Document:

<PAGE>   1
                                                                    EXHIBIT 4.26

                                  AMVESCAP INC.

                                 as Corporation

                                       and

                            CIBC MELLON TRUST COMPANY

                                   as Trustee

                                       and

                                  AMVESCAP PLC

                                  as Guarantor

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                                    INDENTURE
                     AMVESCAP EQUITY SUBORDINATED DEBENTURES

                                 August 1, 2000

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                                TABLE OF CONTENTS

<TABLE>
<S>                   <C>                                                                                  <C>
                                                   ARTICLE 1
                                                 INTERPRETATION

Section 1.1           Definitions............................................................................1
Section 1.2           Meaning of "outstanding" for Certain Purposes..........................................8
Section 1.3           Acts of Holders........................................................................8
Section 1.4           Interpretation not Affected by Headings, etc..........................................10
Section 1.5           Applicable Law........................................................................10
Section 1.6           Invalidity Provisions.................................................................10
Section 1.7           Language..............................................................................10
Section 1.8           Successors and Assigns................................................................10
Section 1.9           Benefits of Indenture.................................................................10

                                                   ARTICLE 2
                                                 THE DEBENTURES

Section 2.1           Limit of Issue and Designation of Debentures..........................................11
Section 2.2           Form and Terms of Debentures..........................................................11
Section 2.3           Interest..............................................................................11
Section 2.4           Prescription..........................................................................12
Section 2.5           Issue of Debentures...................................................................12
Section 2.6           Concerning Interest...................................................................13
Section 2.7           Execution of Debentures...............................................................13
Section 2.8           Certification by the Trustee..........................................................13
Section 2.9           Registration of Debentures............................................................14
Section 2.10          Person Entitled to Payment............................................................15
Section 2.11          Replacement of Debentures.............................................................16
Section 2.12          Exchange of Debentures................................................................16
Section 2.13          Register Open for Inspection..........................................................17
Section 2.14          Payment of Interest and Principal.....................................................17
Section 2.15          Rank and Subordination................................................................17
Section 2.16          Notice to Debentureholders............................................................18
Section 2.17          Notice to the Trustee.................................................................18
Section 2.18          Notice to the Corporation and to the Guarantor........................................19
Section 2.19          Change in Address.....................................................................19
Section 2.20          Mail Service Interruption.............................................................19

                                                   ARTICLE 3
                                     REDEMPTION, PURCHASE AND CANCELLATION

Section 3.1           Redemption of Debentures..............................................................19
Section 3.2           Places of Payment.....................................................................20
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<TABLE>
<S>                   <C>                                                                                  <C>
Section 3.3           Notice of Redemption..................................................................20
Section 3.4           Debentures Due on Redemption Date.....................................................20
Section 3.5           Deposit of Redemption Monies..........................................................21
Section 3.6           Right to Repay Redemption Amount in Exchangeable Shares...............................21
Section 3.7           Failure to Surrender Debentures Called for Redemption.................................23
Section 3.8           Purchase of Debentures................................................................24
Section 3.9           Cancellation of Purchased Debentures..................................................24

                                                   ARTICLE 4
                                      CONVERSION AND SHARE REPAYMENT RIGHT

Section 4.1           Conversion Right......................................................................24
Section 4.2           Right to Pay Conversion Value in Cash in Lieu of Conversion...........................26
Section 4.3           Right to Repay Principal Amount in Exchangeable  Shares on Maturity...................27
Section 4.4           Completion of Conversion..............................................................30
Section 4.5           Fractional Shares.....................................................................31
Section 4.6           Relating to the Issue of Exchangeable Shares..........................................31
Section 4.7           Taxes and Charges on the Issue of Exchangeable Shares.................................32

                                                   ARTICLE 5
                                                  ADJUSTMENTS

Section 5.1           Adjustment Upon Subdivision or Consolidation..........................................32
Section 5.2           Reorganization Event..................................................................32
Section 5.3           Adjustments as a Result of Certain Distributions and Extraordinary Cash Dividends.....33
Section 5.4           Discretionary Adjustment..............................................................34
Section 5.5           Changes Affecting Exchangeable Shares.................................................34
Section 5.6           Rules Applicable to Adjustments.......................................................35
Section 5.7           Notice of Special Events..............................................................35

                                                   ARTICLE 6
                                          SUBORDINATION OF DEBENTURES

Section 6.1           Agreement to Subordinate..............................................................36
Section 6.2           Distribution on Insolvency or Winding-up..............................................36
Section 6.3           Subrogation of Debentures.............................................................38
Section 6.4           No Payment to Debentureholders if Event of Default under the Senior Liabilities.......38
Section 6.5           Authorization of Debentureholders to Trustee to Effect Subordination..................39
Section 6.6           Knowledge of Trustee..................................................................39
Section 6.7           Trustee May Hold Senior Liabilities...................................................40
Section 6.8           Rights of Holders of Senior Liabilities Not Impaired..................................40
</TABLE>

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<TABLE>
<S>                   <C>                                                                                  <C>
Section 6.9           Altering the Senior Liabilities.......................................................40
Section 6.10          Additional Indebtedness...............................................................40
Section 6.11          Right of Debentureholder to Convert Not Impaired......................................40

                                                   ARTICLE 7
                                             GUARANTEE OF AMVESCAP

Section 7.1           Guarantee for Benefit of All Debentureholders.........................................40
Section 7.2           Guarantee of Principal, Interest and Other Amounts....................................41
Section 7.3           The Guarantor's Liability on Discharge of the Corporation.............................41
Section 7.4           Liability of the Guarantor............................................................42
Section 7.5           Subrogation...........................................................................43
Section 7.6           Waiver................................................................................44
Section 7.7           Waiver of Default.....................................................................44
Section 7.8           Acknowledgement.......................................................................44
Section 7.9           Notice to Guarantor...................................................................44
Section 7.10          No Set-Off Rights.....................................................................44

                                                   ARTICLE 8
                                 COVENANTS OF THE CORPORATION AND THE GUARANTOR

Section 8.1           Covenants of the Corporation..........................................................44
Section 8.2           Trustee to Give Notice of Event of Default............................................46
Section 8.3           Performance of Covenants by Trustee...................................................46
Section 8.4           Covenant of the Guarantor.............................................................46

                                                   ARTICLE 9
                                            DEFAULT AND ENFORCEMENT

Section 9.1           Events of Default.....................................................................47
Section 9.2           Waiver................................................................................48
Section 9.3           Waiver of Default or Breach...........................................................49
Section 9.4           Other Remedies........................................................................49
Section 9.5           Application of Money Collected........................................................49
Section 9.6           Control by Holders....................................................................50
Section 9.7           Limitation on Suits...................................................................50
Section 9.8           Rights of Holders To Receive Payment..................................................51
Section 9.9           Collection Suit by Trustee............................................................51
Section 9.10          Trustee May File Proofs of Claim......................................................51
Section 9.11          Undertaking for Costs.................................................................51
Section 9.12          Delay or Omission Not Waiver..........................................................52
Section 9.13          Remedies Cumulative...................................................................52
Section 9.14          Judgment Against the Corporation and/or the Guarantor.................................52
Section 9.15          Distribution of Proceeds..............................................................52
Section 9.16          Immunity of Shareholders, etc.........................................................53
Section 9.17          Trustee Appointed Attorney............................................................53
</TABLE>

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<TABLE>
<S>                   <C>                                                                                  <C>
                                                   ARTICLE 10
                                           SATISFACTION AND DISCHARGE

Section 10.1          Cancellation and Destruction..........................................................53
Section 10.2          Non-Presentation of Debentures........................................................54
Section 10.3          Repayment of Unclaimed Moneys or Exchangeable Shares to Corporation...................54
Section 10.4          Release from Covenants................................................................54

                                                   ARTICLE 11
                       MERGER, AMALGAMATION, CONSOLIDATION, CONVEYANCE, TRANSFER OR LEASE

Section 11.1          Amalgamation and Consolidation of Corporation and Conveyances Permitted Subject to
                      Certain Conditions....................................................................55
Section 11.2          Officers' Certificate and Opinion of Counsel..........................................55
Section 11.3          Vesting of Powers in Successor........................................................56
Section 11.4          Execution of Supplemental Indenture...................................................56

                                                   ARTICLE 12
                                          MEETINGS OF DEBENTUREHOLDERS

Section 12.1          Purposes for Which Meetings May be Called.............................................56
Section 12.2          Call, Notice and Place of Meetings....................................................56
Section 12.3          Persons Entitled to Vote at Meetings..................................................57
Section 12.4          Quorum; Action........................................................................57
Section 12.5          Determination of Voting Rights; Chairman; Conduct and Adjournment of Meetings.........58
Section 12.6          Counting Votes and Recording Action of Meetings.......................................58

                                                   ARTICLE 13
                                            SUPPLEMENTAL INDENTURES

Section 13.1          Supplemental Indentures Without Consent of Holders....................................59
Section 13.2          Supplemental Indentures with Consent of Holders.......................................60
Section 13.3          Execution of Supplemental Indentures..................................................61
Section 13.4          Effect of Supplemental Indentures.....................................................62

                                                   ARTICLE 14
                                             CONCERNING THE TRUSTEE

Section 14.1          Duties of Trustee.....................................................................62
Section 14.2          Rights of Trustee.....................................................................63
Section 14.3          Documents, Moneys, etc., Held by Trustee..............................................65
Section 14.4          Individual Rights of Trustee..........................................................66
</TABLE>

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<TABLE>
<S>                   <C>                                                                                  <C>
Section 14.5          Trustee's Disclaimer..................................................................66
Section 14.6          Discretion of Trustee.................................................................66
Section 14.7          Compensation and Indemnity............................................................67
Section 14.8          Replacement of Trustee................................................................68
Section 14.9          Successor Trustee by Merger, etc......................................................69
Section 14.10         Eligibility; Disqualification.........................................................69
Section 14.11         Acceptance of Trust...................................................................69
Section 14.12         Additional Evidence...................................................................69
Section 14.13         Deposit of Debentures.................................................................70
</TABLE>

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                                      -1-

                                   INDENTURE

         This Indenture dated August 1, 2000, among AMVESCAP INC. (the
"CORPORATION"), CIBC MELLON TRUST COMPANY (the "TRUSTEE") and AMVESCAP PLC (the
"GUARANTOR").

         RECITALS:

         (a)      The Corporation is a wholly-owned subsidiary of the Guarantor
                  and has authorized the execution and delivery of this
                  Indenture to provide for the creation and issuance of the
                  Debentures to be issued under this Indenture and the allotment
                  and issue of the Exchangeable Shares that may be issued upon
                  conversion, redemption or maturity of the Debentures as herein
                  provided;

         (b)      All corporate proceedings necessary to make this Indenture a
                  valid agreement of the Corporation and the Guarantor have been
                  done; and

         (c)      The foregoing recitals are made as representations and
                  statements of fact by the Corporation and the Guarantor and
                  not by the Trustee.

         In consideration of the foregoing and the mutual agreements contained
herein (the receipt and adequacy of which are acknowledged), the parties agree
as follows:

                                    ARTICLE 1
                                 INTERPRETATION

SECTION 1.1 DEFINITIONS.

(1)      In this Indenture and in the Debentures, unless there is something in
         the subject matter or context inconsistent therewith or unless
         otherwise expressly provided:

         "ACT" when used with respect to any Debentureholder has the meaning
         specified in Section 1.3(1).

         "AFFILIATE" has the meaning attributed thereto in the Securities Act
         (Ontario), as amended.

         "AMVESCAP ORDINARY SHARES" means the ordinary shares in the capital of
         the Guarantor.

         "AMVESCAP SHARE RATE" means 41.3286328902, subject to adjustment from
         time to time pursuant to Article 5.

         "AMVESCAP SHARE VALUE" means, as at any date, the amount equal to the
         AMVESCAP Share Rate multiplied by the Current Market Price as at such
         date.

<PAGE>   8
                                      -2-

         "APPLICABLE SECURITIES LEGISLATION" means applicable securities laws in
         each of the Provinces of Canada.

         "AUTHORIZED INVESTMENTS" has the meaning attributed thereto in Section
         14.3.

         "BOARD RESOLUTION" means a copy of a resolution certified by an officer
         of the Corporation to have been duly adopted by the Board of Directors
         and to be in full force and effect on the date of such certification.

         "BUSINESS DAY" means any day on which commercial banks are generally
         open for business in Toronto, Ontario and London, England, other than a
         Saturday, a Sunday or a day observed as a holiday in Toronto, Ontario
         or in London, England under applicable laws.

         "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed in
         a currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT")
         at any date the product obtained by multiplying:

         (a)      the Foreign Currency Amount; by

         (b)      the noon spot exchange rate on such date for such foreign
                  currency expressed in Canadian dollars as reported by the Bank
                  of Canada or, in the event such spot exchange rate is not
                  available, such spot exchange rate on such date for such
                  foreign currency expressed in Canadian dollars as may be
                  deemed by the board of directors of the Guarantor to be
                  appropriate for such purpose.

         "CAPITAL REORGANIZATION" has the meaning attributed thereto in Section
         5.5.

         "CONVERSION DATE" means a date chosen by a Debentureholder pursuant to
         Section 4.1 for conversion of Debentures into Exchangeable Shares.

         "CONVERSION NOTICE" has the meaning attributed thereto in Section
         4.1(2).

         "CONVERSION NUMBER", as of any date, means the number obtained when (i)
         the Conversion Value as of such date is divided by (ii) the Current
         Market Price as of such date.

         "CONVERSION VALUE", as of any date, means the lesser of the AMVESCAP
         Share Value as of such date and $1,200.

         "CORPORATION" means AMVESCAP Inc., a corporation existing under the
         laws of Nova Scotia, and subject to Article 11, its successors and
         assigns.

<PAGE>   9
                                      -3-

         "COUNSEL" means a legal counsel or firm of legal counsel retained by
         the Trustee or retained by the Corporation and acceptable to the
         Trustee.

         "CURRENT MARKET PRICE" means, in respect of an AMVESCAP Ordinary Share
         on any date, the quotient obtained by dividing (i) the aggregate of the
         Daily Value of Trades for each day during the period of 20 consecutive
         Trading Days ending not more than three Trading Days before such date;
         by (ii) the aggregate volume of AMVESCAP Ordinary Shares used to
         calculate such Daily Value of Trades.

         "DAILY VALUE OF TRADES" means, in respect of the AMVESCAP Ordinary
         Shares on any Trading Day, the Canadian Dollar Equivalent of the
         product of (i) the volume weighted average price of AMVESCAP Ordinary
         Shares on the LSE (or, if the AMVESCAP Ordinary Shares are not then
         listed on the LSE, on such other stock exchange or automated quotation
         system on which the AMVESCAP Ordinary Shares are listed or quoted, as
         the case may be, as may be selected by the board of directors of the
         Guarantor for such purpose) on such date, as determined by Bloomberg
         L.P. or other reputable, third party information source selected by the
         board of directors of the Guarantor; and (ii) the aggregate volume of
         AMVESCAP Ordinary Shares traded on such day on the LSE or such other
         stock exchange or automated quotation system; provided that any such
         selections by the board of directors of the Guarantor shall be
         conclusive and binding.

         "DEBENTURES" means, as of any date, the equity subordinated debentures
         of the Corporation issued hereunder and outstanding as of such date.

         "DETERMINATION DATE" means the Business Day that is three Business Days
         prior to the Maturity Date.

         "DIRECTOR" means a director of the Corporation for the time being, and
         "DIRECTORS" or "BOARD OF DIRECTORS" means the board of directors of the
         Corporation or a committee of the board of directors duly authorized to
         make a decision on the matter in question for the time being and
         reference without more to action by the Directors means action by such
         Directors as a board or action by a committee of the Board of Directors
         duly authorized to make a decision on the matter in question.

         "DISTRIBUTED PROPERTY" means all securities (excluding Exchangeable
         Shares and options, rights or warrants to purchase Exchangeable Shares)
         or assets (including dividends, other than cash dividends and stock
         dividends paid in lieu of cash dividends) distributed by way of
         dividend, return of capital or otherwise to registered holders of the
         Exchangeable Shares.

         "EVENT OF DEFAULT" has the meaning attributed thereto in Section 9.1.

<PAGE>   10
                                      -4-

         "EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
         capital of the Corporation.

         "EXERCISE NOTICE" has the meaning attributed thereto in Section 4.3(2).

         "EXTRAORDINARY CASH DIVIDEND" means in respect of the Exchangeable
         Shares:

         (a)      A cash dividend on the Exchangeable Shares in respect of a
                  particular fiscal year representing the excess, if any, of (i)
                  the aggregate of all cash dividends declared and paid on the
                  AMVESCAP Ordinary Shares in respect of such fiscal year over
                  (ii) the greatest of (A) 200% of the aggregate of all cash
                  dividends declared and paid on the AMVESCAP Ordinary Shares in
                  respect of the year ended December 31, 1999, (B) 300% of the
                  average of the aggregate of all cash dividends declared and
                  paid on the AMVESCAP Ordinary Shares in respect of the
                  immediately preceding three fiscal years, and (C) 100% of the
                  aggregate consolidated net income of the Guarantor, before
                  extraordinary and unusual items, for its immediately preceding
                  fiscal year; and

         (b)      Any cash dividend on the Exchangeable Shares which the
                  Directors by resolution determine to be extraordinary, taking
                  into account the amount of the dividend, the effect of the
                  dividend on the market value of the Exchangeable Shares after
                  payment thereof, the form of payment, the financial position
                  of the Corporation, economic conditions, business practices
                  and such other factors as the Directors consider to be
                  relevant.

         "FREELY TRADEABLE" means, in respect of shares of any class in the
         capital of any corporation, shares which

         (a)      are issuable by such corporation without the necessity of
                  filing a prospectus or any other similar offering document
                  (other than such prospectus or similar offering document that
                  has already been filed) under Applicable Securities
                  Legislation and such issue does not constitute a distribution
                  (other than a distribution already qualified by prospectus or
                  similar offering document) under Applicable Securities
                  Legislation; and

         (b)      can be transferred by the holder thereof without any
                  restriction under Applicable Securities Legislation, such as
                  hold periods except for restrictions on transfer by reason of
                  the holder being a "control person" under Applicable
                  Securities Legislation.

         "GOVERNMENT ENTITY" means any (i) multinational, federal, provincial,
         state, regional, municipal, local or other government, governmental or
         public department, central bank, court, tribunal, arbitral body,
         commission, board, bureau or agency, domestic or foreign, (ii)
         self-regulatory organization or stock

<PAGE>   11
                                      -5-

         exchange (including, without limitation, the LSE, the UKLA and the
         TSE), (iii) any subdivision, agent, commission, board, or authority of
         any of the foregoing, or (iv) any quasi-governmental or private body
         exercising any regulatory, expropriation or taxing authority under or
         for the account of any of the foregoing.

         "GUARANTOR" means AMVESCAP PLC, a corporation existing under the laws
         of England, and subject to Article 11, its successors and assigns.

         "HOLDER(S)" or "DEBENTUREHOLDER(S)" means the registered holder(s) of
         Debentures for the time being.

         "INDEBTEDNESS" includes any liability for any money owing whatsoever
         including, without limitation, in respect of the acquisition of any
         assets or as a result of moneys borrowed or raised by whatever means
         (including, without limitation, by means of commercial paper, bankers'
         acceptances, letters of credit, debt instruments, bank debt or
         financial leases, and any liability evidenced by bonds, debentures,
         notes or similar instruments), the guarantee of any obligations and the
         obligation to indemnify.

         "INDENTURE", "HEREIN", "HEREBY", "HEREOF" and similar expressions mean
         or refer to this Indenture and any indenture, deed or instrument
         supplemental or ancillary hereto; and the expressions "ARTICLE", and
         "SECTION" followed by numbers or letters mean and refer to the
         specified Article or Section of this Indenture.

