Document:

Unassociated Document

     

    
      

       

      

       

       

      FIRST
AMENDMENT TO THE

       

      EXCHANGE
AGREEMENT

       

      BY
AND AMONG

       

       

      DUFF
& PHELPS ACQUISITIONS, LLC

       

      LM
DUFF HOLDINGS, LLC

       

      LOVELL
MINNICK EQUITY PARTNERS LP

       

      VESTAR
CAPITAL PARTNERS IV, L.P.

       

      VESTAR/D&P
HOLDINGS LLC

       

      and

      

      the
individual MEMBERS listed on the signature pages hereto

      

      Dated
as of October 5, 2009

       

       

       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      THIS
FIRST AMENDMENT TO THE EXCHANGE AGREEMENT (the "Amendment") is made and entered
into as of October 5, 2009, by and among Duff & Phelps Acquisitions LLC
("DPA"), LM Duff Holdings, LLC and Lovell Minnick Equity Partners LP
(collectively, "Lovell Minnick"), Vestar Capital Partners IV, L.P. and
Vestar/D&P Holdings LLC (collectively, "Vestar"), and the other Members
listed on the signature pages hereto (collectively with DPA, Lovell Minnick and
Vestar, the "Amending Members").

       

      WHEREAS,
the Amending Members and certain other Members have entered into that certain
Exchange Agreement, dated as of October 3, 2007 (the "Agreement"), to provide
for the possible future exchange of New Class A Units for Class A Shares, on the
terms and subject to the conditions set forth therein;

       

      WHEREAS,
each Member owns one or more New Class A Units and Class B Shares;

       

      WHEREAS,
in accordance with Section 2.1(a)(v) of the Agreement, the independent directors
of Duff & Phelps Corporation have approved this Amendment; and

       

      WHEREAS,
in accordance with Section 3.10 of the Agreement, the Amending Members have
agreed to amend the Agreement as set forth herein.

       

      Capitalized
terms used but not defined herein shall have the meanings assigned to them in
the Agreement.

       

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

       

      Section
1.    Amendments.

       

      (a)    For
purposes of clarification and to avoid confusion, the references to "up to
thirty three and one-third percent (33 1/3%) of its vested Remaining Units" and
"up to, but not exceeding, sixty-six and two-third percent (66 2/3%) of its
vested Remaining Units" in Section 2.1(a)(i); and "up to twenty percent (20%) of
its vested Remaining Units", "up to, but not exceeding, forty percent (40%) of
its vested Remaining Units" and "up to, but not exceeding sixty percent (60%) of
its vested Remaining Units" in Section 2.1(a)(ii); shall be amended hereby to
replace, in each instance, the phrase "vested Remaining Units" with the phrase
"Remaining Units (to the extent vested)".

       

      (b)    Clause
(x) of Section 2.1(b)(i) of the Agreement shall hereby be amended and replaced
in its entirety as follows:

       

      "(x)
March 5th, May 15th, August 15th and November 15th, in each case where an
Exchange Request has been timely delivered (or, if any such date is not a
Business Day, the first Business Day after such date) and"

       

      (c)    The
requirements in Section 2.1 of the Agreement to deliver an Exchange Request at
least 45 days in advance of Closing shall hereby be waived in respect of the
first Closing Date occurring after the effectiveness of this Amendment (the
"Initial Closing Date").  For the purposes of the Initial Closing
Date, notice shall be deemed to be timely delivered if given at least 30 days in
advance of such Initial Closing Date.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Section
2.    Reference to
Agreement.  Except as amended hereby, the Agreement is
reconfirmed in all respects and remains in full force and effect.

         

        Section
3.    Governing
Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

         

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

         

        Section
5.    Effectiveness.  This
Amendment shall become effective as of the day and year first above
written.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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

       

       

      
        
          	 
      	
                  DUFF
      & PHELPS ACQUISITIONS, LLC

                
	 	 
	 	 
	 
      	
                  By:   /s/ Noah
      Gottdiener                

                
	 
      	
                  Name:
      Noah Gottdiener

                
	 
      	
                  Title:   Chief
      Executive Officer

                
	 	 
	 	 
	 
      	
                  LM
      DUFF HOLDINGS, LLC

                
	 	 
	 
      	
                  By:
      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

                
	 	 
	 	 
	 
      	
                  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

                
	 	 
	 	 
	 
      	
                  INDIVIDUAL
      MEMBERS OF DUFF & PHELPS ACQUISITIONS, LLC

                
	 	 
	 	 
	 
      	
                  By:   /s/ Noah
      Gottdiener                

                
	 
      	
                  Name:
      Noah Gottdiener

                
	 	 
	 	 
	 
      	
                  By:   /s/ Gerard
      Creagh                

                
	 
      	
                  Name:
      Gerard Creagh

                
	 	 
	 	 
	 
      	
                  By:   /s/ Jacob
      L. Silverman                

                
	 
      	
                  Name:
      Jacob L. Silverman

                
	 	 
	 	 
	 
      	
                  By:   /s/ Brett
      A. Marschke                

                
	 
      	
                  Name:
      Brett A. Marschke

                
	 	 
	 	 
	 
      	
                  By:   /s/ Edward
      S. Forman                

                
	 
      	
                  Name:
      Edward S. Forman

                

        

      

       

      
        

         

        Signature
Page to Amendment to Exchange AgreementUnassociated Document

     

    
      UNITED
STATES OF AMERICA

      BEFORE
THE

      BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM

      WASHINGTON,
D.C.

