and its Subsidiaries
and their respective residence addresses, and (iv) a record containing the names
and addresses of all Members, the total number of Units held by each Member, and
the dates when they respectively became the owners of record thereof.  Any of
the foregoing books, minutes or records may be in written form or in any other
form capable of being converted into written form within a reasonable time.

 

(b)                       Inspection of Property.  The Company shall permit any
Member that owns at least five percent (5%) of all of the Company’s outstanding
Units, upon reasonable notice and during normal business hours and at such other
times as such Persons may reasonably request, but in no event more frequently
than once in each Fiscal Quarter, for any purpose reasonably related to such
Member’s interest as a member of the Company, to (i) visit and inspect any of
the properties of the Company and its Subsidiaries, (ii) examine any books,
minutes and records of the Company and its Subsidiaries (including business and
financial records) and make copies thereof or extracts therefrom, and (iii)
discuss the affairs, finances and accounts of the Company or any of its
Subsidiaries with the directors, officers, key employees and independent
accountants of the Company and its Subsidiaries, in each case, under such
conditions and restrictions (including a confidentiality undertaking or
agreement) as the Managing Member may reasonably prescribe.

 

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Section 8.2                                      Information.

 

(a)                        The Members shall be supplied with all other Company
information necessary to enable each Member to prepare its federal, state, and
local income tax returns.

 

(b)                       All determinations, valuations and other matters of
judgment required to be made for ordinary course accounting purposes under this
Agreement shall be made by the Managing Member and shall be conclusive and
binding on all Members, their Successors in Interest and any other Person, and
to the fullest extent permitted by law or as otherwise provided in this
Agreement, no such Person shall have the right to an accounting or an appraisal
of the assets of the Company or any successor thereto.

 

Section 8.3                                      Fiscal Year; Taxable Year. 
Each of the Fiscal Year and the taxable year of the Company shall end on
December 31 of each calendar year; provided that the taxable year of the Company
shall end on a different date if necessary to comply with Section 706 of the
Code.

 

Section 8.4                                      Certain Tax Matters.

 

(a)                        Preparation of Returns.  The Managing Member shall
cause to be prepared all federal, state and local tax returns of the Company for
each year for which such returns are required to be filed and shall cause such
returns to be timely filed.  The Managing Member shall determine the appropriate
treatment of each item of income, gain, loss, deduction and credit of the
Company and the accounting methods and conventions under the tax laws of the
United States of America, the several states and other relevant jurisdictions as
to the treatment of any such item or any other method or procedure related to
the preparation of such tax returns.  Except as specifically provided otherwise
in this Agreement, the Managing Member may cause the Company to make or refrain
from making any and all elections permitted by such tax laws.  As promptly as
practicable after the end of each Fiscal Year, the Managing Member shall cause
the Company to provide to each Member a Schedule K-1 for such Fiscal Year. 
Additionally, the Managing Member shall cause the Company to provide to each
Member, to the extent commercially reasonable and available to the Company
without undue cost, any information reasonably required by the Member to
prepare, or in connection with an audit of, such Member’s income tax returns.

 

(b)                       Consistent Treatment.  Each Member agrees that it
shall not, except as otherwise required by applicable law or regulatory
requirements, (i) treat, on its individual income tax returns, any item of
income, gain, loss, deduction or credit relating to its interest in the Company
in a manner inconsistent with the treatment of such item by the Company as
reflected on the Form K-1 or other information statement furnished by the
Company to such Member for use in preparing its income tax returns or (ii) file
any claim for refund relating to any such item based on, or which would result
in, such inconsistent treatment.

 

(c)                        Duties of the Tax Matters Member.  In respect of an
income tax audit of any tax return of the Company, the filing of any amended
return or claim for refund in connection with any item of income, gain, loss,
deduction or credit reflected on any tax return of the Company, or any
administrative or judicial proceedings arising out of or in connection with any
such audit, amended return, claim for refund or denial of such claim, (A) the
Managing Member shall direct the Tax Matters Member to act for, and such action
shall be final and

 