         "INTEREST PAYMENT DATE" means February 1 and August 1 in each year, the
         first Interest Payment Date being February 1, 2001 and the last
         Interest Payment Date being August 1, 2003.

         "LSE" means the London Stock Exchange plc or its successors.

         "MATURITY DATE" means August 1, 2003.

         "MATURITY NOTICE" has the meaning attributed thereto in Section 4.3(2).

         "OFFER" means a take-over bid or issuer bid to purchase AMVESCAP
         Ordinary Shares, or any other transaction which has a similar effect
         (including any amalgamation, arrangement, consolidation, merger or
         other transaction involving the Guarantor, as a consequence of which
         some or all of the AMVESCAP Ordinary Shares outstanding immediately
         prior to the transaction will be exchanged or transferred for or
         converted into cash, securities or other property of the Guarantor or
         another Person) provided that one of the conditions to the completion
         of such purchase pursuant to such take-over bid or issuer bid

<PAGE>   12
                                      -6-

         or to the completion of such other transaction is that the Debentures
         are redeemed.

         "OFFICERS' CERTIFICATE" means a written certificate signed in the name
         of the Corporation by any two officers of the Corporation.

         "OPINION OF COUNSEL" means a written opinion containing the information
         specified herein from legal counsel who is acceptable to the Trustee,
         acting reasonably.

         "PERSON" includes any individual, firm, partnership, limited
         partnership, joint venture, venture capital fund, limited liability
         company, unlimited liability company, association, trust, trustee,
         executor, administrator, legal personal representative, estate, group,
         body corporate, corporation, unincorporated association or
         organization, Governmental Entity, syndicate or other entity.

         "PLAN" means the Plan of Arrangement attached to the articles of
         arrangement of Trimark Financial Corporation sent to the Director under
         the Business Corporations Act (Ontario) on the date hereof.

         "QUALIFIED INSTITUTION" has the meaning attributed hereto in Section
         14.3.

         "RECOGNIZED STOCK EXCHANGE", with respect to the Exchangeable Shares
         and the Debentures, means the TSE and, with respect to the AMVESCAP
         Ordinary Shares, means the LSE.

         "REDEMPTION AMOUNT" has the meaning attributed thereto in Section 3.1.

         "REDEMPTION DATE" has the meaning attributed thereto in Section 3.1.

         "REDEMPTION NOTICE" has the meaning attributed thereto in Section 3.3.

         "REORGANIZATION EVENT" means any of (i) any amalgamation, arrangement,
         consolidation or merger of the Guarantor, with or into another entity
         that is a corporation (other than an amalgamation, arrangement,
         consolidation or merger in which the Guarantor is the continuing
         corporation and in which the AMVESCAP Ordinary Shares outstanding
         immediately prior to the amalgamation, arrangement, consolidation or
         merger are not exchanged for cash, securities or other property of the
         Guarantor or another corporation); (ii) any sale, transfer, lease or
         conveyance to another corporation of all or substantially all of the
         property of the Guarantor; or (iii) any liquidation, dissolution or
         winding-up of the Guarantor.

         "SENIOR LIABILITIES" means all amounts payable (including, without
         limitation, principal, interest, premiums, fees and expenses) in
         respect of or as a result of all

<PAGE>   13
                                      -7-

         Indebtedness of each of the Corporation (other than the Debentures) and
         the Guarantor, whether outstanding on the date of this Indenture or
         thereafter created, incurred, assumed or guaranteed by the Corporation
         and/or the Guarantor other than Indebtedness of the Corporation or the
         Guarantor which at any time at the option of such corporation is
         convertible into or exchangeable for Exchangeable Shares or any other
         class of shares of such corporation or Indebtedness of the Corporation
         or the Guarantor which, pursuant to the terms of the instrument
         creating or evidencing such Indebtedness, does not rank prior in right
         of payment to the Debentures.

         "SHARE REDEMPTION RIGHT" has the meaning attributed thereto in Section
         3.6(1).

         "SHARE REPAYMENT RIGHT" has the meaning attributed thereto in Section
         4.3(1).

         "SUBSIDIARY" means, with respect to a specified body corporate, any
         body corporate of which more than 50% of the outstanding shares
         ordinarily entitled to elect a majority of the board of directors
         thereof (whether or not shares of any other class or classes shall or
         might be entitled to vote upon the happening of any event or
         contingency) are at the time owned directly or indirectly by such
         specified body corporate and shall include any body corporate,
         partnership, joint venture or other entity over which it exercises
         direction or control or which is in a like relation to a subsidiary.

         "SUCCESSOR CORPORATION" has the meaning attributed thereto in Section
         11.1.

         "TRADING DAY" means, with respect to a Recognized Stock Exchange or
         other market for securities, any day on which such exchange or market
         is open for trading or quotation.

         "TRUSTEE" means CIBC Mellon Trust Company and its successors hereunder.

         "TSE" means The Toronto Stock Exchange Inc. or its successors.

         "UKLA" means the UK Listing Authority, namely the Financial Services
         Authority in its capacity as the competent authority for the purposes
         of Part IV of the Financial Services Act, 1986 of the United Kingdom
         (or any successor Act).

         "WRITTEN ORDER" or "WRITTEN REQUEST" means a written order or request,
         respectively, signed in the name of the Corporation by an authorized
         officer of the Corporation.

(2)      Words importing the singular number include the plural and vice versa
         and words importing gender include the masculine, feminine and neuter
         genders.

<PAGE>   14
                                      -8-

(3)      Except as otherwise provided herein, any reference in this Indenture to
         any act, statute, regulation, rule, instrument, agreement or section
         thereof shall be deemed to be a reference to such act, statute,
         regulation, rule, instrument, agreement or section thereof as amended,
         re-enacted or replaced from time to time.

(4)      Any reference in this Indenture to "DOLLARS" or the sign "$" shall be
         deemed to be a reference to lawful money of Canada.

SECTION 1.2 MEANING OF "OUTSTANDING" FOR CERTAIN PURPOSES.

         Every Debenture shall be deemed to be outstanding until it shall be
cancelled or delivered to the Trustee for cancellation (for greater certainty,
delivery of any Debentures to the Trustee for conversion, redemption or on
maturity is not delivery for cancellation until the Holder of such Debentures
has received all monies and/or securities it is entitled to receive in such
event) or until moneys and/or securities for the payment thereof shall be set
aside under Article 10, or until it shall have become void pursuant to Section
2.4, provided however, that where a new Debenture has been issued in
substitution for a Debenture which has been lost, stolen or destroyed, only one
of such Debentures shall be counted for all purposes, including, without
limitation, the purpose of determining the aggregate principal amount of
Debentures outstanding, and provided that, for the purpose of any provision of
this Indenture entitling Holders of Debentures then outstanding to vote,
constitute a quorum for the purpose of voting, sign consents, requisitions or
other instruments or take any other action under this Indenture, Debentures
owned, directly or indirectly, legally or beneficially by the Corporation or any
Affiliate shall be disregarded, except that (i) for the purpose of determining
whether the Trustee shall be protected in relying on any vote, constitution of a
quorum, consent, requisition, instrument or other action, only those Debentures
which according to an Officers' Certificate received by the Trustee are so owned
shall be disregarded; and (ii) Debentures so owned which have been pledged in
good faith other than to the Corporation or any Affiliate shall not be so
disregarded, if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Debentures in its discretion, free from the
control of the Corporation or any Affiliate.

SECTION 1.3 ACTS OF HOLDERS

(1)      Any request, demand, authorization, direction, notice, consent, waiver
         or other action provided by this Indenture to be given or taken by
         Holders may be embodied in and evidenced by one or more instruments of
         substantially similar tenor signed by such Holders in person or by
         agents duly appointed in writing or, alternatively, be embodied in and
         evidenced by the record of Debentureholders voting in favour thereof,
         either in person or by proxies duly appointed in writing, at any
         meeting of Debentureholders duly called and held in accordance with the
         provisions of Article 12, or a combination of such instruments and any
         such record. Except as herein otherwise expressly

<PAGE>   15
                                      -9-

         provided, such action shall become effective when such requisite
         instrument or instruments are delivered to the Trustee and, where it is
         hereby expressly required, to the Corporation. Such instrument or
         instruments (and the action embodied therein and evidenced thereby) are
         herein sometimes referred to as the "ACT" of the Holders signing such
         instrument or instruments. Proof of execution of any such instrument or
         of a writing appointing any such agent shall be sufficient for any
         purpose of this Indenture and, subject to Section 14.1, conclusive in
         favour of the Trustee and the Corporation, if made in the manner
         provided in this Section. The record of any meeting of Debentureholders
         shall be provided in the manner provided in Section 12.6.

(2)      The fact and date of the execution by any Person of any such instrument
         or writing may be proved by the affidavit of a witness of such
         execution or by a certificate of a notary public or other officer
         authorized by law to take acknowledgements of deeds, certifying that
         the individual signing such instrument or writing acknowledged to him
         or her the execution thereof. Where such execution is by a signer
         acting in a capacity, other than his or her individual capacity, such
         certificate or affidavit shall also constitute sufficient proof of his
         or her authority. The fact and date of the execution of any such
         instrument or writing, or the authority of the Person executing the
         same, may also be proved in any manner that the Trustee deems
         sufficient.

(3)      If the Corporation or the Trustee shall solicit from the
         Debentureholders any Act, the Corporation or the Trustee, as the case
         may be, may, at its option, fix in advance a record date for the
         determination of Debentureholders entitled to take such Act, but the
         Corporation or the Trustee, as the case may be, shall have no
         obligation to do so. Any such record date shall be fixed at the
         Corporation's or the Trustee's discretion, as the case may be. If such
         a record date is fixed, such Act may be sought or taken before or after
         the record date, but only the Debentureholders of record at the close
         of business (in the City of Toronto, Ontario) on such record date shall
         be deemed to be Debentureholders for the purpose of determining whether
         Holders of the requisite proportion of Debentures then outstanding have
         authorized or agreed or consented to such Act, and for that purpose the
         Debentures then outstanding shall be computed as of such record date.

(4)      Any Act of the Holder of a Debenture shall bind every future holder of
         the same Debenture and the Holder of every Debenture issued upon the
         registration of transfer thereof or in exchange therefor or in lieu
         thereof in respect of anything done, suffered or omitted by the Trustee
         or the Corporation in reliance thereon, whether or not notation of such
         action is made upon such Debenture.

<PAGE>   16
                                      -10-

SECTION 1.4 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.

         The division of this Indenture into Articles and Sections, the
provision of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation hereof.

SECTION 1.5 APPLICABLE LAW.

(1)      This Indenture and the Debentures shall be governed by and construed in
         accordance with the laws of the Province of Ontario and the laws of
         Canada applicable therein.

(2)      The parties hereby irrevocably attorn and submit to the non-exclusive
         jurisdiction of the courts of Ontario with respect to any matter
         arising under or related to the Indenture and the Debentures.

SECTION 1.6 INVALIDITY PROVISIONS.

         If any provision contained in this Indenture or the Debentures should
be invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.

SECTION 1.7 LANGUAGE.

         This Indenture and all matters related hereto shall be read, construed
and enforced in the English language, and unless otherwise specified herein, all
notices, statements of account and other documents signed or permitted to be
given or entered into pursuant hereto shall be drawn up in the English language
only. The parties hereto expressly request and require that this document be
drawn up in English. Les parties aux presentes conviennent et exigent que cette
entente et tous les documents qui s'y rattachent soient rediges en anglais.

SECTION 1.8 SUCCESSORS AND ASSIGNS.

         All covenants and agreements in this Indenture by the Corporation and
the Guarantor shall bind their respective successors and assigns, whether
expressed or not.

SECTION 1.9 BENEFITS OF INDENTURE.

         Nothing in this Indenture or in the Debentures, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any paying agent and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.

<PAGE>   17
                                      -11-

                                    ARTICLE 2
                                 THE DEBENTURES

SECTION 2.1 LIMIT OF ISSUE AND DESIGNATION OF DEBENTURES.

         The Debentures authorized to be issued hereunder shall consist of, and
be limited to, an aggregate maximum principal amount of ONE BILLION, TWO HUNDRED
AND SEVENTY-NINE MILLION, FIVE HUNDRED AND THIRTY THOUSAND Dollars
($1,279,530,000.00) designated as "AMVESCAP EQUITY SUBORDINATED DEBENTURES".

SECTION 2.2 FORM AND TERMS OF DEBENTURES.

(1)      The Debentures shall be dated as of August 1, 2000, shall bear interest
         from and including that date at the rate of 6.00% per annum (after as
         well as before maturity, default and judgment, with interest on overdue
         interest at such rate), payable in equal semi-annual instalments in
         arrears in lawful money of Canada on each Interest Payment Date, and
         shall mature on the Maturity Date.

(2)      Subject to exercise of (i) the right to redeem pursuant to Article 3;
         (ii) the right to convert pursuant to Section 4.1 or Section 4.3; and
         (iii) the Share Repayment Right pursuant to Section 4.3, the principal
         of the Debentures will be payable on the Maturity Date in lawful money
         of Canada against surrender thereof by the registered Holder of the
         Debentures at the place at which the register is maintained pursuant to
         Section 2.9.

(3)      The Debentures shall be issued as fully registered Debentures in
         denominations of $1,000 and integral multiples of $1,000, shall be
         redeemable as provided for in Article 3 and shall be convertible as
         provided for in Article 4.

(4)      The Debentures and the certificate of the Trustee endorsed thereon
         shall be substantially in the form set forth in Schedule "A" hereto.

(5)      Subject to applicable law and the rules of the TSE, the Debentures may
         be printed, engraved or lithographed or may be partly in one form and
         partly in the other, as the Corporation may determine.

SECTION 2.3 INTEREST.

         Each Debenture issued hereunder, whether issued originally or in
exchange for another Debenture, shall bear interest daily from and including
August 1, 2000 or from and including the last Interest Payment Date on which
interest shall have been paid or made available for payment on the Debentures
then outstanding, whichever shall be the later, to but excluding the earlier of:

         (a)      If called for redemption, the Redemption Date;

<PAGE>   18
                                      -12-

         (b)      If converted prior to Maturity Date in accordance with Section
                  4.1, the Conversion Date; and

         (c)      The Maturity Date;

unless such payment is improperly withheld or refused, upon due presentation and
surrender thereof for payment on or after the appropriate date and prior to the
setting aside of the appropriate amount pursuant to Article 10. In addition,
interest shall be payable on the Conversion Value in accordance with the
provisions of Section 4.4.

SECTION 2.4 PRESCRIPTION.

         The right of the Debentureholders to exercise their rights under this
Indenture shall become void unless the Debentures are presented for payment
within a period of five years from the Maturity Date, after which payment
thereof shall be governed by the provisions of Article 10. The Corporation shall
have satisfied its obligations under a Debenture upon remittance to the Trustee
for the account of the Holder thereof, either upon redemption, on the Conversion
Date for such Debenture or on the Maturity Date, of any and all consideration
due hereunder in respect of such Debenture in cash or by the delivery of Freely
Tradeable Exchangeable Shares, subject to and in accordance with the provisions
of this Indenture, and such remittance shall for all purposes be deemed a
payment to such Holder, and to that extent such Debenture shall thereafter not
be considered as outstanding and such Holder shall have no right, except to
receive payment out of the moneys so paid and deposited or Freely Tradeable
Exchangeable Shares so deposited (or, after redemption or purchase of the
Exchangeable Shares pursuant to their terms or to the terms of the Plan,
AMVESCAP Ordinary Shares) upon surrender of such Debenture.

SECTION 2.5 ISSUE OF DEBENTURES.

(1)      Debentures in the aggregate maximum principal amount of ONE BILLION,
         TWO HUNDRED SEVENTY-NINE MILLION, FIVE HUNDRED AND THIRTY THOUSAND
         Dollars ($1,279,530,000.00) in lawful money of Canada shall be executed
         by the Corporation and, forthwith after such execution, shall be
         delivered to the Trustee and shall be certified by the Trustee and
         delivered to or to the order of the Corporation upon receipt by the
         Trustee of the following:

         (a)      A Written Order for the certification and delivery of such
                  Debentures;

         (b)      An Opinion of Counsel (who may rely, as to all factual
                  matters, in the absence of knowledge to the contrary, upon an
                  Officers' Certificate and which may be subject to customary
                  qualifications) in favour of the Trustee to the effect that:

<PAGE>   19
                                      -13-

                  (i)      All conditions precedent provided for herein relating
                           to the authorization, execution, authentication and
                           delivery of the Debentures applied for have been
                           complied with; and

                  (ii)     The Debentures applied for have been duly and validly
                           authorized, executed and delivered by the Corporation
                           and, upon certification and delivery thereof by the
                           Trustee, will be valid and legally binding
                           obligations of the Corporation, entitled to the
                           benefits hereof and subject to the terms hereof; and

         (c)      An Officers' Certificate stating that all conditions precedent
                  provided for herein relating to the authorization, issuance,
                  execution, certification and delivery of the Debentures
                  applied for have been complied with.

(2)      The Trustee, prior to the certification of the Debentures, shall not be
         bound to make any enquiry or investigation as to the correctness of the
         matters set forth in any of the opinions, certificates or other
         documents required by the provisions hereof. The Trustee may rely and
         shall be protected in acting upon any such opinions, certificates or
         other documents, but may in its discretion require additional evidence
         before acting or relying thereon.

SECTION 2.6 CONCERNING INTEREST.

         Wherever in this Indenture there is mention in any context of the
payment of interest, such mention shall be deemed to include mention of the
payment of interest on amounts in default to the extent that, in such context,
such interest is, was, or would be payable and express mention of interest on
amounts in default in any provisions hereof shall not be construed as excluding
such interest in those provisions hereof where such express mention is not made.

SECTION 2.7 EXECUTION OF DEBENTURES.

         The Debentures shall be signed by the President of the Corporation and
by the Secretary of the Corporation. The signatures of such officers may be
reproduced in facsimile and Debentures bearing such facsimile signatures shall
be binding upon the Corporation, as if they had been manually signed by such
officers. Notwithstanding that any of the individuals whose manual or facsimile
signature appears on any Debenture as one of such officers may no longer hold
office at the date of this Indenture or at the date of such Debenture or at the
date of certification and delivery thereof, any Debenture signed as aforesaid
shall be valid and binding upon the Corporation and entitled to the benefit
hereof.

SECTION 2.8 CERTIFICATION BY THE TRUSTEE.

(1)      No Debenture shall be issued or, if issued, shall be obligatory or
         entitle the Holder to the benefit hereof, until it has been certified
         by or on behalf of the

<PAGE>   20
                                      -14-

         Trustee substantially in the form of the certificate set out in
         Schedule "A" hereto, or in some other form approved by the Trustee, and
         such certification by the Trustee upon any Debenture shall be
         conclusive evidence that the Debenture so certified has been duly
         issued hereunder and is a valid obligation of the Corporation and that
         the Holder is entitled to the benefit hereof.

(2)      The certificate of the Trustee on Debentures issued hereunder shall not
         be construed as a representation or warranty by the Trustee as to the
         validity of this Indenture or of the Debentures (except the due
         certification thereof) or as to the performance by the Corporation or
         the Guarantor of their obligations under this Indenture and the Trustee
         shall in no respect be liable or answerable for the use made of the
         Debentures or any of them or of the proceeds thereof (other than
         disbursement of amounts received from the Corporation in respect of the
         payment of interest or principal pursuant to this Indenture).

SECTION 2.9 REGISTRATION OF DEBENTURES.