      

      
        

      

      
        
          	
                  Written
      Agreement by and between

                   

                  EUROBANCSHARES,
      INC.

                  San
      Juan, Puerto Rico

                   

                  and

                   

                  FEDERAL
      RESERVE BANK OF

                    NEW
      YORK

                  New
      York, New York

                   

                   

                	
                   

                                  Docket
      No. 09-137-WA/RB-HC

                

        

         

      

      WHEREAS,
Eurobancshares, Inc., San Juan, Puerto, Rico (“Eurobancshares”), a registered
bank holding company, owns and controls Eurobank, San Juan, Puerto Rico, a state
chartered nonmember bank (the “Bank”);

       

      WHEREAS,
it is the common goal of Eurobancshares and the Federal Reserve Bank of New York
(the “Reserve Bank”) to maintain the financial soundness of Eurobancshares so
that Eurobancshares may serve as a source of strength to the Bank;

       

      WHEREAS,
Eurobancshares and the Reserve Bank have mutually agreed to enter into this
Written Agreement (the “Agreement”); and

       

      WHEREAS,
on September 26, 2009, the board of directors of Eurobancshares, at a
duly
constituted meeting, adopted a resolution authorizing and directing Rafael
Arrillaga-Torrens, Jr. to enter into this Agreement on behalf of Eurobancshares,
and consenting to compliance with each and every provision of this Agreement by
Eurobancshares and its institution-affiliated parties, as defined in sections
3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the “FDI
Act”) (12 U.S.C. §§ 1813(u) and 1818(b)(3)).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      NOW,
THEREFORE, Eurobancshares and the Reserve Bank agree as follows:

       

      Capital
Plan

       

      1.           Within
60 days of this Agreement, Eurobancshares shall submit to the Reserve Bank an
acceptable written plan to maintain sufficient capital at Eurobancshares, on a
consolidated basis, and the Bank, as a separate legal entity on a stand-alone
basis.  The plan shall, at a minimum, address, consider, and
include:

       

      (a)           The
consolidated organization’s and the Bank’s current and future capital
requirements, including compliance with the Capital Adequacy Guidelines for Bank
Holding Companies: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A
and D of Regulation Y of the Board of Governors (12 C.F.R. Part 225, App. A and
D) and the applicable capital adequacy guidelines for the Bank issued by the
Bank’s federal regulator;

       

      (b)           the
adequacy of the Bank’s capital, taking into account the volume of classified
credits, concentrations of credit, allowance for loan and lease losses (“ALLL”),
current and projected asset growth, and projected retained
earnings;

       

      (c)           the
source and timing of additional funds to fulfill the consolidated organization’s
and the Bank’s future capital requirements;

       

      (d)           supervisory
requests for additional capital at the Bank or the requirements of any
supervisory action imposed on the Bank by its federal or state regulator;
and

       

      (e)           the
requirements of section 225.4(a) of Regulation Y of the Board of Governors (12
C.F.R. § 225.4(a)) that Eurobancshares serve as a source of strength to the
Bank.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2.           Eurobancshares
shall notify the Reserve Bank, in writing, no more than 30 days after the end of
any quarter in which Eurobancshares’ consolidated capital ratios or the Bank’s
capital ratios (total risk-based, tier 1 risk-based, or leverage) fall below the
respective plan’s minimum ratios.  Together with the notification,
Eurobancshares shall submit an acceptable written plan that details the steps
Eurobancshares will take to increase its and/or the Bank’s capital ratios above
the plan’s minimums.

       

      Dividends

       

      3.            
(a)           Eurobancshares
shall not declare or pay any dividends without the prior written approval of the
Reserve Bank and the Director of the Division of Banking Supervision and
Regulation of the Board of Governors (the “Director”).

       

      (b)           Eurobancshares
shall not directly or indirectly take dividends or any other form of payment
representing a reduction in capital from the Bank without the prior written
approval of the Reserve Bank.

       

      (c)           Eurobancshares
and its nonbank subsidiaries shall not make any distributions of interest,
principal, or other sums on subordinated debentures or trust preferred
securities without the prior written approval of the Reserve Bank and the
Director. 