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binding upon, the Company and all Members except to the extent a Member shall
properly elect to be excluded from such proceeding pursuant to the Code, (B) all
expenses incurred by the Tax Matters Member in connection therewith (including
attorneys’, accountants’ and other experts’ fees and disbursements) shall be
expenses of, and payable by, the Company, (C) no Member shall have the right to
(1) participate in the audit of any Company tax return, (2) file any amended
return or claim for refund in connection with any item of income, gain, loss,
deduction or credit (other than items which are not partnership items within the
meaning of Code Section 6231(a)(4) or which cease to be partnership items under
Code Section 6231(b)) reflected on any tax return of the Company, (3)
participate in any administrative or judicial proceedings conducted by the
Company or the Tax Matters Member arising out of or in connection with any such
audit, amended return, claim for refund or denial of such claim, or (4) appeal,
challenge or otherwise protest any adverse findings in any such audit conducted
by the Company or the Tax Matters Member or with respect to any such amended
return or claim for refund filed by the Company or the Tax Matters Member or in
any such administrative or judicial proceedings conducted by the Company or the
Tax Matters Member and (D) the Tax Matters Member shall keep the Members
reasonably apprised of the status of any such proceeding.  Notwithstanding the
previous sentence, if a petition for a readjustment to any partnership item
included in a final partnership administrative adjustment is filed with a
District Court or the Court of Claims and the IRS has elected to assess income
tax against a Member with respect to that final partnership administrative
adjustment (rather than suspending assessments until the District Court or Court
of Claims proceedings become final), such Member shall be permitted to file a
claim for refund within such period of time as to avoid application of any
statute of limitations which would otherwise prevent the Member from having any
claim based on the final outcome of that review.

 

(d)                       Tax Matters Member.  The Company and each Member
hereby designate Pubco as the “tax matters partner” for purposes of Code Section
6231(a)(7) (the “Tax Matters Member”).  The Managing Member may remove or
replace the Tax Matters Member at any time and from time to time.

 

(e)                        Certain Filings.  Upon the Transfer of an interest in
the Company (within the meaning of the Code), a sale of Company assets or a
liquidation of the Company, the Members shall provide the Managing Member with
information and shall make tax filings as reasonably requested by the Managing
Member and required under applicable law.

 

(f)                          Section 754 Election. The Managing Member shall
cause the Company to make and to maintain and keep in effect at all times, in
accordance with Sections 734, 743, and 754 of the Code and applicable Treasury
Regulations and comparable state law provisions, an election to adjust basis in
the event (i) any New Class A Unit is transferred in accordance with this
Agreement or the Exchange Agreement or (ii) any Company property is distributed
to any Member.

 

ARTICLE IX
MISCELLANEOUS

 

Section 9.1                                      Schedules.  Without in any way
limiting the provisions of Sections 8.2 and 9.4, the Managing Member may from
time to time execute on behalf of the Company and deliver to the Members
schedules that set forth the then current Capital Account balances of

 

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each Member and any other matters deemed appropriate by the Managing Member or
required by applicable law.  Such schedules shall be for information purposes
only and shall not be deemed to be part of this Agreement for any purpose
whatsoever.

 

Section 9.2                                      Governing Law.  THIS AGREEMENT
IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
DELAWARE, EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE
GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER
JURISDICTION.  In the event of a direct conflict between the provisions of this
Agreement and any provision of the Certificate or any mandatory provision of the
Act, the applicable provision of the Certificate or the Act shall control.

 

Section 9.3                                      Successors and Assigns.  This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective Successors in Interest; provided that no Person
claiming by, through or under a Member (whether as such Member’s Successor in
Interest or otherwise), as distinct from such Member itself, shall have any
rights as, or in respect to, a Member (including the right to approve or vote on
any matter or to notice thereof).

 

Section 9.4                                      Amendments.  Except as may be
otherwise required by law, this Agreement may be amended by the Managing Member
without the consent or approval of any Members; provided, however, that except
as expressly provided herein (including Section 3.3(e)), (i) no amendment may
adversely affect the rights of a holder of Units without the consent of such
holder if such amendment adversely affects the rights of such holder other than
on a pro rata basis with other holders of Units of the same class.

 

Section 9.5                                      Notices.  Whenever notice is
required or permitted by this Agreement to be given, such notice shall be in
writing and shall be given to any Member at such Member’s address or facsimile
number shown in the Company’s books and records, or, if given to the Company, at
the following address:

 

Duff & Phelps Acquisitions, LLC
55 East 52nd Street
New York, NY  10055
Attention: General Counsel
Facsimile: (212) 450-2801

 

with copies (which shall not constitute notice to the Company) 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.

Each proper notice shall be effective upon any of the following: (a) personal
delivery to the recipient, (b) when sent by facsimile to the recipient (with
confirmation of receipt), (c) one Business Day after being sent to the recipient
by reputable overnight courier service (charges prepaid) or (d) three Business
Days after being deposited in the mails (first class or airmail postage
prepaid).

 

Section 9.6                                      Counterparts.  This Agreement
may be executed simultaneously in two or more separate counterparts, any one of
which need not contain the signatures of more

 

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than one party, but each of which shall be an original and all of which together
shall constitute one and the same agreement binding on all the parties hereto.