(1)      The Corporation shall cause to be kept by and at the principal office
         of the Trustee in the City of Toronto, Ontario a Debenture register in
         which shall be entered the names and latest known addresses of the
         Holders of Debentures and the other particulars, prescribed by law, of
         the Debentures held by them respectively and of all transfers of
         Debentures. Such name registration shall be noted on the Debentures by
         the Trustee or other registrar. No transfer of a Debenture shall be
         effective as against the Corporation unless made on the Debenture
         register and made by the registered Holder or its executors or
         administrators or other legal representatives or its or their attorney
         duly appointed by an instrument in writing in form and execution
         satisfactory to the Trustee, upon compliance with such requirements as
         the Trustee or other registrar may prescribe, and unless such transfer
         shall have been duly noted on such Debenture by the Trustee or other
         registrar.

(2)      The Holder of a Debenture may at any time and from time to time have
         such Debenture transferred at the place at which the register is kept
         pursuant to the provisions of this Section and in accordance with such
         reasonable regulations as the Trustee may prescribe.

(3)      The party requesting any transfer pursuant to this Section 2.9 shall,
         as a condition precedent to such transfer, reimburse the Trustee for
         any stamp or other security transfer tax or governmental charge
         required to be paid in respect of such transfer and, in addition, pay a
         reasonable charge for the Trustee's services for each Debenture
         transferred and for each Debenture issued upon such transfer.

(4)      Neither the Corporation nor the Trustee nor any registrar shall be
         required to transfer or exchange (pursuant to Section 2.12) any
         Debentures on any Interest

<PAGE>   21
                                      -15-

         Payment Date or Redemption Date or for a period of 15 Business Days
         preceding any Interest Payment Date or Redemption Date.

(5)      None of the Trustee or any registrar for the Debentures or the
         Corporation shall be charged with notice of or be bound to see to the
         execution of any trust, whether express, implied or constructive, in
         respect of any Debenture and may transfer any Debenture on the
         direction of the Holder thereof, whether named as trustee or otherwise,
         as though that Person were the beneficial owner thereof.

SECTION 2.10 PERSON ENTITLED TO PAYMENT.

(1)      The Person in whose name any Debentures shall be registered shall be
         deemed the owner thereof for all purposes of this Indenture and payment
         of or on account of the principal and accrued interest on such
         Debentures shall be made only to or upon the order in writing of such
         Holder thereof and such payment shall be a good and sufficient
         discharge to the Trustee and any registrar and to the Corporation and
         any paying agent for the amount so paid.

(2)      Subject to the exercise of the Share Redemption Right pursuant to
         Section 3.6 or a Holder's conversion right pursuant to Section 4.1, as
         the interest on the Debentures becomes payable (except interest payable
         at maturity, conversion or on redemption which may, at the option of
         the Corporation, be paid upon presentation and surrender of such
         Debentures for payment), the Corporation, at least three (3) days prior
         to each Interest Payment Date, shall forward or cause to be forwarded
         by prepaid post (or in the event of mail service interruption by such
         other means as the Trustee and the Corporation shall determine to be
         appropriate), to the Holder of each Debenture, at its address appearing
         on the register referred to in Section 2.9, or in the case of joint
         Holders, to the one whose name appears first on such register, a cheque
         for such interest (less any tax required by law to be deducted) payable
         to the order of such Holder or Holders and negotiable at par at the
         City of Toronto, Ontario. The forwarding of such cheque shall satisfy
         and discharge the liability for the interest on the Debentures to the
         extent of the sums represented thereby (plus the amount of any tax
         deducted as aforesaid), unless such cheque be not paid on presentation;
         provided that, in the event of the non-receipt of such cheque by the
         Holder, or the loss or destruction thereof, the Corporation, upon it
         and the Trustee being furnished with reasonable evidence of such
         non-receipt, loss or destruction and indemnity reasonably satisfactory
         to them shall issue to such Holder a replacement cheque for the amount
         of such cheque.

(3)      The registered Holder of any Debenture shall be entitled to the
         principal and interest evidenced by such Debenture, free from all
         equities or rights of set-off, compensation or counterclaim between the
         Corporation and the original or any intermediate Holder thereof and all
         Persons may act accordingly and a transferee

<PAGE>   22
                                      -16-

         of a Debenture shall, after the appropriate form of transfer is lodged
         with the Trustee or other registrar and upon compliance with all other
         conditions in that behalf required by this Indenture or by any
         conditions contained in such Debenture or by law, be entitled to be
         entered on the Debenture register as the owner of such Debenture, free
         from all equities or rights of set-off, compensation or counterclaim
         between the Corporation and its transferor or any previous Holder
         thereof, save in respect of equities of which the Corporation is
         required to take notice by statute or by order of a court of competent
         jurisdiction.

(4)      Where Debentures are registered in more than one name, the principal
         and interest from time to time payable in cash in respect thereof may
         be paid by cheque payable to the order of all such Holders, failing
         written instructions from them to the contrary, and such payment shall
         be a valid discharge to the Trustee and any registrar and to the
         Corporation and any paying agent for the amount so paid.

SECTION 2.11 REPLACEMENT OF DEBENTURES.

(1)      If any of the Debentures shall become mutilated or defaced, or be lost,
         stolen or destroyed, the Corporation shall issue and thereupon the
         Trustee shall certify and deliver a new Debenture of like date and
         tenor and bearing the same legends, if any, as the one mutilated,
         defaced, lost, stolen or destroyed in exchange for, in place of and
         upon cancellation of such mutilated or defaced Debenture or in lieu of
         and in substitution for such lost, stolen or destroyed Debenture. The
         new Debenture shall be entitled to the benefit hereof and shall rank
         equally in accordance with its terms with all other Debentures issued
         hereunder.

(2)      The applicant for the issue of a new Debenture shall bear the cost of
         the issue thereof and in case of loss, destruction or theft shall, as a
         condition precedent to the issue thereof, furnish to the Corporation
         and the Trustee such evidence of ownership and of the loss, destruction
         or theft of the Debenture so lost, destroyed or stolen as shall be
         satisfactory to the Corporation and the Trustee in their discretion and
         such applicant shall also be required to furnish indemnity in amount
         and form satisfactory to the Corporation and the Trustee in their
         discretion, and shall pay the reasonable charges of the Corporation and
         the Trustee in connection therewith.

SECTION 2.12 EXCHANGE OF DEBENTURES.

(1)      Debentures in any denomination may be exchanged at any time for
         Debentures of the same aggregate principal amount in any other
         authorized denomination. Debentures may be so exchanged at the place at
         which the register is maintained pursuant to Section 2.9 or other
         convenient place of delivery by the Corporation and acceptable to the
         Trustee.

<PAGE>   23
                                      -17-

(2)      The Corporation shall execute and the Trustee shall certify all
         Debentures necessary to carry out exchanges pursuant to this Section
         2.12. All Debentures surrendered for exchange shall be cancelled.

(3)      The party requesting any exchange pursuant to this Section 2.12 shall,
         as a condition precedent to such exchange, reimburse the Trustee for
         any stamp or other security transfer tax or governmental charge
         required to be paid in respect of such exchange or the related issue of
         Debentures and, in addition, pay a reasonable charge for the Trustee's
         services for each Debenture exchanged and a reasonable charge for each
         Debenture issued upon such exchange.

(4)      Notwithstanding the foregoing provisions, no charge for the Trustee's
         services shall be made to a Debentureholder for any exchange or
         transfer of any Debenture applied for within a period of 60 days from
         the date hereof.

SECTION 2.13 REGISTER OPEN FOR INSPECTION.

         The Debenture register shall at all reasonable times, and at such
reasonable costs as established by the Trustee or other registrar, be open for
inspection by the Corporation, the Guarantor, the Trustee or any
Debentureholder. The Trustee and every registrar shall from time to time when
requested in writing to do so by the Corporation, the Guarantor or by the
Trustee furnish the Corporation, the Guarantor or the Trustee, as the case may
be, with a list of names and addresses of Holders of Debentures entered on the
register kept by it and showing the principal amount and serial numbers of the
Debentures held by each such Holder.

SECTION 2.14 PAYMENT OF INTEREST AND PRINCIPAL.

(1)      Except as herein otherwise provided, all sums which may at any time
         become payable, whether at maturity, conversion, redemption or on a
         declaration of acceleration or otherwise, on account of any Debenture
         or any interest thereon, shall be payable at the option of the Holder
         at the place at which the register referred to in Section 2.9 is
         maintained.

(2)      Whenever any payment of principal or interest to be made hereunder
         shall be stated to be due on a day which is not a Business Day in the
         place in which the register referred to in Section 2.9 is maintained,
         then the Debentureholder shall not be entitled to payment of the amount
         due in such place until the next succeeding Business Day in that place
         and will not be entitled to interest or other payment in respect of
         such delay.

SECTION 2.15 RANK AND SUBORDINATION.

         The Debentures certified and issued under this Indenture rank pari
passu with one another, in accordance with their tenor without discrimination,
preference or priority. The payment of all amounts owing hereunder including,
without limitation,

<PAGE>   24
                                      -18-

the principal of and interest on the Debentures is expressly subordinated to the
prior payment in full of Senior Liabilities, as provided in Article 6.

SECTION 2.16 NOTICE TO DEBENTUREHOLDERS.

(1)      All notices to be given hereunder with respect to the Debentures shall
         be deemed to be validly given to the Debentureholders if sent by
         courier or by first class mail, postage prepaid, by letter or circular
         addressed to such Holders at their post office addresses appearing in
         the register referred to in Section 2.9. Any notice so given by courier
         or mail shall be deemed to have been received one (1) Business Day
         after the day it was given to the courier or three (3) Business Days
         after the day of mailing. If by reason of any interruption of mail
         service, actual or threatened, any notice to be given to all
         Debentureholders would be unlikely to reach substantially all of the
         Debentureholders such notice may be given by publication once (twice in
         the case of a notice of a meeting of Debentureholders) in any daily
         English language newspaper of general circulation in all provinces of
         Canada and once in a daily French language newspaper of general
         circulation in the Province of Quebec. Any notice so given by
         publication shall be deemed to have been received on the day on which
         publication shall have been effected at least once in each of the
         newspapers in which publication was required.

(2)      Accidental error or omission in giving notice or accidental failure to
         send notice by mail or courier to any Debentureholder shall not
         invalidate any action or proceeding founded such notice.

(3)      All notices with respect to any Debenture may be given to whichever one
         of the Holders thereof (if more than one) is named first in the
         Debenture register and any notice so given shall be sufficient notice
         to all Holders of such Debenture.

(4)      In determining under any provision hereof the date when notice of any
         meeting or other event must be given, the date of giving the notice
         shall be included and the date of the meeting or other event shall be
         excluded.

SECTION 2.17 NOTICE TO THE TRUSTEE.

         Any notice to the Trustee under any provision of this Indenture must be
in writing and may be made or given by personal delivery, by registered mail,
postage prepaid, or by transmittal by facsimile or other electronic means of
communication addressed to the Trustee at 320 Bay Street, P.O. Box 1, Toronto,
Ontario, Canada M5H 4A6 or facsimile (416) 643-5570, Attention: Vice President,
Corporate Trust Services. Except as otherwise expressly provided herein, any
notice given by personal delivery or registered mail shall be deemed to have
been given and received on the day upon which it was delivered or if made or
given by facsimile or other electronic means of communication before 5:00 p.m.
(Toronto time), on the day of transmittal thereof, provided that if such day is
not a Business Day or if such notice was made or given after

<PAGE>   25
                                      -19-

5:00 p.m. (Toronto time), such notice shall be deemed to have been given and
received on the first Business Day after the day of transmittal thereof.

SECTION 2.18 NOTICE TO THE CORPORATION AND TO THE GUARANTOR.

         Any notice to the Corporation or to the Guarantor under any provision
of this Indenture must be in writing and may be made or given by personal
delivery, by registered mail, postage prepaid, or by transmittal by facsimile or
other electronic means of communication addressed to the Corporation or to the
Guarantor c/o AMVESCAP PLC at 11 Devonshire Square, London, England, EC2M 2Y2,
or facsimile (011) 44-207-929-5889, Attention: Corporate Secretary, with a copy
to AMVESCAP Corporation at 1315 Peachtree Street, N.E., Suite 500, Atlanta,
Georgia, USA 30309 or facsimile (404) 724-4280 Attention: Chief Financial
Officer. Except as otherwise expressly provided herein, any notice given by
personal delivery or registered mail shall be deemed to have been given and
received on the day upon which it was delivered or if made or given by facsimile
or other electronic means of communication before 5:00 p.m. (London, England
time), on the day of transmittal thereof, provided that if such day is not a
Business Day or if such notice was made or given after 5:00 p.m. (London,
England time), such notice shall be deemed to have been given and received on
the first Business Day after the day of transmittal thereof.

SECTION 2.19 CHANGE IN ADDRESS.

         Each of the Corporation, the Guarantor or the Trustee may from time to
time notify the other parties of a change in address or facsimile number which
thereafter, until changed by like notice, shall be the address or facsimile
number of that party for all purposes of this Indenture.

SECTION 2.20 MAIL SERVICE INTERRUPTION.

         If by reason of any interruption of mail service, actual or threatened,
any notice to be given to the Trustee, to the Corporation or to the Guarantor
would be unlikely to reach its destination in a timely manner, such notice, if
sent by mail, shall be valid and effective only when received by an officer of
the party to which it is addressed.

                                    ARTICLE 3
                      REDEMPTION, PURCHASE AND CANCELLATION

SECTION 3.1 REDEMPTION OF DEBENTURES.

         The Corporation shall have the right at its option to conditionally or
unconditionally redeem all, but not less than all, of the Debentures outstanding
hereunder at any time before the Maturity Date at a date chosen by the
Corporation for redemption (the "REDEMPTION DATE") upon payment in lawful money
of Canada of an amount, for each $1,000 principal amount of Debentures to be
redeemed, equal to the aggregate of (i) $1,200; plus (ii) all accrued and unpaid
interest on each such $1,000

<PAGE>   26
                                      -20-

principal amount to but excluding the Redemption Date (collectively, the
"REDEMPTION AMOUNT"). The Corporation may satisfy the Redemption Amount in cash
or by the delivery of a number of Freely Tradeable Exchangeable Shares as
provided in Section 3.6. The Corporation may only exercise its right to
conditionally redeem all of the Debentures outstanding hereunder if there is an
Offer and if the only condition to the Corporation's exercise of its right to
redeem all of the Debentures outstanding hereunder is the completion of such
Offer.

SECTION 3.2 PLACES OF PAYMENT.

         The Redemption Amount (less any tax required by law to be deducted)
will be payable upon presentation and surrender of the Debentures called for
redemption at the place where the register is maintained pursuant to Section 2.9
and at any other places specified in the Redemption Notice.

SECTION 3.3 NOTICE OF REDEMPTION.

(1)      Notice of redemption of the Debentures shall be given to Holders at
         least 20 days and not more than 30 days prior to the Redemption Date
         (the "REDEMPTION NOTICE") in the form set forth in Schedule "B" hereto
         and in the manner provided in Section 2.16. Every such notice shall
         specify the aggregate principal amount of Debentures called for
         redemption, the Redemption Date, the Redemption Amount and the places
         of payment and shall state that, subject to Section 3.4, interest upon
         the principal amount of Debentures called for redemption shall cease to
         be payable from and after the Redemption Date. Contemporaneously with
         the giving of such Redemption Notice, the Corporation shall issue a
         press release over newswire services in Canada and the United Kingdom
         advising Debentureholders that such a Redemption Notice has been given
         and containing substantially the information contained in such
         Redemption Notice.

(2)      The Corporation shall notify the Trustee in writing that the
         Corporation is considering redeeming the Debentures at least 5 Business
         Days prior to the date the Corporation may want the Trustee to send a
         Redemption Notice to Debentureholders.

SECTION 3.4 DEBENTURES DUE ON REDEMPTION DATE.

         Upon a Redemption Notice being given in accordance with Section 3.3,
the Redemption Amount shall be and become due and payable on the Redemption Date
specified in such notice and with the same effect as if it were the Maturity
Date of such Debentures and, from and after such Redemption Date, interest shall
cease, unless payment of the Redemption Amount shall not be made on presentation
for surrender of such Debentures at the place specified in Section 3.2 on or
after the Redemption Date and prior to the setting aside of the Redemption
Amount pursuant to Article 10.

<PAGE>   27
                                      -21-

SECTION 3.5 DEPOSIT OF REDEMPTION MONIES.

         Upon Debentures being called for redemption as provided for in Section
3.3 hereof, but subject to Section 3.6, the Corporation shall deposit with the
Trustee or any paying agent to the order of the Trustee or for the account of
the Trustee, on or prior to the Redemption Date specified in the Redemption
Notice, such sums as are sufficient to pay the Redemption Amount of the
Debentures (less any tax required by law to be deducted). From the sums so
deposited, the Trustee shall pay or cause to be paid to the Holders, upon
surrender of the Debentures, the Redemption Amount thereof (less any tax
required by law to be deducted).

SECTION 3.6 RIGHT TO REPAY REDEMPTION AMOUNT IN EXCHANGEABLE SHARES.

(1)      Subject to the other provisions of this Section 3.6, the Corporation
         may, at its option, elect to satisfy its obligation to pay the
         Redemption Amount by delivering to the Trustee on the Redemption Date
         that number of Freely Tradeable Exchangeable Shares obtained by
         dividing the Redemption Amount by 95% of the Current Market Price on
         the date of the Redemption Notice (the "SHARE REDEMPTION RIGHT").

(2)      The Corporation shall exercise the Share Redemption Right by so
         specifying in the Redemption Notice.

(3)      The Corporation's right to exercise the Share Redemption Right shall be
         conditional upon the following conditions being met on the fifth
         Business Day preceding the Redemption Date:

         (a)      The qualification of the Exchangeable Shares to be issued on
                  exercise of the Share Redemption Right as Freely Tradeable;

         (b)      The listing (or the functional equivalent thereof) of such
                  additional Exchangeable Shares on the TSE;

         (c)      The Corporation being a reporting issuer in good standing (or
                  its equivalent) under Applicable Securities Legislation where
                  the distribution of such Exchangeable Shares occurs and where
                  such legislation recognizes the status of a reporting issuer
                  (or its equivalent);

         (d)      No Event of Default shall have occurred and be continuing;

         (e)      The receipt by the Trustee of an Officers' Certificate stating
                  that conditions (a), (b), (c) and (d) above have been
                  satisfied and setting forth the number of Exchangeable Shares
                  to be delivered for each $1,000 principal amount of Debentures
                  and the Current Market Price on the date of the Redemption
                  Notice; and

<PAGE>   28
                                      -22-

         (f)      The receipt by the Trustee of an Opinion of Counsel to the
                  effect that such Exchangeable Shares have been duly authorized
                  and, when issued and delivered pursuant to the terms of this
                  Indenture in payment of the Redemption Amount of the
                  Debentures outstanding, will be validly issued as fully paid
                  and non-assessable, that conditions (a) and (b) above have
                  been satisfied and that, relying exclusively on certificates
                  of good standing issued by the relevant securities
                  authorities, condition (c) above is satisfied, except that
                  such opinion in respect of condition (c) need not be expressed
                  with respect to those provinces where certificates of good
                  standing are not issued by the securities authorities.

         If the foregoing conditions are not satisfied prior to the close of
         business (in the City of Toronto, Ontario) on the fifth Business Day
         preceding the Redemption Date, the Corporation shall pay the Redemption
         Amount in cash in accordance with Section 3.5 and shall issue a press
         release over newswire services in Canada and the United Kingdom to such
         effect.

(4)      In the event that the Corporation duly exercises its Share Redemption
         Right, on or before the Redemption Date, the Corporation shall deliver
         or cause to be delivered to the Trustee for delivery to and on account
         of the Holders upon presentation and surrender of the Debentures for
         payment on redemption at the place where the register is maintained
         pursuant to Section 2.9 or any other place specified in the Redemption
         Notice, certificates representing the Freely Tradeable Exchangeable
         Shares to which the Holders are entitled.