       

      (d)           All
requests for prior approval shall be received by the Reserve Bank at least 30
days prior to the proposed dividend declaration date, proposed distribution on
subordinated debentures, and required notice of deferral on trust preferred
securities.  All requests shall contain, at a minimum, current and
projected information on Eurobancshares’ capital, earnings, and cash flow; the
Bank’s capital, asset quality, earnings, and ALLL; and identification of the
sources of funds for the proposed payment or distribution. For requests to declare
or pay dividends, Eurobancshares must also demonstrate that the requested
declaration or payment of dividends is consistent with the Board of Governors’
Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank
Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service,
4-877 at page 4-323).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Debt
and Stock Redemption

       

      4.          
  (a)           Eurobancshares
and any nonbank subsidiary shall not, directly or indirectly,
incur, increase, or guarantee any debt without the prior written approval of the
Reserve Bank.  All requests for prior written approval shall contain,
but not be limited to, a statement regarding the purpose of the debt, the terms
of the debt, and the planned source(s) for debt repayment, and an analysis of
the cash flow resources available to meet such debt repayment.

       

      (b)           Eurobancshares
shall not, directly or indirectly, purchase or redeem any shares of its stock
without the prior written approval of the Reserve Bank.

       

      Compliance
with Laws and Regulations

       

      5.           In
appointing any new director or senior executive officer, or changing the
responsibilities of any senior executive officer so that the officer would
assume a different senior executive officer position, Eurobancshares shall
comply with the notice provisions of section 32 of the FDI Act (12 U.S.C. §
1831i) and Subpart H of Regulation Y of the Board of Governors (12
C.F.R. §§ 225.71 et
seq.).

       

      6.           Eurobancshares
shall comply with the restrictions on indemnification and severance payments of
section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal
Deposit Insurance Corporation’s regulations (12 C.F.R. Part 359).

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Progress
Reports

       

      7.           Within
30 days after the end of each calendar quarter following the date of this
Agreement, the board of directors shall submit to the Reserve Bank written
progress reports detailing the form and manner of all actions taken to secure
compliance with the provisions of this Agreement and the results thereof, and a
parent company only balance sheet, income statement, and, as applicable, a
report of changes in stockholders’ equity.

       

      Approval
and Implementation of Plan, Policies, and Procedures

       

      8.          
  (a)           Eurobancshares
shall submit a written capital plan that is acceptable to the Reserve Bank
within the applicable time periods set forth in paragraph 1 of this
Agreement.

       

      (b)           Within
10 days of approval by the Reserve Bank, Eurobancshares shall adopt the approved
capital plan.  Upon adoption, Eurobancshares shall promptly implement
the approved plan and thereafter fully comply with it.

       

      (c)           During
the term of this Agreement, the approved capital plan shall not be amended or
rescinded without the prior written approval of the Reserve Bank.

       

      Communications

       

      9.           All
communications regarding this Agreement shall be sent to:

       

      
        (a)           Mr.
Thomas Oravez

        Assistant Vice President

        Federal Reserve Bank of New
York

        33 Liberty Street

        New York, New York 10045

        

        (b)           Mr.
Rafael Arillaga-Torrens

        Chairman

        Eurobancshares, Inc.

        P.O. Box 191009

        San Juan, Puerto Rico
00919-1009

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Miscellaneous

       

      10.           Notwithstanding
any provision of this Agreement, the Reserve Bank may, in its sole discretion,
grant written extensions of time to Eurobancshares to comply with any provision
of this Agreement.

       

      11.           The
provisions of this Agreement shall be binding upon Eurobancshares and its
institution-affiliated parties, in their capacities as such, and their
successors and assigns.

       

      12.           Each
provision of this Agreement shall remain effective and enforceable until stayed,
modified, terminated, or suspended in writing by the Reserve Bank.

       

      13.           The
provisions of this Agreement shall not bar, estop, or otherwise prevent the
Board of Governors, the Reserve Bank, or any other federal or state agency from
taking any other action affecting Eurobancshares, the Bank, any nonbank
subsidiary of Eurobancshares, or any of their current or former
institution-affiliated parties and their successors and assigns.

       

      14.           Pursuant
to section 50 of the FDI Act (12 U.S.C. § 1831aa), this Agreement is
enforceable
by the Board of Governors under section 8 of the FDI Act (12 U.S.C. §
1818).

       

       

      IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed as of the 30th day of September,
2009.

       

       

      
        
          	
                  EUROBANCSHARES,
      INC.

                	
                  FEDERAL
      RESERVE BANK OF

                
	 
      	
                       NEW
      YORK

                
	 
      	 
      
	 	 
	
                  By:
      /s/ Rafael
      Arillaga-Torrens, Jr.        

                	
                  By:
      /s/ Thomas
      Oravez            

                
	
                             
       Rafael Arillaga-Torrens

                	
                              
      Thomas Oravez

                
	
                           
         Chairman

                	
                              
      Assistant Vice President

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