 

Section 9.7                                      Power of Attorney.  Each Member
hereby irrevocably appoints the Managing Member as such Member’s true and lawful
representative and attorney in fact, each acting alone, in such Member’s name,
place and stead, (a) to make, execute, sign and file all instruments, documents
and certificates which, from time to time, may be required to set forth any
amendment to this Agreement or which may be required by this Agreement or by the
laws of the United States of America, the State of Delaware or any other state
in which the Company shall determine to do business, or any political
subdivision or agency thereof and (b) to execute, implement and continue the
valid and subsisting existence of the Company or to qualify and continue the
Company as a foreign limited liability company in all jurisdictions in which the
Company may conduct business.  Such power of attorney is coupled with an
interest and shall survive and continue in full force and effect notwithstanding
the subsequent withdrawal from the Company of any Member for any reason and
shall survive and shall not be affected by the disability or incapacity of such
Member.

 

Section 9.8                                      Entire Agreement.  This
Agreement, the other Transaction Documents and the other documents and
agreements referred to herein or entered into concurrently herewith embody the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein; provided that such other agreements and
documents shall not be deemed to be a part of, a modification of or an amendment
to this Agreement.  There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein.  This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter,
including the Original Agreement and the First and Second Amended Agreements.

 

Section 9.9                                      Remedies.  Each Member shall
have all rights and remedies set forth in this Agreement and all rights and
remedies that such Person has been granted at any time under any other agreement
or contract and all of the rights that such Person has under any applicable
law.  Any Person having any rights under any provision of this Agreement or any
other agreements contemplated hereby shall be entitled to enforce such rights
specifically (without posting a bond or other security) to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by applicable law.

 

Section 9.10                                Severability.  Whenever possible,
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

 

Section 9.11                                Creditors.  None of the provisions
of this Agreement shall be for the benefit of or enforceable by any creditors of
the Company or any of its Affiliates, and no creditor who makes a loan to the
Company or any of its Affiliates may have or acquire (except

 

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pursuant to the terms of a separate agreement executed by the Company in favor
of such creditor) at any time as a result of making the loan any direct or
indirect interest in Company profits, losses, distributions, capital or property
other than as a secured creditor.

 

Section 9.12                                Waiver.  No failure by any party to
insist upon the strict performance of any covenant, duty, agreement or condition
of this Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute a waiver of any such breach or any other covenant,
duty, agreement or condition.

 

Section 9.13                                Further Action.  The parties agree
to execute and deliver all documents, provide all information and take or
refrain from taking such actions as may be necessary or appropriate to achieve
the purposes of this Agreement.

 

Section 9.14                                Delivery by Facsimile or Email. 
This Agreement, the agreements referred to herein, and each other agreement or
instrument entered into in connection herewith or therewith or contemplated
hereby or thereby, and any amendments hereto or thereto, to the extent signed
and delivered by means of a facsimile machine or email with scan or facsimile
attachment, shall be treated in all manner and respects as an original agreement
or instrument and shall be considered to have the same binding legal effect as
if it were the original signed version thereof delivered in person.  At the
request of any party hereto or to any such agreement or instrument, each other
party hereto or thereto shall re execute original forms thereof and deliver them
to all other parties.  No party hereto or to any such agreement or instrument
shall raise the use of a facsimile machine or email to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine or email as a defense to the
formation or enforceability of a contract, and each such party forever waives
any such defense.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed or caused to be duly
executed this Agreement as of the dates indicated.

 

 

DUFF & PHELPS ACQUISITIONS, LLC

 

 

 

 

By:

/s/ Noah Gottdiener

 

 

Name: Noah Gottdiener

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

DUFF & PHELPS CORPORATION

 

 

 

 

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

 

 

Signature Page to the Third Amended and Restated LLC Agreement

 

 

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LOVELL MINNICK EQUITY PARTNERS LP

 

 

 

 

By: Lovell Minnick Equity Advisors 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: Vestar Associates IV, L.P., its General Partner

 

 

 

 

By: Vestar Associates Corporation IV, its General Partner

 

 

 

 

By:

/s/ Sander Levy

 

 

Name: Sander Levy

 

 

Title: Managing Director

 

 

 

 

 

 

 

VESTAR/D&P HOLDINGS LLC

 

 

 

 

By:

/s/ Sander Levy

 

 

Name: Sander Levy

 

 

Title: Managing Director

 

 

 

Signature Page to the Third Amended and Restated LLC Agreement

 

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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 to the Third Amended and Restated LLC Agreement

 

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