(5)      No fractional Exchangeable Shares shall be delivered upon the exercise
         of the Share Redemption Right but, in lieu thereof, the Corporation
         shall pay to the Trustee for the account of the Holders, at the time
         contemplated in Section 3.6(4), the cash equivalent thereof determined
         on the basis of the Current Market Price on the date of the Redemption
         Notice (less any tax required by law to be deducted).

(6)      A Holder shall be treated as the shareholder of record of the
         Exchangeable Shares issued on due exercise by the Corporation of the
         Share Redemption Right effective immediately after the close of
         business (in the City of Toronto, Ontario) on the Redemption Date, and
         shall be entitled to all substitutions therefor, all income earned
         thereon or accretions thereto and all dividends or distributions
         (including stock dividends and dividends or distributions in kind)
         thereon and arising thereafter, and in the event that the Trustee
         receives the same, it shall hold the same in trust for the benefit of
         such Holder.

(7)      The Corporation shall at all times reserve and keep available out of
         its authorized Exchangeable Shares (if the number thereof is or becomes
         limited) solely for the purpose of issue and delivery upon the exercise
         of the Share Redemption Right

<PAGE>   29
                                      -23-

         as provided herein, and shall issue to Debentureholders to whom
         Exchangeable Shares will be issued pursuant to exercise of the Share
         Redemption Right, such number of Exchangeable Shares as shall be
         issuable in such event. All Exchangeable Shares which shall be so
         issuable shall be duly and validly issued as fully paid and
         non-assessable.

(8)      The Corporation shall comply with all Applicable Securities Legislation
         regulating the Corporation and the issue and delivery of Exchangeable
         Shares upon exercise of the Share Redemption Right and shall cause to
         be listed and posted for trading (or the functional equivalent thereof)
         such Exchangeable Shares on the TSE.

(9)      The Corporation shall from time to time promptly advise the Trustee in
         writing of, and pay, or make provision satisfactory to the Trustee for
         the payment of, all taxes and charges which may be imposed by the laws
         of Canada or any province thereof (except income tax, capital gains
         tax, withholding tax or security transfer tax, if any) which shall be
         payable with respect to the issuance or delivery of Exchangeable Shares
         to Holders upon exercise of the Share Redemption Right pursuant to the
         terms of the Debentures and of this Indenture.

(10)     If the Corporation elects to satisfy its obligation to pay the
         Redemption Amount by delivering Exchangeable Shares in accordance with
         this Section 3.6 and if the Redemption Amount (or any portion thereof)
         to which a Holder is entitled is subject to withholding taxes, the
         Corporation, for the account of the Holder, shall sell, or cause to be
         sold, through investment banks, brokers or dealers selected by the
         Corporation, out of the Exchangeable Shares issued by the Corporation
         for this purpose, such number of Exchangeable Shares that is sufficient
         to yield net proceeds (after payment of all costs) to cover the amount
         of taxes required to be withheld, and shall remit the same, or cause
         same to be remitted on behalf of the Corporation, to the proper tax
         authorities within the period of time prescribed for this purpose under
         applicable laws.

SECTION 3.7 FAILURE TO SURRENDER DEBENTURES CALLED FOR REDEMPTION.

         If the Holder of any Debentures called for redemption in accordance
with Section 3.3 should, within 30 days from the Redemption Date, fail to
surrender any of such Debentures or fail within such time to (i) accept cash or
Exchangeable Shares, as the case may be, in satisfaction of the Redemption
Amount payable in respect thereof; or (ii) give such receipt therefor, if any,
as the Trustee may require, such cash or Exchangeable Shares, as the case may
be, shall be set aside in trust for such Holder, in accordance with Article 10
and Section 14.3, and such setting aside shall for all purposes be deemed a
payment to such Holder of the cash or Exchangeable Shares so set aside, and to
that extent, such Debentures shall thereafter not be considered as outstanding
hereunder and such Holder shall have no right, as of the Redemption Date, except
to

<PAGE>   30
                                      -24-

receive payment out of the cash or Exchangeable Shares so deposited (or, after
redemption or purchase of the Exchangeable Shares pursuant to their terms or to
the terms of the Plan, AMVESCAP Ordinary Shares), upon surrender of its
Debentures, without interest thereon.

SECTION 3.8 PURCHASE OF DEBENTURES.

(1)      Provided that no Event of Default has occurred and is continuing, the
         Corporation may purchase all or any of the Debentures in the open
         market (which shall include purchase from or through an investment
         dealer or a firm holding membership on a Recognized Stock Exchange) or
         by tender or by private contract at any price, subject to compliance
         with Applicable Securities Legislation regarding issuer bid
         requirements.

(2)      If, upon an invitation for tenders, more Debentures than the
         Corporation is prepared to accept are tendered at the same lowest
         price, the Debentures to be purchased by the Corporation will be
         selected by the Trustee in such manner (which may include pro rata, by
         lot or by random selection by computer) as the Trustee may deem
         equitable, from the Debentures tendered by each tendering
         Debentureholder who tendered at such lowest price. For this purpose,
         the Trustee may make, and from time to time amend, regulations with
         respect to the manner in which Debentures may be so selected and
         regulations so made shall be valid and binding upon all
         Debentureholders and, notwithstanding the fact that, as a result
         thereof, one or more of such Debentures become subject to purchase in
         part only. The Holder of any Debenture of which a part only is
         purchased, upon surrender of such Debenture for payment, shall be
         entitled to receive, without expense to such Holder, a new Debenture
         for the unpurchased part so surrendered and the Trustee shall certify
         and deliver such new Debenture upon receipt of the Debenture so
         surrendered.

SECTION 3.9 CANCELLATION OF PURCHASED DEBENTURES.

         All Debentures redeemed or purchased in whole or in part pursuant to
this Article 3 shall be forthwith delivered to and cancelled by the Trustee and
may not be reissued or resold and no Debentures shall be issued in substitution
therefor.

                                    ARTICLE 4
                      CONVERSION AND SHARE REPAYMENT RIGHT

SECTION 4.1 CONVERSION RIGHT.

(1)      Each Holder shall have the right, at its option, at any time and from
         time to time, to convert as of and with effect on the date specified by
         such Holder in its Conversion Notice (such date a "CONVERSION DATE"),
         which date shall be not less than four Business Days and not more than
         15 Business Days from the

<PAGE>   31
                                      -25-

         day the Trustee receives such Conversion Notice, each $1,000 principal
         amount of its Debentures into that number of Exchangeable Shares equal
         to the Conversion Number in effect on the date of the Conversion
         Notice, all on the terms and subject to the conditions provided in this
         Article 4. For greater certainty, the date of the Conversion Notice is
         (and shall be deemed to be) the date the Holder delivers such
         Conversion Notice to the Trustee (subject to Section 4.1(2)) as opposed
         to the Conversion Date (which date shall be a later date specified as
         aforesaid in such Conversion Notice).

(2)      In order to exercise the right to convert provided pursuant to Section
         4.1(1), the Holder will be required to deliver to the Trustee, at the
         place at which the register is maintained pursuant to Section 2.9, a
         conversion notice (the "CONVERSION NOTICE") in the form set forth in
         Schedule "C" hereto duly completed and executed by the Holder or its
         executors or administrators or other legal representatives or its or
         their attorney duly appointed by instrument in form and execution
         satisfactory to the Trustee, together with the related Debentures. The
         Trustee shall provide a copy of each Conversion Notice that it receives
         to the Corporation as soon as reasonably practicable and in any event
         by 5:00 p.m. (in the place at which the register is maintained pursuant
         to Section 2.9) on the Business Day immediately following the Business
         Day on which such notice is received by the Trustee. A Conversion
         Notice received by the Trustee after 4:30 p.m. (in the place at which
         the register is maintained pursuant to Section 2.9) on any day shall be
         deemed to have been received by the Trustee on the first Business Day
         after such day.

(3)      The Conversion Notice shall specify the principal amount of Debentures
         to be converted (to be not more than the aggregate principal amount of
         the Debentures delivered to the Trustee), provided that Debentures may
         only be converted in respect of principal amounts of $1,000 and
         integral multiples thereof.

(4)      On each Conversion Date, provided that it has not elected to pay the
         Conversion Value in cash pursuant to Section 4.2, the Corporation shall
         ensure that the following conditions are met:

         (a)      The qualification of the Exchangeable Shares to be issued on
                  conversion as Freely Tradeable;

         (b)      The listing (or the functional equivalent thereof) of such
                  additional Exchangeable Shares on the TSE;

         (c)      The Corporation being a reporting issuer (or its equivalent)
                  in good standing under Applicable Securities Legislation where
                  the distribution of such Exchangeable Shares occurs and where
                  such legislation recognizes the status of a reporting issue
                  (or its equivalent);

<PAGE>   32
                                      -26-

         (d)      No Event of Default shall have occurred and be continuing; and

         (e)      The receipt by the Trustee of an Officers' Certificate stating
                  that conditions (a), (b), (c) and (d) above have been
                  satisfied and setting forth the number of Exchangeable Shares
                  to be delivered for each $1,000 principal amount of Debentures
                  and the calculation of the Conversion Number as of the date of
                  the applicable Conversion Notice.

         If the foregoing conditions are not satisfied prior to the close of
         business (in the City of Toronto, Ontario) on such Conversion Date, the
         Corporation shall pay in cash the Conversion Value of the Debentures to
         be converted on such Conversion Date, together with such other amounts
         as are contemplated and payable in accordance with Section 4.4 (less
         any tax required by law to be deducted), unless the Holder of such
         Debenture waives the conditions which are not satisfied.

(5)      If a Holder has elected to convert Debentures in accordance with this
         Section 4.1 and if the Conversion Value (or any portion thereof) to
         which a Holder is entitled is subject to withholding taxes, the
         Corporation, for the account of the Holder, shall sell, or cause to be
         sold, through investment banks, brokers or dealers selected by the
         Corporation, out of the Exchangeable Shares issued by the Corporation
         pursuant to this Section 4.1, such number of Exchangeable Shares that
         is sufficient to yield net proceeds (after payment of all costs) to
         cover the amount of taxes required to be withheld, and shall remit
         same, or cause same to be remitted on behalf of the Corporation, to the
         proper tax authorities within the period of time prescribed for this
         purpose under applicable laws.

SECTION 4.2 RIGHT TO PAY CONVERSION VALUE IN CASH IN LIEU OF CONVERSION.

(1)      If a Holder elects to convert its Debentures on a Conversion Date, the
         Corporation shall have the right to elect to pay such Holder, in lieu
         of delivering Exchangeable Shares on conversion, the Conversion Value
         (as of the date of the applicable Conversion Notice) for each $1,000
         principal amount of Debentures tendered for conversion, together with
         such other amounts as are contemplated and payable in accordance with
         Section 4.4, in cash in lawful money of Canada (less any tax required
         by law to be deducted).

(2)      Without limiting the rights of the Corporation pursuant to Section 4.3,
         the Corporation shall exercise its right pursuant to Section 4.2(1) by
         notifying the Trustee and the Holder as soon as reasonably practicable
         (and in any event by transmitting such notice to the Trustee by
         facsimile or other means of electronic communication by 5:00 p.m.
         (London, England time) on the second Business Day after receipt by the
         Corporation of the applicable Conversion Notice and by depositing such
         notice, addressed to the Holder, in the mail or with a courier on or
         before the third Business Day after receipt by the Corporation of the

<PAGE>   33
                                      -27-

         applicable Conversion Notice) that the Corporation elects to pay the
         Conversion Value in cash to such Holder in lieu of delivering
         Exchangeable Shares on conversion. If the Corporation determines not to
         exercise its right pursuant to Section 4.2(1) it shall so advise the
         Trustee as soon as reasonably practicable (and in any event by
         transmitting such notice to the Trustee by facsimile or other means of
         electronic communication by 5:00 p.m. (London, England time) on the
         second Business Day after receipt by the Corporation of the applicable
         Conversion Notice. If no notice is transmitted to the Trustee pursuant
         to this Section 4.2(2) by 5:00 p.m. (London, England time) on the
         second Business Day following the receipt by the Corporation of the
         applicable Conversion Notice, the Corporation shall be deemed to have
         notified the Trustee that it has not elected to exercise its right
         pursuant to Section 4.2(1). After the Trustee has received any such
         notice from the Corporation (or been deemed to have been so notified),
         the Trustee shall respond to any inquiries it receives from such Holder
         concerning whether or not the Corporation has elected to pay the
         Conversion Value in cash.

SECTION 4.3 RIGHT TO REPAY PRINCIPAL AMOUNT IN EXCHANGEABLE SHARES ON MATURITY.

(1)      The Corporation shall have the right to elect to satisfy the obligation
         to repay on the Maturity Date the principal amount of all, but not less
         than all, of the Debentures outstanding by delivering to the Trustee,
         for each $1,000 principal amount of the Debentures, that number of
         Freely Tradeable Exchangeable Shares equal to the number obtained by
         dividing $1,000 by 95% of the Current Market Price on the Maturity Date
         (the "SHARE REPAYMENT RIGHT").

(2)      The Corporation shall send to the Debentureholders in the manner
         provided in Section 2.16, at least 10 Business Days and not more than
         20 Business Days prior to the Maturity Date, a notice (the "MATURITY
         NOTICE") in the form set forth in Schedule "D-1" hereto together with
         an exercise notice (an "EXERCISE NOTICE") in the form set forth in
         Schedule "D-2" hereto. The Maturity Notice will provide
         Debentureholders with the following options:

         (a)      to convert their Debentures to Exchangeable Shares, only if
                  the AMVESCAP Share Value on the Maturity Date is greater than
                  or equal to $1,000, subject to the right of the Corporation to
                  pay the Conversion Value in cash;

         (b)      to convert their Debentures to Exchangeable Shares, whether or
                  not the AMVESCAP Share Value on the Maturity Date exceeds
                  $1,000, subject to the right of the Corporation to pay the
                  Conversion Value in cash; or

         (c)      to receive payment of the principal amount of the Debentures
                  in cash, subject to exercise by the Corporation of the Share
                  Repayment Right;

<PAGE>   34
                                      -28-

         it being understood, in each case, that all accrued interest, if any,
         shall be paid in cash.

(3)      In order to select an option provided pursuant to Section 4.3(2),
         Debentureholders will be required to deliver to the Trustee at any
         place at which the register is maintained pursuant to Section 2.9 or
         any other place specified in the Maturity Notice before the
         Determination Date an Exercise Notice duly completed and executed by
         the Holder or its executors or administrators or other legal
         representatives or its or their attorney duly appointed by instrument
         in form and execution satisfactory to the Trustee, together with the
         related Debentures. A Debentureholder who does not deliver a duly
         completed Exercise Notice at or before the close of business (in the
         City of Toronto, Ontario) on the Determination Date will be deemed to
         have selected option (a) set out in Section 4.3(2) and the Debentures
         held by such Holders will automatically be converted into Exchangeable
         Shares, subject to the right of the Corporation to pay the Conversion
         Value in cash, if the AMVESCAP Share Value on the Maturity Date is
         greater than or equal to $1,000.

(4)      The Corporation shall specify in the Maturity Notice whether it will
         deliver Exchangeable Shares on conversion of the Debentures or, in lieu
         of delivering Exchangeable Shares on conversion, it elects to pay the
         Conversion Value in cash (less any tax required by law to be deducted)
         and whether, if a Holder selects option (c) set out in Section 4.3(2),
         the Corporation will, in lieu of paying cash on maturity, exercise the
         Share Repayment Right and deliver Exchangeable Shares to such Holder.
         If a Holder selects option (c) set out in Section 4.3(2) and the
         Corporation does not exercise the Share Repayment Right, the
         Corporation shall pay to such Holder the principal amount of its
         Debentures in cash on the Maturity Date.

(5)      The Trustee shall, on the Business Day immediately following the
         Determination Date, deliver written notice to the Corporation of the
         aggregate principal amount of Debentures which Holders have elected or
         are deemed to have elected to convert.

(6)      On the Business Day preceding the Maturity Date, if any Debentureholder
         selects (or is deemed to have selected) option (a) or option (b) set
         out in Section 4.3(2) and the Corporation has not exercised its right
         to pay the Conversion Value in cash, or if the Corporation has
         exercised the Share Repayment Right, the Corporation shall ensure that
         the following conditions are met:

         (a)      The qualification of the Exchangeable Shares to be issued on
                  conversion or pursuant to the Share Repayment Right as Freely
                  Tradeable;

<PAGE>   35
                                      -29-

         (b)      The listing (or the functional equivalent thereof) of such
                  additional Exchangeable Shares on the TSE;

         (c)      The Corporation being a reporting issuer (or its equivalent)
                  in good standing under Applicable Securities Legislation where
                  the distribution of such Exchangeable Shares occurs and where
                  such legislation recognizes the status of a reporting issuer
                  (or its equivalent);

         (d)      No Event of Default shall have occurred and be continuing;

         (e)      The receipt by the Trustee of an Officers' Certificate stating
                  that conditions (a), (b), (c) and (d) above have been
                  satisfied and setting forth the number of Exchangeable Shares
                  to be delivered for each $1,000 principal amount of Debentures
                  and the calculation of the Conversion Number; and

         (f)      The receipt by the Trustee of an Opinion of Counsel to the
                  effect that such Exchangeable Shares have been duly authorized
                  and, when issued and delivered pursuant to the terms of this
                  Indenture, will be validly issued as fully paid and
                  non-assessable and, that conditions (a) and (b) above have
                  been satisfied and that, relying exclusively on certificates
                  of good standing issued by the relevant securities
                  authorities, condition (c) above is satisfied, except that
                  such opinion in respect of condition (c) need not be expressed
                  with respect to those provinces where certificates of good
                  standing are not issued by the securities authorities.

         If the foregoing conditions are not satisfied prior to the close of
         business (in the City of Toronto, Ontario) on the Business Day
         preceding the Maturity Date, the Corporation shall pay in cash the
         Conversion Value of the Debentures held by any such Debentureholder
         together with all interest on such Debentures accrued to, but
         excluding, the Maturity Date (less any tax required by law to be
         deducted), unless the Debentureholder waives the conditions which are
         not satisfied.

(7)      In the event that the Corporation exercises its Share Repayment Right,
         or a Debentureholder selects (or is deemed to have selected) option (a)
         or option (b) set out in Section 4.3(2) and the Corporation has not
         exercised its right to pay the Conversion Value in cash, upon
         presentation and surrender of the Debenture for payment on maturity at
         the place where the register is maintained pursuant to Section 2.9 or
         any other place specified in the Maturity Notice, the Corporation shall
         (i) pay or cause to be paid in cash to the Holder thereof all accrued
         and unpaid interest to the Maturity Date and the cash equivalent
         contemplated for fractional shares in Section 4.5, if any, in each case
         less any tax required by law to be deducted; and (ii) deliver or cause
         to be delivered to the Holder thereof,

<PAGE>   36
                                      -30-

         certificates representing the Freely Tradeable Exchangeable Shares to
         which such Holder is entitled.

(8)      If the repayment by delivery of Exchangeable Shares (or any portion
         thereof) to which a Holder is entitled pursuant to this Section 4.3 or
         the conversion of Debentures into Exchangeable Shares pursuant to
         option (a) or option (b) set out in Section 4.3(2) is subject to
         withholding taxes, the Corporation, for the account of the Holder,
         shall sell, or cause to be sold, through investment banks, brokers or
         dealers selected by the Corporation, out of the Exchangeable Shares
         issued by the Corporation pursuant to this Section 4.3, such number of
         Exchangeable Shares that is sufficient to yield net proceeds (after
         payment of all costs) to cover the amount of taxes required to be
         withheld, and shall remit same, or cause same to be remitted on behalf
         of the Corporation, to the proper tax authorities within the period of
         time prescribed for this purpose under applicable laws.

SECTION 4.4 COMPLETION OF CONVERSION.

(1)      As soon as reasonably practicable but in any event on or prior to the
         fifth Business Day after each Conversion Date, the Corporation and/or
         the Trustee shall send by first class mail, postage prepaid, to each
         Holder who has elected to convert its Debentures pursuant to Section
         4.1 on such Conversion Date: (a) a cheque for the Conversion Value of
         each $1,000 principal amount of Debentures which such Holder has
         elected to convert together with interest on such Conversion Value at
         the rate of 6.00% per annum for the period from and including the
         Business Day immediately after such Conversion Date to but excluding
         the day such cheque is deposited in the mail, provided that the
         Corporation has exercised its right pursuant to Section 4.2, or
         certificates for the Exchangeable Shares to which such Holder is
         entitled provided that such Debentureholder has not completed the
         Retraction Request forming part of the Conversion Notice; (b) a cheque
         for interest accrued on such Debentures from the last date to which
         interest has been paid on such Debentures to but excluding the
         Conversion Date; (c) a cheque for the cash equivalent for any
         fractional Exchangeable Share contemplated by Section 4.5 to which such
         Holder is entitled; and (d) if such Holder has elected to convert a
         principal amount of Debentures (the "EXERCISED AMOUNT") which is less
         than the principal amount of the Debentures delivered by such Holder to
         the Trustee with the Holder's Conversion Notice (the "REGISTERED
         AMOUNT"), Debenture(s) registered in the name of such Holder in an
         aggregate principal amount equal to the amount by which the registered
         amount exceeds the exercised amount, less in all cases any tax required
         by law to be deducted.

(2)      All Debentures converted in whole or in part shall be delivered to and
         cancelled by the Trustee in accordance with Article 10 and the Trustee
         shall amend the register maintained by it pursuant to Section 2.9
         accordingly.

<PAGE>   37
                                      -31-

(3)      The Corporation shall provide to the Trustee the certificates for the
         Exchangeable Shares and for the Debentures to be delivered pursuant to
         Section 4.4(1), if any, and pay to the Trustee sufficient funds, by
         certified cheque, bank draft or wire transfer, in a timely manner, to
         permit the Trustee to fulfil its obligations under Section 4.4(1) and
         to make the payments, if any, required by Section 4.2 and Section 4.5.

SECTION 4.5 FRACTIONAL SHARES.

         No fractional Exchangeable Shares shall be delivered upon the
conversion of Debentures or exercise of the Share Repayment Right but, in lieu
thereof, the Corporation shall pay, or cause to be paid, to a Debentureholder
who would otherwise be entitled to a fractional Exchangeable Share the cash
equivalent thereof (determined on the basis of the Current Market Price on the
date of the Conversion Notice or the Maturity Date, as applicable), less any tax
required by law to be deducted.

SECTION 4.6 RELATING TO THE ISSUE OF EXCHANGEABLE SHARES.

(1)      A Holder shall be treated as the shareholder of record of the
         Exchangeable Shares issued on due conversion of its Debentures or due
         exercise by the Corporation of the Share Repayment Right, and the
         issuance of Exchangeable Shares shall be deemed to have occurred for
         all purposes effective immediately after the close of business (in the
         City of Toronto, Ontario) on the Conversion Date, in the case of a
         conversion pursuant to Section 4.1 or on the Maturity Date, in the case
         of the exercise of the Share Repayment Right pursuant to Section 4.3,
         and such Holder shall be entitled to all substitutions therefor, all
         income earned thereon or accretions thereto and all dividends or
         distributions (including stock dividends and dividends or distributions
         in kind) thereon and arising thereafter and in the event that the
         Trustee receives the same, it shall hold the same in trust for the
         benefit of such Holder.

(2)      The Corporation shall at all times reserve and keep available out of
         its authorized Exchangeable Shares (if the number thereof is or becomes
         limited) solely for the purpose of issue and delivery upon the
         conversion of Debentures or the exercise of the Share Repayment Right
         as provided herein, and shall issue to Debentureholders who may
         exercise their conversion rights hereunder or to whom Exchangeable
         Shares shall be issued pursuant to exercise of the Share Repayment
         Right, such number of Exchangeable Shares as shall be issuable in such
         events. All Exchangeable Shares which shall be so issued shall be duly
         and validly issued as fully paid and non-assessable.

(3)      The Corporation shall comply with all Applicable Securities Legislation
         regulating the issue and delivery of Exchangeable Shares upon
         conversion of Debentures or exercise of the Share Repayment Right and
         shall cause to be listed

<PAGE>   38
                                      -32-

         and posted for trading (or the function equivalent thereof) such
         Exchangeable Shares on the TSE.

SECTION 4.7 TAXES AND CHARGES ON THE ISSUE OF EXCHANGEABLE SHARES.

         The Corporation shall from time to time promptly advise the Trustee in
writing of, and pay, or make provision satisfactory to the Trustee for the
payment of, all taxes and charges which may be imposed by the laws of Canada or
any province thereof (except income tax, capital gains tax, withholding tax or
security transfer tax, if any) and which shall be payable with respect to the
issuance or delivery of Exchangeable Shares to Holders upon the conversion of
Debentures or exercise of the Share Repayment Right pursuant to the terms of the
Debentures and this Indenture.

                                    ARTICLE 5
                                   ADJUSTMENTS

SECTION 5.1 ADJUSTMENT UPON SUBDIVISION OR CONSOLIDATION.

         If and whenever at any time after the date hereof, the outstanding
Exchangeable Shares are subdivided or redivided into a greater number of
Exchangeable Shares or are reduced, combined or consolidated into a smaller
number of Exchangeable Shares or upon a distribution of Exchangeable Shares to
all or substantially all holders of Exchangeable Shares by way of a stock
dividend or otherwise (other than an issue of shares to holders of Exchangeable
Shares who have elected to receive dividends in stock in lieu of receiving cash
dividends) (each such event being referred to in this section as a "CHANGE"),
the AMVESCAP Share Rate shall thereafter be adjusted to be equal to the number
of Exchangeable Shares which a holder of that number of Exchangeable Shares
equal to the AMVESCAP Share Rate (prior to such adjustment) would have been
entitled to receive as a result of such change on the effective date of such
change.

SECTION 5.2 REORGANIZATION EVENT.

         If and whenever at any time after the date hereof there shall occur any
Reorganization Event, the AMVESCAP Share Rate and/or the definition of Current
Market Price shall be adjusted or revised, respectively, by the board of
directors of the Guarantor, subject to the prior consent of the Recognized Stock
Exchange on which the Exchangeable Shares are listed, if such consent is
required, in such manner as the board of directors of the Guarantor may in their
sole discretion determine to be fair and equitable in the circumstances to the
Holders, which determination shall be conclusive, and such adjustment shall be
effective as of the effective date of such Reorganization Event.

<PAGE>   39
                                      -33-

SECTION 5.3 ADJUSTMENTS AS A RESULT OF CERTAIN DISTRIBUTIONS AND EXTRAORDINARY
            CASH DIVIDENDS.

(1)      If and whenever at any time after the date hereof, the Corporation
         shall (i) make a distribution of Distributed Property to all or
         substantially all holders of the Exchangeable Shares or (ii) issue
         options, rights or warrants to all or substantially all holders of the
         Exchangeable Shares entitling them to acquire Exchangeable Shares or
         other securities convertible into, or exchangeable for, Exchangeable
         Shares at less than 95% of the Current Market Price prevailing at the
         time of such issue, then the AMVESCAP Share Rate shall thereafter be
         equal to:

                                      1000
                                     -------
                                     (A - B)

         where:

         A equals 1,000 divided by the AMVESCAP Share Rate in effect immediately
         prior to the distribution or issue; and

         B is a number equal to the value of the Distributed Property, or the
         value of such options, rights or warrants, in respect of each
         Exchangeable Share as determined by the Directors, acting reasonably,
         which determination shall be conclusive provided, however, that for
         purposes of this Section 5.3(1) the value of any such rights shall be
         deemed to be zero if at the time the Corporation issues such rights:

         (a)      the Corporation issues to each Debentureholder the number of
                  such rights such Debentureholder would have been entitled to
                  receive if such Debentureholder had converted its Debentures
                  into Exchangeable Shares on the record date for the issue of
                  such rights, provided that, if as a result of the issuance of
                  such rights to a Debentureholder there would be a requirement
                  to file a registration statement with the Securities and
                  Exchange Commission in the United States or a similar document
                  in any other jurisdiction or ongoing disclosure or other
                  requirements in the United States or in any other
                  jurisdiction, the Corporation shall not issue any such rights
                  to such Debentureholder but in lieu of the rights such
                  Debentureholder would otherwise be entitled to receive, such
                  Debentureholder shall be entitled to receive a cash payment
                  equal to the net proceeds (after expenses) received by or on
                  behalf of the Corporation upon the sale of such rights and
                  promptly after the issuance of such rights, the Corporation
                  shall sell such rights or shall cause such rights to be sold;
                  and

         (b)      such rights are listed (or the functional equivalent thereof)
                  on the TSE.

<PAGE>   40
                                      -34-

(2)      If and whenever at any time after the date hereof payment of a cash
         dividend by the Corporation results in an Extraordinary Cash Dividend
         in respect of the calendar year in which the dividend was paid, the
         AMVESCAP Share Rate shall thereafter be equal to:

                                      1000
                                     -------
                                     (A - B)

         where:

         A equals 1,000 divided by the AMVESCAP Share Rate in effect immediately
         prior to the payment of the Extraordinary Cash Dividend; and

         B is a number equal to the amount of the Extraordinary Cash Dividend in
         respect of each Exchangeable Share.

SECTION 5.4 DISCRETIONARY ADJUSTMENT.

         In case the Corporation after the date hereof shall take any action
affecting, or relating to, the Exchangeable Shares, other than any action
described in Section 5.1 or Section 5.3 which in the opinion of the Directors
would prejudicially affect the rights of Holders upon conversion, the AMVESCAP
Share Rate shall be adjusted by the Directors, subject to the prior consent of
the Recognized Stock Exchange on which the Exchangeable Shares are listed, if
such consent is required, in such manner, if any, and at such time, as they may
in their sole discretion determine to be fair and equitable in the circumstances
to the Holders, which determination shall be conclusive. Failure of the
Directors to take action so as to provide for an adjustment on or prior to the
effective date of any action by the Corporation affecting the Exchangeable
Shares shall be conclusive evidence that the Directors have determined that it
is fair and equitable to make no adjustment in the circumstances.

SECTION 5.5 CHANGES AFFECTING EXCHANGEABLE SHARES.

         If and whenever at any time after the date hereof there shall be a
reclassification or redemption of Exchangeable Shares (other than a subdivision,
redivision, reduction, combination or consolidation), a change of Exchangeable
Shares into other shares or into other securities, a consolidation,
amalgamation, merger, reorganization or arrangement of the Corporation with or
into any other corporation or other entity (other than a consolidation,
amalgamation, merger, reorganization or arrangement which does not result in a
re-classification or change of the outstanding Exchangeable Shares) (any such
event being herein called a "CAPITAL REORGANIZATION"), then notwithstanding any
other provision of this Indenture, after the effective date of such Capital
Reorganization any Holder who is entitled to receive Exchangeable Shares as a
result of the exercise by the Holder after such date of its conversion right or
the exercise by the Corporation after such date of the Share Redemption Right or
the Share Repayment Right shall be entitled to receive and shall accept, in lieu
of Exchangeable Shares, such other shares or

<PAGE>   41
                                      -35-

securities or other property which such Holder would have been entitled to
receive as a result of such Capital Reorganization if, on the effective date
thereof, the Holder had been the registered holder of Exchangeable Shares. After
the effective date of such Capital Reorganization, the other provisions of this
Indenture including, without limitation, Section 3.6, Section 4.1 and Section
4.3, shall be revised to the extent necessary, as determined by the Directors in
their sole discretion, which determination shall be conclusive, to give effect
to the foregoing provisions of this Section 5.5.

SECTION 5.6 RULES APPLICABLE TO ADJUSTMENTS.

(1)      The adjustments provided for in Section 5.1 and Section 5.3 shall be
         cumulative and all adjustments provided for in Article 5 shall be made
         successively. Notwithstanding the foregoing, (i) no adjustment to the
         calculation of the AMVESCAP Share Rate will be required, unless the
         cumulative effect of such adjustment would result in a change of at
         least 1.00% to such rate and (ii) there will be no adjustment of the
         AMVESCAP Share Rate in respect of any event described in Section 5.3(1)
         if the Debentureholders are allowed to participate as though they had
         converted their Debentures prior to the applicable record date or
         effective date, subject to the approval of any Recognized Stock
         Exchange on which the Exchangeable Shares are listed.

(2)      If a dispute shall at any time arise with respect to the adjustments
         provided for in this Article 5, such dispute shall be conclusively
         determined by the Directors, subject to the prior consent of the
         Recognized Stock Exchange on which the Exchangeable Shares are listed,
         if required, and any such determination shall be binding upon the
         Corporation, the Guarantor, the Trustee and the Holders.

(3)      If necessary and determined appropriate by the Directors, appropriate
         adjustments shall be made by the Directors in the application of the
         provisions set forth in this Article 5 with respect to the rights and
         interest thereafter of Holders so that the adjustments as set forth in
         this Article 5 shall thereafter correspondingly be made in relation to
         any shares, other securities or other property thereafter deliverable
         upon conversion of Debentures.

(4)      The Corporation shall from time to time immediately after the
         occurrence of any event which requires an adjustment in the AMVESCAP
         Share Rate or the occurrence of a Reorganization Event or a Capital
         Reorganization provide to the Trustee an Officers' Certificate
         specifying the nature of such event and the impact thereof on the terms
         of the Debentures and setting forth in reasonable detail the method of
         calculation of any adjustment.

SECTION 5.7 NOTICE OF SPECIAL EVENTS.

         The Corporation shall give notice to the Debentureholders in the manner
provided in Section 2.16 as soon as practicable and in any event within 10
Business

<PAGE>   42
                                      -36-

Days following the occurrence of any event referred to in Section 5.6(4) and
such notice shall specify the particulars of such event and any resulting
adjustments to be made in the terms of the Debentures. Contemporaneously with
the giving of such notice, the Corporation shall issue a press release over a
newswire service in Canada and the United Kingdom advising Debentureholders of
the occurrence of such event and the particulars thereof and any resulting
adjustments to be made in the terms of the Debentures.

                                    ARTICLE 6
                           SUBORDINATION OF DEBENTURES

SECTION 6.1 AGREEMENT TO SUBORDINATE.

         Each Debentureholder, by its acceptance thereof, acknowledges and
agrees, that the payment of all amounts owing hereunder or under the Debentures
is hereby expressly subordinated and postponed, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full of all
Senior Liabilities. Without prejudice to the rights of any other holder of
Senior Liabilities not having done so, the benefit of this Article 6 and of any
other provision hereof and of the Debentures relating to the subordination and
postponement thereof may be accepted at any time by or on behalf of any holder
of Senior Liabilities by written notice to the Trustee.

SECTION 6.2 DISTRIBUTION ON INSOLVENCY OR WINDING-UP.

         In the event of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings relative
to the Corporation or the Guarantor, or to the property or assets of the
Corporation or the Guarantor, or in the event of any proceedings for voluntary
liquidation, dissolution or other winding-up of the Corporation or the
Guarantor:

         (a)      The holders of all Senior Liabilities will first be entitled
                  to receive payment in full of all amounts payable under the
                  Senior Liabilities, before the Debentureholders will be
                  entitled to receive any payment or distribution of any kind or
                  character, whether in cash, property or securities, which may
                  be payable or deliverable in any such event in respect of any
                  of the Debentures;

         (b)      Any payment by, or distribution of assets of, the Corporation
                  or the Guarantor of any kind or character, whether in cash,
                  property or securities (other than securities of the
                  Corporation or the Guarantor or any other corporation provided
                  for by a plan of reorganization or readjustment the payment of
                  which is subordinate, at least to the extent provided in this
                  Article 6 with respect to the Debentures, to the payment of
                  all Senior Liabilities, provided that (i) the Senior
                  Liabilities are assumed by the new corporation(s), if any,
                  resulting from such reorganization or readjustment

<PAGE>   43
                                      -37-

                  and (ii) without prejudice to the rights of such holders with
                  respect to any such plan (including without limitation as to
                  whether or not to approve same and on what conditions to do
                  so), the rights of the holders of Senior Liabilities are not
                  altered adversely by such reorganization or readjustment) to
                  which the Debentureholders or the Trustee would be entitled,
                  except for the provisions of this Article 6, will be paid or
                  delivered by the Person making such payment or distribution,
                  whether a trustee in bankruptcy, a receiver, a
                  receiver-manager, a liquidator or otherwise, directly to the
                  holders of Senior Liabilities or their representative or
                  representatives or to the trustee or trustees under any
                  indenture under which any instruments evidencing any of such
                  Senior Liabilities may have been issued, subject to the terms
                  of such Senior Liabilities including, without limitation, the
                  ranking, if any, amongst such Senior Liabilities, rateably
                  according to the aggregate amounts remaining unpaid on account
                  of the Senior Liabilities held or represented by each, to the
                  extent necessary to make payment in full of all Senior
                  Liabilities remaining unpaid after giving effect to any
                  concurrent payment or distribution (or provision therefor) to
                  the holders of such Senior Liabilities; and

         (c)      Subject to Section 6.6, if, notwithstanding the foregoing, any
                  payment by, or distribution of assets of, the Corporation or
                  the Guarantor of any kind or character, whether in cash,
                  property or securities (other than securities of the
                  Corporation or the Guarantor or any other corporation provided
                  for by a plan of reorganization or readjustment the payment of
                  which is subordinate, at least to the extent provided in this
                  Article 6 with respect to the Debentures, to the payment of
                  all Senior Liabilities, provided that (i) the Senior
                  Liabilities are assumed by the new corporation(s), if any,
                  resulting from such reorganization or readjustment and (ii)
                  without prejudice to the rights of such holders with respect
                  to any such plan (including without limitation as to whether
                  or not to approve same and on what conditions to do so), the
                  rights of the holders of Senior Liabilities are not altered
                  adversely by such reorganization or readjustment), is received
                  by the Trustee or the Debentureholders before all Senior
                  Liabilities are paid in full, such payment or distribution
                  will be held in trust for the benefit of and, subject to the
                  terms of such Senior Liabilities including, without
                  limitation, the ranking, if any, amongst such Senior
                  Liabilities, will be paid over to the holders of such Senior
                  Liabilities or their representative or representatives or to
                  the trustee or trustees under any indenture under which any
                  instruments evidencing any of such Senior Liabilities may have
                  been issued, rateably as aforesaid, for application to the
                  payment of all Senior Liabilities remaining unpaid until such
                  Senior Liabilities have been paid in full, after giving effect
                  to any concurrent

<PAGE>   44
                                      -38-

                  payment or distribution (or provision therefor) to the holders
                  of such Senior Liabilities.

SECTION 6.3 SUBROGATION OF DEBENTURES.

         Subject to the prior payment in full of all Senior Liabilities, the
Debentureholders shall be subrogated to the rights of the holders of Senior
Liabilities to receive payments and distributions of assets of the Corporation
or the Guarantor in respect of and on account of Senior Liabilities, to the
extent of the application thereto of moneys or other assets which would have
been received by the Debentureholders, but for the provisions of this Article 6,
until the principal of and interest and all other amounts owing on the
Debentures and under this Indenture shall be paid in full. No payment or
distribution of assets of the Corporation or the Guarantor to the
Debentureholders which would be payable or distributable to the holders of
Senior Liabilities pursuant to this Article 6 shall, as between the Corporation,
the Guarantor, their creditors (other than the holders of Senior Liabilities)
and the Debentureholders, be deemed to be a payment by the Corporation or the
Guarantor to or on account of the Debentureholders, it being understood that the
provisions of this Article 6 are, and are intended, solely for the purpose of
defining the relative rights of the Debentureholders, on the one hand, and the
holders of the Senior Liabilities, on the other hand. Nothing contained in this
Article 6 or elsewhere in this Indenture or in the Debentures is intended to or
shall impair, as between the Corporation or the Guarantor and their respective
creditors (other than the holders of Senior Liabilities and the
Debentureholders), the obligation of the Corporation or the Guarantor, which is
unconditional and absolute, to pay to the Debentureholders the principal of and
interest on the Debentures, as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the
Debentureholders and the creditors of the Corporation, other than the holders of
the Senior Liabilities, nor shall anything herein or therein prevent the Trustee
or the Holder of any Debentures from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to Article 9 and
the rights, if any, under this Article 6, of the holders of Senior Liabilities
upon the exercise of any such remedy.

SECTION 6.4 NO PAYMENT TO DEBENTUREHOLDERS IF EVENT OF DEFAULT UNDER THE SENIOR
            LIABILITIES.

(1)      Upon the maturity of any Senior Liabilities by lapse of time,
         acceleration or otherwise, then, except as hereinafter otherwise
         provided in Section 6.4(3), all amounts payable under such Senior
         Liabilities shall first be paid in full, or shall first have been duly
         provided for, before any payment on account of principal of or interest
         or any other amount owing on the Debentures or under this Indenture is
         made.

(2)      Except as hereinafter otherwise provided in Section 6.4(3), the
         Corporation and the Guarantor shall not make any payment, and the
         Debentureholders shall not

<PAGE>   45
                                      -39-

         be entitled to demand, institute proceedings for the collection of, or
         receive any payment or benefit (including without limitation by
         compensation, set-off, combination of accounts or realization of
         security or otherwise in any manner whatsoever) on account of the
         indebtedness represented by the Debentures (other than pursuant to the
         right of conversion) (i) in a manner inconsistent with the terms (as
         they exist on the date hereof) of this Indenture or of the Debentures,
         or (ii) at any time when a default or an event of default, as defined
         in any Senior Liabilities or any instrument evidencing the same and
         permitting, by the lapse of time or giving of notice, the holders
         thereof to accelerate the maturity thereof, has occurred under any
         Senior Liabilities and is continuing and notice of such default or
         event of default has been given by or on behalf of the holders of
         Senior Liabilities to the Corporation or the Guarantor, as the case may
         be, unless and until such Senior Liabilities have been paid and
         satisfied in full, or unless and until such default or event of default
         shall have been cured or waived or shall have ceased to exist in
         accordance with the provisions of such Senior Liabilities.

(3)      For greater certainty but without limiting the generality of the
         foregoing, this Section 6.4 shall not be construed so as to prevent the
         Trustee from receiving and retaining any payments on account of
         Debentures which are made (i) in a manner that is consistent with the
         terms of this Indenture or of the Debentures and (ii) at any time when
         no default or event of default, as defined in any Senior Liabilities or
         any instrument evidencing the same and permitting, by the lapse of time
         or giving of notice, the holders thereof to accelerate the maturity
         thereof, has occurred and is continuing and in respect of which notice
         has not been given by or on behalf of the holders of Senior Liabilities
         to the Corporation or the Guarantor.

SECTION 6.5 AUTHORIZATION OF DEBENTUREHOLDERS TO TRUSTEE TO EFFECT
            SUBORDINATION.

         Each Holder of Debentures, by its acceptance thereof, authorizes and
directs the Trustee, on its behalf, to take such action as may be necessary or
appropriate to effect the subordination and postponement provided for in this
Article 6 and appoints the Trustee its attorney-in-fact for any and all such
purposes.

SECTION 6.6 KNOWLEDGE OF TRUSTEE.

         Notwithstanding the provisions of this Article 6, the Trustee will not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee, or the taking of any other
action by the Trustee, unless and until the Trustee has received written notice
thereof from or on behalf of the Corporation, the Guarantor, any Debentureholder
or any holder or representative of any Senior Liabilities.

<PAGE>   46
                                      -40-

SECTION 6.7 TRUSTEE MAY HOLD SENIOR LIABILITIES.

         The Trustee is entitled to all the rights set forth in this Article 6
with respect to any Senior Liabilities at the time held by it, to the same
extent as any other holder of Senior Liabilities, and nothing in this Indenture
deprives the Trustee of any of its rights as such holder.

SECTION 6.8 RIGHTS OF HOLDERS OF SENIOR LIABILITIES NOT IMPAIRED.

         No right of any present or future holder of any Senior Liabilities to
enforce the subordination and postponement provided for in this Article 6 will
at any time or in any way be prejudiced or impaired by any act or failure to act
on the part of the Corporation or the Guarantor or by any non-compliance by the
Corporation or the Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.

SECTION 6.9 ALTERING THE SENIOR LIABILITIES.

         The holders of the Senior Liabilities have the right to extend, renew,
modify or amend the terms of the Senior Liabilities or any security therefor and
to release, sell or exchange such security and otherwise to deal freely with the
Corporation and the Guarantor, all without notice to or consent of the
Debentureholders or the Trustee and without affecting the liabilities and
obligations of the parties to this Indenture or the Debentureholders or the
subordination and postponement provided for in this Article 6.

SECTION 6.10 ADDITIONAL INDEBTEDNESS.

         This Indenture does not restrict the Corporation or the Guarantor from
incurring additional Indebtedness or mortgaging, pledging or charging its
properties to secure any Indebtedness.

SECTION 6.11 RIGHT OF DEBENTUREHOLDER TO CONVERT NOT IMPAIRED.

         The subordination of the Debentures to the Senior Liabilities and the
provisions of this Article 6 do not impair in any way the right of a
Debentureholder to convert its Debentures pursuant to Section 4.1.

                                    ARTICLE 7
                              GUARANTEE OF AMVESCAP

SECTION 7.1 GUARANTEE FOR BENEFIT OF ALL DEBENTUREHOLDERS

         The provisions of this Article 7 are for the benefit of, and the
Trustee shall hold all rights hereby conferred in trust for the equal and
rateable benefit of, all present and future Debentureholders.

<PAGE>   47
                                      -41-

SECTION 7.2 GUARANTEE OF PRINCIPAL, INTEREST AND OTHER AMOUNTS

         Subject to Article 6:

         (a)      The Guarantor agrees to be liable for and irrevocably and
                  unconditionally guarantees the full and prompt payment when
                  due (whether at stated maturity, by acceleration or otherwise)
                  and at all times thereafter, and performance, of all of the
                  obligations hereinafter owing to Debentureholders and the
                  Trustee by the Corporation pursuant to this Indenture and the
                  Debentures. The obligations of the Guarantor under this
                  Article 7 are primary, absolute and unconditional; and

         (b)      This guarantee by the Guarantor is a continuing guarantee of
                  payment and performance, in full, of the obligations of the
                  Corporation under this Indenture and the Debentures and not of
                  collection and is in no way conditional or contingent upon any
                  attempt to collect from the Corporation. The obligations of
                  the Guarantor under this Article 7 shall not be discharged
                  until payment and performance, in full, of the obligations of
                  the Corporation under this Indenture and the Debentures has
                  occurred and the Trustee has become obligated pursuant to
                  Section 10.4 to execute and deliver such deeds or other
                  instruments as shall be requisite to release the Corporation
                  and the Guarantor from the terms of this Indenture and the
                  Debentures, except those relating to the indemnification of
                  the Trustee. In the event of a default in payment of any
                  amounts owing under this Indenture or the Debentures or in
                  performance of any of the Corporation's obligations under this
                  Indenture or the Debentures, the Trustee (or any
                  Debentureholder when so permitted under this Indenture) may
                  institute legal proceedings directly against the Guarantor to
                  enforce this guarantee without proceeding against the
                  Corporation.

SECTION 7.3 THE GUARANTOR'S LIABILITY ON DISCHARGE OF THE CORPORATION

(1)      Subject to Article 6, in the event that:

         (a)      The Trustee, pursuant to Section 9.1, shall have declared the
                  principal of and interest on the Debentures then outstanding
                  and any other amounts payable under this Indenture to be due
                  and payable and that no part of or a portion only such
                  principal and interest or any other amounts payable under this
                  Indenture shall have been paid by or on behalf of the
                  Corporation and by operation of law the Corporation shall have
                  been discharged from all further liability under or in respect
                  of the Debentures;

         (b)      Pursuant to any compromise or arrangement, whether voluntary
                  or involuntary, between the Corporation and its creditors or
                  any of them, the

<PAGE>   48
                                      -42-

                  Debentures are cancelled or the terms thereof are modified, or
                  this Indenture terminated;

         (c)      In any other way, the Corporation is released from its
                  obligations under and with respect to the Debentures or any
                  amounts payable under this Indenture or any part thereof,

         then for all purposes hereof the Debentures and all amounts payable
         under this Indenture shall nevertheless be deemed to be still in
         existence and outstanding and the Guarantor shall, on the date of such
         discharge, cancellation, modification, termination or release, be
         primarily liable to make payment of interest (including interest on
         amounts in default) and principal on the Debentures and all other
         amounts payable under this Indenture in the same manner as though the
         Guarantor were a party to this Indenture in place of the Corporation
         and with primary liability hereunder but only to the extent that there
         are insufficient funds in the hands of the Trustee at such time to make
         such payment.

(2)      Subject to Article 6, for the purposes of the foregoing, the Guarantor
         shall pay as aforesaid to the Trustee, for the equal and rateable
         benefit of each and every Debentureholder, the amounts required to be
         paid on the dates provided for such payments under the provisions of
         this Indenture.

SECTION 7.4 LIABILITY OF THE GUARANTOR

(1)      The Guarantor agrees with the Trustee that, as among the Guarantor, the
         Debentureholders and the Trustee, the obligations of the Guarantor
         shall not be satisfied, reduced, affected or discharged by time being
         given, or any other forbearance whatsoever whether as to time of
         performance or otherwise, including, without limitation, the acceptance
         of any partial payment or performance of any obligations of the
         Corporation under this Indenture or the Debentures, or by any failure
         or delay in giving any notice required under this Indenture.

(2)      The Guarantor agrees that its obligations under this Article 7 shall
         not be affected or impaired by any act, omission, matter or thing
         whatsoever occurring before, upon or after any of the obligations of
         the Corporation under this Indenture or the Debentures become due and
         payable which might constitute a whole or partial defence to a claim
         against the Guarantor under this Article 7 or might operate to release
         or otherwise exonerate the Guarantor from any of its obligations under
         this Article 7 or otherwise affect such obligations.

(3)      The Trustee and the Debentureholders may, pursuant to the terms of this
         Indenture, modify, extend, renew, replace, amend, supplement, continue
         or alter any provisions of the Debentures or this Indenture and may
         deal with the

<PAGE>   49
                                      -43-

         Corporation, the Debentures and this Indenture without releasing,
         discharging, limiting or otherwise affecting in whole or in part the
         obligations of the Guarantor under this Article 7, without the consent
         of or notice to the Guarantor and, for greater certainty, the
         Debentureholders and the Trustee shall not be bound either to seek or
         exhaust their recourse against the Corporation or against any other
         Person or against the property of the Corporation or of any other
         Person before being entitled, subject to Article 6, to payment from the
         Guarantor.

SECTION 7.5 SUBROGATION

(1)      Any payment by or recovery from the Guarantor of any amounts payable by
         the Corporation under this Indenture shall not (except as between the
         Corporation and the Debentureholders and the Trustee and to the extent
         of any such payment) be taken to relieve the Corporation from liability
         for such payment, but such liability of the Corporation shall continue
         unimpaired as a liability enforceable by or on behalf of the Guarantor
         in respect thereof, and the Guarantor shall be subrogated pro tanto as
         against the Corporation to the rights, privileges and powers to which
         the Trustee and/or the Debentureholders were entitled prior to such
         payment by or on behalf of the Guarantor provided nevertheless that
         such rights of the Guarantor shall rank subsequent to and not pari
         passu with the rights of the Trustee and/or the Debentureholders
         hereunder. The Guarantor shall not, unless and until the whole of the
         principal amount of the Debentures and the interest thereon and all
         other amounts owing under this Indenture shall have been paid, be
         entitled to any rights or remedies in subrogation to the rights,
         privileges and powers of the Trustee and/or the Debentureholders as
         aforesaid.

(2)      Except as hereinbefore in this Section 7.5 expressly provided with
         respect to the rights of the Guarantor by way of subrogation to the
         rights, privileges and powers of the Trustee, nothing contained in this
         Section 7.5 shall or shall be deemed to restrict the recovery by the
         Guarantor at any time from the Corporation of any amounts that may have
         been paid by or on behalf of the Guarantor hereunder.

(3)      If the Trustee shall hold any assets for the benefit of the
         Debentureholders whether or not such assets are the property of the
         Corporation or if the Trustee shall be a party to any proceedings, or
         shall have any rights to institute any proceedings, for the benefit of
         the Debentureholders, whether against the Corporation or its property
         or otherwise, the Guarantor shall, at such time as the whole of the
         principal amount of the Debentures, the interest (including interest on
         amounts in default) thereon and all other amounts owing under this
         Indenture shall have been paid, be entitled to all such assets and
         rights and shall be subrogated to the rights, privileges and powers of
         the Trustee with respect thereto and with respect to any such
         proceedings.

<PAGE>   50
                                      -44-

SECTION 7.6 WAIVER

         The Guarantor hereby waives notice of acceptance of the guarantee
contained in this Article 7 and acknowledges that the guarantee, covenants and
agreements of the Guarantor herein contained and provided for shall take effect
and are hereby declared to be binding upon the Guarantor notwithstanding any
defect in or omission from this Indenture or the Debentures. The Guarantor
hereby unconditionally waives notice of any of the matters referred to in
Section 9.1, all notices which may be required by any statute, rule of law,
contract or otherwise to preserve any rights of the Trustee on behalf of any
Debentureholders against the Guarantor hereunder, including any right to the
enforcement, assertion or exercise of any right, remedy, power or privilege, and
any requirement of diligence on the part of the Trustee.

SECTION 7.7 WAIVER OF DEFAULT

         The Guarantor shall be deemed not to be in default hereunder if the
default of the Corporation in respect of which the Guarantor would otherwise be
or become liable hereunder shall have been waived or directed to be waived
pursuant to Section 9.2.

SECTION 7.8 ACKNOWLEDGEMENT

         The Guarantor acknowledges that the guarantee contained in this Article
7 is in addition to and not in substitution for any other guarantee(s) held or
that may hereafter be held by the Trustee.

SECTION 7.9 NOTICE TO GUARANTOR

         Any notices, demands and other communications to the Guarantor under
the provisions of this Article 7 shall be valid and effective if delivered in
accordance with Section 2.18 of this Indenture.

SECTION 7.10 NO SET-OFF RIGHTS

         The Guarantor shall not have the right to set-off against the
obligations of the Guarantor arising under this Article 7 any indebtedness or
obligations which may be at any time due and owing by the Trustee or the
Debentureholders to the Guarantor.

                                    ARTICLE 8
                 COVENANTS OF THE CORPORATION AND THE GUARANTOR

SECTION 8.1 COVENANTS OF THE CORPORATION.

         The Corporation covenants with the Trustee that so long as any of the
Debentures remain outstanding:

         (a)      It will continue to be a wholly-owned subsidiary of the
                  Guarantor;

<PAGE>   51
                                      -45-

         (b)      It will duly and punctually pay or cause to be paid to every
                  Debentureholder, or to the Trustee on behalf of every
                  Debentureholder, the principal thereof and any interest
                  accrued thereon, at the dates and places and in the manner
                  provided for herein and in the Debentures;

         (c)      Subject to its rights pursuant to Article 11, it will do or
                  cause to be done all things necessary to preserve and keep in
                  full force and effect its corporate existence, and will, if
                  and whenever required in writing by the Trustee, forthwith
                  file with the Trustee copies of all annual and periodic
                  reports of the Guarantor furnished to the Corporation's
                  shareholders after the date hereof, and at all reasonable
                  times it will furnish or cause to be furnished to the Trustee
                  or its duly authorized agent or attorney such information
                  relating to its business as the Trustee may reasonably
                  require;

         (d)      It will annually, within 120 days of the Corporation's fiscal
                  year end (and at any other reasonable time upon demand by the
                  Trustee), deliver to the Trustee an Officers' Certificate
                  confirming that it has complied with all requirements
                  contained in this Indenture that, if not complied with, would,
                  with the giving of notice, lapse of time or otherwise,
                  constitute an Event of Default, or, if there has been failure
                  to comply, giving particulars thereof;

         (e)      It will remain a reporting issuer (or its equivalent) in good
                  standing under Applicable Securities Legislation where the
                  distribution of Exchangeable Shares may occur in accordance
                  with the terms of this Indenture and the Debentures and where
                  such legislation recognizes the status of reporting issuer (or
                  its equivalent);

         (f)      In order to prevent any accumulation after maturity of unpaid
                  interest, it will not, except with the approval of Holders of
                  a majority in principal amount of Debentures then outstanding
                  expressed by written notice or resolution passed at a meeting
                  of Holders held in accordance with Article 12, directly or
                  indirectly extend or assent to the extension of the time for
                  payment of any interest payable hereunder or be a party to or
                  approve any such arrangement by funding any of such interest
                  or in any other manner. In case the time for payment of any
                  such interest shall be so extended, whether for a definite
                  period or otherwise, such interest shall not be entitled in
                  case of default hereunder to the benefit of this Indenture,
                  except subject to the prior payment in full of the principal
                  of all Debentures then outstanding and of all interest on such
                  Debentures, the payment of which has not been so extended;

<PAGE>   52
                                      -46-

         (g)      It will cause the Debentures and, subject to Section 5.5, the
                  Exchangeable Shares to remain listed and posted for trading
                  (or the functional equivalent thereof) on the TSE;

         (h)      It will, at the relevant times and upon exercise of the
                  relevant rights or elections, comply and take all measures
                  necessary to comply at all times with Section 3.6(3), Section
                  4.1(4) and Section 4.3(6);

         (i)      It will, forthwith upon being notified of any default or event
                  of default by the holders of Senior Liabilities, as
                  contemplated in Section 6.4(2), notify the Trustee of such
                  default or event of default; and

         (j)      Generally, it will duly and punctually perform and carry out
                  all of the acts or things to be done by it as provided in this
                  Indenture.

SECTION 8.2 TRUSTEE TO GIVE NOTICE OF EVENT OF DEFAULT.

         The Trustee shall give to the Holders of Debentures, the Corporation
and the Guarantor in the manner provided for in Section 2.16 or Section 2.18, as
the case may be, within 30 days after the Trustee becomes aware of the
occurrence of any Event of Default, notice of every such Event of Default
continuing at the time the notice is given, unless the Trustee reasonably and in
good faith determines that it is in the best interests of the Debentureholders
to withhold such notice and so informs the Corporation and the Guarantor in
writing.

SECTION 8.3 PERFORMANCE OF COVENANTS BY TRUSTEE.

         If the Corporation or the Guarantor fails to perform any of their
respective covenants contained in this Indenture, the Trustee may notify the
Holders of such failure or may itself perform any of such covenants capable of
being performed by it, but shall be under no obligation to do so. All sums so
expended or advanced by the Trustee shall be repayable as provided in Section
14.7. No such performance or advance by the Trustee shall relieve or be deemed
to relieve the Corporation or the Guarantor of any default hereunder.

SECTION 8.4 COVENANT OF THE GUARANTOR.

         The Guarantor will annually, within 120 days of the Guarantor's fiscal
year end (and at any other reasonable time upon demand by the Trustee), deliver
to the Trustee (i) an Officers' Certificate confirming that it has complied with
all requirements contained in this Indenture that, if not complied with, would,
with the giving of notice, lapse of time or otherwise, constitute an Event of
Default, or, if there has been failure to comply, giving particulars thereof and
(ii) audited consolidated financial statements of the Guarantor for the previous
fiscal year.

<PAGE>   53
                                      -47-

                                    ARTICLE 9
                             DEFAULT AND ENFORCEMENT

SECTION 9.1 EVENTS OF DEFAULT.

         If and when any one or more of the following events (herein called an
"EVENT OF DEFAULT") shall happen with respect to the Debentures, namely:

         (a)      A default in payment of principal of the Debentures when due
                  in cash or by delivery of Exchangeable Shares as required
                  hereunder;

         (b)      A default in payment of interest on the Debentures when due
                  and payable and the continuance of such default for 30 days;

         (c)      A default in performing or observing any of the other
                  covenants, agreements or obligations of the Corporation or the
                  Guarantor as provided herein and the continuance of such
                  default for 60 days after written notice to the Corporation or
                  the Guarantor, respectively, by the Trustee or by the Holders
                  of not less than 25% in principal amount of Debentures then
                  outstanding specifying such default and requiring the same to
                  be remedied, or such longer period of time as the Trustee
                  (having regard to the subject matter of such neglect or
                  non-observance) shall agree to;

         (d)      A decree, judgment, or order by a court having jurisdiction in
                  the premises shall have been entered adjudging the Corporation
                  or the Guarantor a bankrupt or insolvent or approving as
                  properly filed a petition seeking reorganization,
                  readjustment, arrangement, composition or similar relief for
                  the Corporation or the Guarantor, under the Bankruptcy and
                  Insolvency Act (Canada) or any other bankruptcy, insolvency or
                  analogous applicable law of Canada or any province thereof or
                  of England or appointing under any such law a liquidator or
                  trustee or assignee in bankruptcy or insolvency of the
                  Corporation or the Guarantor or of a substantial part of its
                  property, or ordering pursuant to any such law the winding up
                  or liquidation of the affairs of the Corporation or the
                  Guarantor, and such decree, judgement or order shall have
                  remained in force for a period of 30 consecutive days; or any
                  substantial part of the property of the Corporation or the
                  Guarantor shall be sequestered or attached and shall not be
                  returned to the possession of the Corporation or the Guarantor
                  or released from such attachment, as the case may be, whether
                  by filing of a bond, or stay or otherwise, within 30
                  consecutive days thereafter;

         (e)      The Corporation or the Guarantor shall institute proceedings
                  to be adjudicated a voluntary bankrupt, or shall consent to
                  the filing of a

<PAGE>   54
                                      -48-

                  bankruptcy proceeding against it, or shall file a petition or
                  answer or consent seeking reorganization, readjustment,
                  arrangement, composition or similar relief under the
                  Bankruptcy and Insolvency Act (Canada) or any other
                  bankruptcy, insolvency or analogous applicable law of Canada
                  or any province thereof or of England or shall consent to the
                  filing of any such petition, or shall consent to the
                  appointment of a receiver or liquidator or trustee or assignee
                  in bankruptcy or insolvency for it or of a substantial part of
                  its property, or shall make an assignment for the benefit of
                  creditors, or shall admit in writing its inability, to pay its
                  debts generally as they become due; or

         (f)      A default in respect of any indebtedness for borrowed money of
                  the Corporation or the Guarantor having an outstanding
                  principal amount of fifty million U.S. dollars
                  (U.S.$50,000,000) or more, whether such indebtedness now
                  exists or shall hereafter be created, which default has caused
                  the holder of such indebtedness to declare such indebtedness
                  to be due and payable prior to the date on which it would
                  otherwise become or be due and payable and such acceleration
                  is not rescinded or annulled within 10 days after the date of
                  such acceleration;

then, and in each and every such case which has occurred and is continuing, the
Trustee may, in its discretion, and shall, upon the written request of the
Holders of not less than 25% in principal amount of Debentures then outstanding,
declare the principal of, together with accrued interest on all such Debentures
and all other amounts payable hereunder to be due and payable immediately, by a
notice in writing to the Corporation and the Guarantor (and to the Trustee if
given by the Holders), and upon any such declaration such principal amount,
together with accrued interest thereon, and such other amounts shall become
immediately due and payable.

SECTION 9.2 WAIVER.

         At any time after such a declaration of acceleration with respect to
the Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided, the Holders
of a majority in principal amount of Debentures then outstanding, by written
notice to the Corporation and the Trustee, may thereupon rescind and annul such
declaration and its consequences if the Corporation or the Guarantor has paid or
deposited with the Trustee a sum sufficient to pay:

         (a)      All overdue interest on all Debentures;

         (b)      The principal of any of the Debentures which have become due
                  otherwise than by such declaration of acceleration, and
                  interest thereon from the date of such declaration at the rate
                  prescribed therefor in the Debentures

<PAGE>   55
                                      -49-

                  and all other moneys payable hereunder other then as a result
                  of such declaration of acceleration; and

         (c)      To the extent that payment of such interest is lawful and
                  applicable, interest upon overdue instalments of interest at
                  the rate prescribed therefor in such Debentures; and

all Events of Default with respect to the Debentures, other than the non-payment
of the principal of and interest on the Debentures which have become due solely
by such declaration of acceleration, have been cured or waived in accordance
with the provisions of this Indenture.

SECTION 9.3 WAIVER OF DEFAULT OR BREACH.

(1)      The Holders of not less than a majority in principal amount of the
         Debentures then outstanding may on behalf of the Holders of all
         Debentures waive any past default hereunder with respect to the
         Debentures and its consequences, except a default:

         (a)      In the payment of the principal of or interest on a Debenture;
                  or

         (b)      In respect of a covenant or provision hereof that under
                  Article 13 cannot be modified or amended without the consent
                  of the Holder of each Debenture then outstanding.

(2)      Upon any such waiver, such default shall cease to exist, and any Event
         of Default arising therefrom shall be deemed to have been cured, for
         every purpose of this Indenture. No such waiver shall extend to any
         subsequent or other default or impair any right consequent thereon.

SECTION 9.4 OTHER REMEDIES.

(1)      If an Event of Default occurs and is continuing, the Trustee, upon
         being funded and indemnified to its reasonable satisfaction, may pursue
         any available remedy to collect the payment of principal of or interest
         on the Debentures or to enforce the performance of any term of the
         Debentures or this Indenture.

(2)      The Trustee may maintain a proceeding even if it does not possess any
         Debentures or does not produce any of them in the proceeding. A delay
         or omission by the Trustee or any Holder in exercising any right or
         remedy accruing upon an Event of Default shall not impair the right or
         remedy or constitute a waiver of or acquiescence to the Event of
         Default.

SECTION 9.5 APPLICATION OF MONEY COLLECTED.

         Subject to Article 6, any money collected by the Trustee pursuant to
this Article 9 shall be applied in the following order, at the dates fixed by
the Trustee and, in case of

<PAGE>   56
                                      -50-

the distribution of such money on account of principal or interest, upon
presentation of Debentures and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

         (a)      First, to the payment of all amounts due to the Trustee under
                  Section 14.7;

         (b)      Second, to the payment of all amounts then due and unpaid for
                  principal of and interest on the Debentures and other moneys
                  payable hereunder in respect of which or for the benefit of
                  which such money has been collected rateably, without
                  preference or priority of any kind, according to the amounts
                  due and payable on the Debentures for principal and interest,
                  respectively (less any tax required by law to be deducted);
                  and

         (c)      Lastly, the surplus (if any) of such moneys shall be paid to
                  the Corporation, the Guarantor or their respective assigns,
                  unless otherwise required by law;

provided, however, that no payment shall be made pursuant to Section 9.5(b) in
respect of the principal or interest of any Debenture held, directly or
indirectly, by or for the benefit of the Corporation or the Guarantor or any
subsidiary or Affiliate thereof (other than any Debenture pledged for value and
in good faith to a Person, other than the Corporation or the Guarantor or any of
their subsidiaries or Affiliates, but only to the extent of such Person's
interest therein), except subject to the prior payment in full of the principal
and interest of all Debentures which are not so held.

SECTION 9.6 CONTROL BY HOLDERS.

         Subject to Section 9.7, the Holders of at least a majority in principal
amount of the Debentures then outstanding, may:

         (a)      Direct the time, method and place (in Toronto, Ontario) of
                  conducting any proceeding for any remedy available to the
                  Trustee or exercising any trust or power conferred on it with
                  respect to the Debentures, provided that the Trustee has been
                  funded and indemnified to its reasonable satisfaction; and

         (b)      Take any other action authorized to be taken by or on behalf
                  of the Holders of any specified aggregate principal amount of
                  Debentures under any provisions of this Indenture or under
                  applicable law.

SECTION 9.7 LIMITATION ON SUITS.

(1)      A Holder of Debentures may pursue a remedy with respect to this
         Indenture directly itself only if: (i) the Holder gives to the Trustee
         notice of a continuing Event of Default; (ii) the Holders of at least
         25% in principal amount of the Debentures then outstanding make a
         request in writing to the Trustee to pursue

<PAGE>   57
                                      -51-

         the remedy; (iii) such Holder or Holders offer or provide to the
         Trustee funding and indemnity in form satisfactory to the Trustee
         against any loss, liability or expense; (iv) the Trustee does not
         comply with the request within 30 days after receipt of such request,
         funding and indemnity; and (v) during such 30-day period the Holders of
         a majority in principal amount of Debentures then outstanding do not
         give the Trustee a direction inconsistent with the request.

(2)      Holders may not use this Indenture to prejudice the rights of another
         Holder or to obtain a preference or priority over another Holder.

SECTION 9.8 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

         Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on Debentures held by it,
on or after the respective due dates expressed in the Debentures (or, in the
case of redemption, on the Redemption Date), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.

SECTION 9.9 COLLECTION SUIT BY TRUSTEE.

         If an Event of Default specified in Section 9.1(a), Section 9.1(b),
Section 9.1(c) or Section 9.1(f) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Corporation and/or the Guarantor for the whole amount of principal and interest
remaining unpaid.

SECTION 9.10 TRUSTEE MAY FILE PROOFS OF CLAIM.

         The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders lodged or allowed in any judicial proceedings relative to the
Corporation, the Guarantor or their respective creditors or property.

SECTION 9.11 UNDERTAKING FOR COSTS.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defences made by the party litigant.
This Section 9.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 9.7, or a suit by any Holder or group of Holders of more
than 10% in principal amount of the Debentures then outstanding.

<PAGE>   58
                                      -52-

SECTION 9.12 DELAY OR OMISSION NOT WAIVER.

         No delay or omission of the Trustee or of any Holder of Debentures to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 9 or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.

SECTION 9.13 REMEDIES CUMULATIVE.

         No remedy herein conferred upon or reserved to the Trustee or upon or
to the Holders is intended to be exclusive of any other remedy, but each remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now existing or hereafter to exist by law or statute.

SECTION 9.14 JUDGMENT AGAINST THE CORPORATION AND/OR THE GUARANTOR.

         The Corporation and the Guarantor covenants and agrees with the Trustee
that, in case of any judicial or other proceedings to obtain judgment for
payment of the principal of or interest on the Debentures, judgment may be
rendered against either of them in favour of the Holders or in favour of the
Trustee, as trustee for the Holders, for the amount which may remain due in
respect of the Debentures and the interest thereon.

SECTION 9.15 DISTRIBUTION OF PROCEEDS.

         Payments to Holders of Debentures pursuant to Section 9.5(b) shall be
made as follows:

         (a)      At least 10 days' notice of every such payment shall be given
                  in the manner provided in Section 2.16 specifying the time
                  when and the place or places where the Debentures are to be
                  presented and the amount of the payment and the application
                  thereof as between principal, interest and any other moneys
                  payable hereunder;

         (b)      Payment of any Debenture shall be made upon presentation
                  thereof at any one of the places specified in such notice and
                  any such Debenture thereby paid in full shall be surrendered,
                  otherwise a memorandum of such payment shall be endorsed
                  thereon; but the Trustee may in its discretion dispense with
                  presentation and surrender or endorsement in any special case
                  upon such indemnity being given as it shall deem sufficient;

         (c)      From and after the date of payment specified in the notice,
                  interest shall accrue only on the amount which remains unpaid
                  on each Debenture after giving effect to the payment specified
                  in such notice, unless such

<PAGE>   59
                                      -53-

                  Debenture be duly presented on or after the date so specified
                  and payment of such amount be not made; and

         (d)      The Trustee shall not be required to make any interim payment
                  to Debentureholders, unless the moneys in its hands, after
                  reserving therefrom such amount as the Trustee may think
                  necessary to provide for the payments mentioned in Section
                  9.5(a), exceed 5% of the principal amount of the Debentures.

SECTION 9.16 IMMUNITY OF SHAREHOLDERS, ETC.

         The Debentureholders and the Trustee hereby waive and release any
right, cause of action or remedy now or hereafter existing in any jurisdiction
against, any past, present or future incorporator, shareholder, director or
officer (as such) of the Corporation for the payment of the principal or
interest on any of the Debentures or on any covenant, agreement, representation
or warranty by the Corporation herein or in the Debentures contained; provided,
however, that nothing in this section shall prevent recourse to and the
enforcement of liability of any such incorporator, shareholder, director or
officer of the Corporation based upon the fraud of such incorporator,
shareholder, director or officer.

SECTION 9.17 TRUSTEE APPOINTED ATTORNEY.

         The Corporation hereby irrevocably appoints the Trustee to be the
attorney of the Corporation for and in the name and on behalf of the Corporation
to execute any instrument and do any acts and things which the Corporation ought
to sign, execute and do hereunder and generally to use the name of the
Corporation in the exercise of all or any of the powers hereby conferred on the
Trustee, with full powers of substitution and revocation.

                                   ARTICLE 10
                           SATISFACTION AND DISCHARGE

SECTION 10.1 CANCELLATION AND DESTRUCTION.

         All matured Debentures shall forthwith after payment thereof be
delivered to the Trustee or to a Person appointed by it or by the Corporation
with the approval of the Trustee and cancelled. All Debentures cancelled or
required to be cancelled under this or any other provision of this Indenture may
be destroyed by or under the direction of the Trustee by cremation or otherwise
(in the presence of a representative of the Corporation, if the Corporation
shall so require) and the Trustee shall prepare and retain a certificate of such
destruction and deliver a duplicate thereof to the Corporation.

<PAGE>   60
                                      -54-

SECTION 10.2 NON-PRESENTATION OF DEBENTURES.

         If the Holder of any Debenture fails to present its Debenture for
payment on the date on which the principal thereof or represented thereby
becomes payable at maturity or otherwise or fails to accept payment on account
thereof in cash or Exchangeable Shares issued and delivered pursuant to the
provisions hereof or give such receipt therefor, if any, as the Trustee may
require:

         (a)      The Corporation shall be entitled to pay or issue and deliver,
                  as the case may be, to the Trustee and direct it to set aside;
                  or

         (b)      In respect of moneys in the hands of the Trustee which may or
                  should be applied to the payment of the Debentures, the
                  Corporation shall be entitled to direct the Trustee to set
                  aside;

the principal and interest, or the Exchangeable Shares, as the case may be, in
trust to be paid or delivered, as the case may be, without interest to the
Holder of such Debenture, upon due presentation and/or surrender thereof in
accordance with the provisions of this Indenture; and thereupon the principal
and interest payable on or represented by each Debenture in respect whereof such
moneys or Exchangeable Shares have been set aside shall be deemed to have been
paid and the Holder thereof shall thereafter have no right in respect thereof,
except that of receiving payment of the moneys or the Exchangeable Shares so set
aside by the Trustee upon due presentation and/or surrender thereof, subject
always to the provisions of Section 10.3.

SECTION 10.3 REPAYMENT OF UNCLAIMED MONEYS OR EXCHANGEABLE SHARES TO
             CORPORATION.

         Any moneys or Exchangeable Shares in the hands of the Trustee and set
aside under Section 10.2 and not claimed by and paid or delivered as provided in
Section 10.2, to Holders of Debentures within five years after the date of such
setting aside shall be repaid or delivered to the Corporation by the Trustee on
demand, and thereupon the Trustee shall be released from all further liability
with respect to such moneys and Exchangeable Shares and thereafter the Holders
of the Debentures in respect of which such moneys and Exchangeable Shares were
so repaid or delivered to the Corporation shall have no rights in respect
thereof, except to obtain payment of the moneys or delivery of the Exchangeable
Shares (or, after redemption or purchase of the Exchangeable Shares pursuant to
their terms or to the terms of the Plan, AMVESCAP Ordinary Shares) due thereon
from the Corporation.

SECTION 10.4 RELEASE FROM COVENANTS.

         Upon Written Request and proof being given to the reasonable
satisfaction of the Trustee that the principal of all the Debentures and
interest thereon and other moneys payable hereunder have been paid or satisfied
or that all the Debentures then outstanding have matured and that the payment or
satisfaction of all principal thereof,

<PAGE>   61
                                      -55-

interest thereon and other moneys payable has been duly and effectually provided
for, and upon payment of all costs, charges and expenses properly incurred by
the Trustee hereunder and all interest thereon and the remuneration of the
Trustee, or upon provision satisfactory to the Trustee being made therefor, the
Trustee shall, at the request and at the expense of the Corporation, execute and
deliver to the Corporation and the Guarantor such deeds or other instruments as
shall be requisite to release the Corporation and the Guarantor from the terms
of this Indenture and the Debentures, except those relating to the
indemnification of the Trustee.

                                   ARTICLE 11
       MERGER, AMALGAMATION, CONSOLIDATION, CONVEYANCE, TRANSFER OR LEASE

SECTION 11.1 AMALGAMATION AND CONSOLIDATION OF CORPORATION AND CONVEYANCES
             PERMITTED SUBJECT TO CERTAIN CONDITIONS.

         Neither the Corporation nor the Guarantor will consummate any
transaction (whether by way of merger, amalgamation, consolidation,
reorganization or arrangement (except with one or more of its wholly-owned
subsidiaries)) or effect any conveyance, transfer, lease, sale or otherwise of
all or substantially all of its undertaking or assets, unless in any such case:

         (a)      It shall be the continuing corporation, or the successor
                  corporation (or the Person that leases or that acquires by
                  conveyance, sale or transfer all or substantially all of the
                  assets of the Corporation or the Guarantor, as the case may
                  be) (such corporation or Person being referred to as the
                  "SUCCESSOR CORPORATION") shall expressly, by supplemental
                  indenture executed and delivered to the Trustee by such
                  Successor Corporation, assume and become bound by the
                  obligations of the Corporation or the Guarantor, as
                  applicable, under this Indenture, including without limitation
                  the due and punctual payment of the principal of and interest
                  on all Debentures then outstanding, according to their tenor,
                  and other moneys payable hereunder and the due and punctual
                  performance and observance of all the covenants and conditions
                  of this Indenture to be performed by the Corporation or the
                  Guarantor, as applicable; and

         (b)      It or such Successor Corporation, as the case may be, shall
                  not immediately thereafter be in default under this Indenture
                  or the Debentures.

SECTION 11.2 OFFICERS' CERTIFICATE AND OPINION OF COUNSEL.

         The Trustee may receive an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any such merger, amalgamation,
reorganization, arrangement,

<PAGE>   62
                                      -56-

lease, transfer, sale or conveyance, and any such assumption, comply with the
provisions of this Article 11.

SECTION 11.3 VESTING OF POWERS IN SUCCESSOR.

         Whenever the conditions of Section 11.1 have been duly observed and
performed, the Successor Corporation shall succeed to and be substituted for the
Corporation or the Guarantor, as the case may be, and shall agree to be bound by
the terms of this Indenture as principal obligor in place of the Corporation or
as guarantor in place of the Guarantor, as applicable, with the same effect as
if the Successor Corporation had been named herein and the Successor Corporation
shall possess and from time to time may exercise each and every right and power
of the Corporation or the Guarantor, as the case may be, under this Indenture in
the name of the Corporation or the Guarantor, as applicable, or otherwise and
any act or proceeding by any provisions of this Indenture required to be done or
performed by any directors or officers of the Corporation or the Guarantor, as
the case may be, may be done and performed with like force and effect by the
like directors or officers of such Successor Corporation.

SECTION 11.4 EXECUTION OF SUPPLEMENTAL INDENTURE.

         Upon being satisfied that the conditions of Section 11.1 have been duly
observed and performed by delivery of an Officers' Certificate and an Opinion of
Counsel as provided in Section 11.2, the Trustee shall execute any supplemental
indenture required, as provided in Article 13.

                                   ARTICLE 12
                          MEETINGS OF DEBENTUREHOLDERS

SECTION 12.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.

         A meeting of Debentureholders may be called at any time and from time
to time pursuant to this Article 12 to make, give or take any Act provided by
this Indenture to be made, given or taken by Holders of Debentures.

SECTION 12.2 CALL, NOTICE AND PLACE OF MEETINGS.

(1)      The Trustee may at any time and from time to time and shall, on receipt
         of a requisition in writing made by the Corporation or by the Holders
         of at least 10% in principal amount of the Debentures then outstanding,
         which requisition shall set forth in reasonable detail the action
         proposed to be taken at such meeting, and upon being funded and
         indemnified to its reasonable satisfaction by the Corporation or the
         Holders making such requisition, as the case may be, against the costs
         which may be incurred in connection with the calling and holding of
         such meeting, call a meeting of Debentureholders for any purpose
         specified in Section 12.1, to be held at such time and at such place in
         Toronto, Ontario, as the

<PAGE>   63
                                      -57-

         Trustee shall determine. Notice of every meeting of Debentureholders,
         setting forth the time and place of such meeting and in general terms
         the action proposed to be taken at such meeting, shall be given, in the
         manner provided in Section 2.16, not less than 21 nor more than 50 days
         prior to the date fixed for the meeting.

(2)      If, pursuant to Section 12.2(1), the Corporation or Debentureholders
         have requested the Trustee to call a meeting of Debentureholders, and
         the Trustee shall not have made the first publication, or mailing, as
         the case may be, of notice of such meeting within 21 days after receipt
         of such request and funding and indemnity or shall not thereafter
         proceed to cause the meeting to be held as provided herein, then the
         Corporation or such Debentureholders, as the case may be, may determine
         the time and the place in Toronto, Ontario for such meeting and may
         call such meeting for such purposes by giving notice thereof as
         provided in Section 12.2(1).

SECTION 12.3 PERSONS ENTITLED TO VOTE AT MEETINGS.

         To be entitled to vote at any meeting of Debentureholders, a Person
shall be: (i) a Holder of one or more Debentures then outstanding; or (ii) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Debentures then outstanding by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Debentureholders shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Corporation or the Guarantor and their counsel.

SECTION 12.4 QUORUM; ACTION.

(1)      The Persons entitled to vote at least 25% in principal amount of the
         Debentures then outstanding shall constitute a quorum for a meeting of
         Debentureholders. In the absence of a quorum within 30 minutes of the
         time appointed for any such meeting, the meeting shall, if convened at
         the request of Debentureholders, be dissolved. In the absence of a
         quorum in any other case the meeting shall be adjourned to be
         reconvened at the same time and place on the fifth Business Day
         following date of the meeting. At the reconvened meeting, the
         Debentureholders present in person or by proxy shall form a quorum and
         may transact the business for which the meeting was originally convened
         notwithstanding that they may not represent 25% of the principal amount
         of the outstanding Debentures. No notice of the reconvening of any
         adjourned meeting shall be given.

(2)      Except as limited by the proviso to Section 13.2(1), any resolution
         presented to a meeting or adjourned meeting duly reconvened at which a
         quorum is present as aforesaid may be adopted only by the affirmative
         vote of the Holders of a majority in principal amount of Debentures
         represented at the meeting and voted on such resolution; provided,
         however, that, except as limited by the

<PAGE>   64
                                      -58-

         proviso to Section 13.2(1), any resolution with respect to any Act that
         this Indenture expressly provides may be made, given or taken by the
         Holders of a specified percentage in principal amount of Debentures
         then outstanding may be adopted at a meeting or an adjourned meeting
         duly reconvened and at which a quorum is present as aforesaid by the
         affirmative vote of the Holders of such specified percentage in
         principal amount of Debentures then outstanding.

(3)      Any resolution passed or decision taken at any meeting of Holders of
         Debentures duly held in accordance with this section will be binding on
         all Holders of Debentures, whether or not present or represented at the
         meeting.

SECTION 12.5 DETERMINATION OF VOTING RIGHTS; CHAIRMAN; CONDUCT AND ADJOURNMENT
             OF MEETINGS.

(1)      Notwithstanding any other provisions of this Indenture, the Trustee or
         the Corporation, with the approval of the Trustee, may make and from
         time to time may vary such reasonable regulations as it may deem
         advisable for any meeting of Debentureholders in regard to proof of the
         holding of Debentures and the appointment of proxies and in regard to
         the appointment of scrutineers, the submission and examination of
         proxies, certificates and other evidence of the right to vote, and such
         other matters concerning the conduct of the meeting as it shall deem
         appropriate.

(2)      The Trustee shall, by an instrument in writing, appoint a chairman and
         secretary of the meeting, unless the meeting shall have been called by
         the Corporation in which case the Corporation shall, by an instrument
         in writing, appoint a chairman and secretary.

(3)      At any meeting of Debentureholders, each Holder of a Debenture or proxy
         shall be entitled to one vote for each one thousand Dollars ($1,000)
         principal amount of Debentures held or represented by him; provided,
         however, that no vote shall be cast or counted at any meeting in
         respect of any Debentures challenged as not outstanding and ruled by
         the chairman of the meeting to be not outstanding. The chairman of the
         meeting shall have no right to vote, except as a Holder of a Debenture
         or proxy.

(4)      Any meeting of Debentureholders duly called pursuant to Section 12.2 at
         which a quorum is present may be adjourned from time to time by Persons
         entitled to vote a majority in principal amount of Debentures then
         outstanding represented at the meeting; and the meeting may be held as
         so adjourned without further notice.

SECTION 12.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.

         The vote upon any resolution submitted to any meeting of
Debentureholders shall be by written ballots on which shall be inscribed the
signatures of the

<PAGE>   65
                                      -59-

Debentureholders or of their representatives by proxy and the principal amounts
and serial numbers of Debentures then outstanding held or represented by them.
The chairman of the meeting shall appoint two scrutineers of votes who shall
count all votes cast at the meeting for or against any resolution and who shall
make and file with the secretary of the meeting their verified written reports
in triplicate of all votes cast at the meeting. A record, at least in duplicate,
of the proceedings of each meeting of Debentureholders shall be prepared by the
secretary of the meeting and there shall be attached to such record the original
reports of the scrutineers of votes on any vote by ballot taken thereat and
affidavits by one or more Persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that such notice was given as
provided in Section 12.2. Each copy shall be signed and verified by the
affidavits of the chairman and secretary of the meeting and one such copy shall
be delivered to the Corporation, and another to the Trustee to be preserved by
the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

                                   ARTICLE 13
                             SUPPLEMENTAL INDENTURES

SECTION 13.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

         Without the consent of any Holders, the Corporation, when authorized by
a Board Resolution, the Guarantor, when duly authorized, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, in its sole discretion, for any of
the following purposes:

         (a)      To evidence the succession of another corporation to the
                  Corporation or the Guarantor, and the assumption by such
                  successor of the covenants and obligations herein of the
                  Corporation or of the Guarantor, respectively, and in the
                  Debentures;

         (b)      Adding to the provisions hereof such additional covenants,
                  enforcement provisions, release provisions and other
                  provisions as, in the Opinion of Counsel, are necessary or
                  advisable in the premises, provided that the same, in the
                  Opinion of Counsel, are not prejudicial to the interests of
                  the Debentureholders;

         (c)      To add any additional Events of Default;

         (d)      To evidence and provide for the acceptance of appointment
                  hereunder by a successor trustee with respect to the
                  Debentures;

         (e)      To cure any ambiguity, to correct or supplement any provision
                  herein that may be defective or inconsistent with any other
                  provision herein, or to

<PAGE>   66
                                      -60-

                  make any other provisions with respect to matters or questions
                  arising under this Indenture that shall not be inconsistent
                  with any provisions of this Indenture, provided such other
                  provisions shall not, in the Opinion of Counsel to the
                  Trustee, adversely affect the interests of the Holders of
                  Debentures in any material respect;

         (f)      Making any modification of any of the provisions of this
                  Indenture or the Debentures which is of a formal, minor or
                  technical nature;

         (g)      Making any additions to, deletions from or alterations of the
                  provisions of this Indenture (including any of the terms and
                  conditions of the Debentures) which, in the Opinion of Counsel
                  to the Trustee, are not prejudicial to the interests of the
                  Debentureholders and which are necessary or advisable in order
                  to incorporate, reflect or comply with any legislation the
                  provisions of which apply to this Indenture;

         (h)      Adding to or altering the provisions hereof in respect of the
                  transfer or exchange of the Debentures and making any
                  modification in the form of the Debentures which does not
                  affect the substance thereof and which, in the opinion of the
                  Trustee, is not prejudicial to the interests of the
                  Debentureholders;

         (i)      Correcting or rectifying any ambiguities, defective
                  provisions, errors or omissions herein, provided that, in the
                  Opinion of Counsel to the Trustee, the rights of the Trustee
                  and the Debentureholders are in no way prejudiced thereby; and

         (j)      Any other purpose not inconsistent with the terms of this
                  Indenture provided that, in the Opinion of Counsel to the
                  Trustee, the rights of the Trustee and of the Debentureholders
                  are in no way prejudiced thereby.

SECTION 13.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

(1)      With the consent of the Holders of not less than a majority in
         aggregate principal amount of the Debentures represented at any meeting
         of Debentureholders duly called and held in accordance with the
         provisions of Article 12, or by Act of the Holders of not less than a
         majority in aggregate principal amount of the Debentures then
         outstanding delivered to the Corporation and the Trustee, the
         Corporation, when authorized by a Board Resolution, the Guarantor when
         duly authorized and the Trustee may enter into an indenture or
         indentures supplemental hereto for the purpose of adding any provisions
         to or changing in any manner or eliminating any of the provisions of
         this Indenture or of modifying in any manner the rights of the Holders
         under this Indenture; provided, however, that no such supplemental
         indenture shall, without the consent of the Holder of each Debenture
         then outstanding and so affected:

<PAGE>   67
                                      -61-

         (a)      Change the Maturity Date of the principal of, or any
                  instalment of interest on, the Debentures, or reduce the
                  principal amount thereof or the interest thereon or change any
                  place of payment, or change the currency in which the
                  Debentures or interest thereon is payable or modify or alter
                  the rights of the Holders to convert the Debentures into
                  Exchangeable Shares, or impair the right to institute a suit
                  for the enforcement of any such payment on or after the
                  Maturity Date thereof (or, in the case of redemption, on or
                  after the Redemption Date);

         (b)      Reduce the percentage in principal amount of the Debentures
                  then outstanding, the consent of whose Holders is required for
                  any such supplemental indenture, or the consent of whose
                  Holders is required for any waiver of compliance with certain
                  provisions of this Indenture or certain defaults hereunder and
                  their consequences provided for in this Indenture, or reduce
                  the requirements of Section 12.4 for quorum or Section 12.5
                  for voting; or

         (c)      Modify any provision of Section 8.1(d) or Section 8.4
                  regarding the annual delivery of an Officers' Certificate, or
                  modify any provisions of this Section or Section 9.3 except to
                  increase any percentage referred to in this Section or Section
                  9.3 or to provide that certain other provisions of this
                  Indenture cannot be modified or waived without the consent of
                  the Holder of each Debenture then outstanding.

(2)      It shall not be necessary for any Act of Holders under this Section to
         approve the particular form of any proposed supplemental indenture, but
         it shall be sufficient if such Act shall approve the substance thereof.

SECTION 13.3 EXECUTION OF SUPPLEMENTAL INDENTURES.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article 13 or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and subject to Section 14.1, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture, is not inconsistent herewith, is a
valid and binding obligation of the Corporation, enforceable in accordance with
its terms, subject to enforceability being limited by bankruptcy, insolvency or
other laws affecting the enforcement of creditor's rights generally and
equitable remedies including the remedies of specific performance and injunction
being granted only in the discretion of a court of competent jurisdiction and
other qualifications that are customary in the circumstances and, in connection
with a supplemental indenture executed pursuant to Section 13.1, that the
Trustee is authorized to execute and deliver such supplemental indenture without
the consent of the Holders and, in connection with a supplemental indenture
executed pursuant to

<PAGE>   68
                                      -62-

Section 13.2, that the requisite consent of the Holders has been validly
obtained in accordance with Section 13.2. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 13.4 EFFECT OF SUPPLEMENTAL INDENTURES.

         Upon the execution of any supplemental indenture under this Article 13,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore authenticated and delivered under this Indenture shall
be bound by such supplemental indenture.

                                   ARTICLE 14
                             CONCERNING THE TRUSTEE

SECTION 14.1 DUTIES OF TRUSTEE.

(1)      The Trustee in exercising its powers and discharging its duties
         hereunder shall:

         (a)      Act honestly and in good faith with a view to the best
                  interests of the Debentureholders; and

         (b)      Exercise the care, diligence and skill of a reasonably prudent
                  trustee.

(2)      The Trustee need perform only those duties that are specifically set
         forth in this Indenture and no others.

(3)      In the absence of bad faith on its part, the Trustee may conclusively
         act and rely, as to the truth of the statement and the correctness of
         the opinions expressed therein, upon statutory declarations,
         certificates, opinions or reports furnished to the Trustee and
         complying with the requirements of this Indenture.

(4)      Every provision of this Indenture that in any way relates to the
         Trustee is subject to the above paragraphs of this section. The Trustee
         may refuse to perform any duty or exercise any right or power unless it
         receives funding and indemnity reasonably satisfactory to it for
         actions taken under this Indenture. The Trustee shall not be liable for
         interest on any money received by it except as the Trustee may agree
         with the Corporation.

(5)      The Trustee shall not be liable for any error of judgment made in good
         faith by a responsible officer, unless it shall be proved that the
         Trustee was negligent in ascertaining the pertinent facts.

<PAGE>   69
                                      -63-

(6)      No provision of this Indenture shall require the Trustee to expend or
         risk its own funds or otherwise incur any personal financial liability
         in the performance of any of its duties hereunder, or in the exercise
         of any of its rights or powers.

SECTION 14.2 RIGHTS OF TRUSTEE.

(1)      The Trustee may act and rely on any document believed by it to be
         genuine and to have been signed or presented by the proper Person. The
         Trustee need not investigate any fact or matter stated in the document.
         Before the Trustee acts or refrains from acting, it may require an
         Officers' Certificate or an Opinion of Counsel. The Trustee shall not
         be liable for any action it takes or omits to take in good faith in
         reliance thereon. The Trustee may act through agents and shall not be
         responsible for the misconduct or negligence of any agent appointed
         with due care. The Trustee shall not be liable for any action it takes
         or omits to take in good faith, except as otherwise provided in this
         Indenture, which it reasonably believes to be authorized or within its
         rights or powers.

(2)      Any order, request or direction of the Corporation mentioned herein
         shall be sufficiently evidenced by a written request or order signed in
         the name of the Corporation by any authorized officer and any
         resolution of the Board of Directors shall be sufficiently evidenced by
         a Board Resolution.

(3)      Whenever in the administration of this Indenture the Trustee shall deem
         it desirable that a matter be proved or established prior to taking,
         suffering or omitting any action hereunder, the Trustee (unless other
         evidence be herein specifically prescribed) may, in the absence of bad
         faith on its part, rely upon an Officers' Certificate, including (i) as
         to any statements of fact, as evidence of the truth of such statements,
         and (ii) to the effect that any particular dealing or transaction or
         step or thing is, in the opinion of the officers so certifying,
         expedient, as evidence that it is expedient; provided that the Trustee
         may in its sole discretion require from the Corporation or otherwise
         further evidence or information before acting or relying on such
         certificate.

(4)      The Trustee may employ or retain such agents, Counsel, accountants and
         other assistants (at the Corporation's expense) as it may reasonably
         require for the proper determination and discharge of duties hereunder
         and may pay reasonable remuneration for all services performed for it.

(5)      The Trustee may, in relation to this Indenture, act and rely on the
         opinion or advice of or on information obtained from any Counsel,
         notary, valuer, surveyor, engineer, broker, auctioneer, accountant or
         other expert, whether retained, employed or appointed by the Trustee or
         by the Corporation or otherwise and shall not be responsible for any
         loss occasioned by such act or reliance unless such act or reliance was
         taken in bad faith or constituted gross negligence or

<PAGE>   70
                                      -64-

         wilful misconduct. The fees of such Counsel or other experts shall be
         added to and be part of the Trustee's fees hereunder.

(6)      The Trustee may consult with Counsel and written advice of such Counsel
         or any Opinion of Counsel shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in reliance thereon.

(7)      The Trustee shall be under no obligation to exercise any of the rights
         or powers vested in it by this Indenture at the request or direction of
         any of the Holders pursuant to this Indenture, unless such Holders
         shall have offered and furnished to the Trustee funds for the purpose
         and reasonable indemnity against the costs, expenses and liabilities
         which might be incurred by it in compliance with such request or
         direction.

(8)      Prior to the occurrence of an Event of Default with respect to the
         Debentures and after the occurrence of, during the continuance of or
         after the waiving of all such Events of Default which may have
         occurred, the Trustee shall not be bound to make any investigation into
         the facts or matters stated in any resolution, certificate, statement,
         instrument, opinion, report, notice, request, direction, consent,
         order, bond, debenture, note, coupon, other evidence of indebtedness or
         other paper or document, or any investigation of the books and records
         of the Corporation (but the Trustee, in its discretion, may make such
         further inquiry or investigation and shall be entitled to examine the
         books, records and premises of the Corporation, personally or by agent
         or attorney), unless requested to do so by the Act of the Holders of a
         majority in aggregate principal amount of the Debentures then
         outstanding; provided, however, that the Trustee may require reasonable
         funding and indemnity against the cost, expenses or liabilities likely
         to be incurred by it in the making of such investigation.

(9)      The Trustee may execute any of the trusts or powers hereunder or
         perform any duties hereunder either directly or by or through agents or
         attorneys, and the Trustee shall not be responsible for any misconduct
         or negligence on the part of any agent or attorney appointed with due
         care by it hereunder.

(10)     Nothing herein contained shall impose any obligation on the Trustee to
         see or to require evidence of registration or filing (or renewals
         thereof) of this Indenture or any instrument ancillary or supplemental
         hereto.

(11)     The Trustee shall not be bound to give any notice of the execution
         hereof.

(12)     The Trustee shall not incur any liability or responsibility whatever or
         be in any way responsible for the consequence of any breach on the part
         of the Corporation

<PAGE>   71
                                      -65-

         or the Guarantor of any of the covenants herein contained or of any act
         of the agents or servants of the Corporation or the Guarantor.

(13)     The Trustee shall not be liable for the price at which Exchangeable
         Shares are sold pursuant to the provisions of this Indenture, the
         timing of such sales or the failure to effect such sales, provided that
         it acts in accordance with Section 14.1 and follows the directions of
         the Corporation in undertaking such sales.

(14)     The Trustee (i) shall be entitled to act and rely on any Officers'
         Certificate it receives pursuant to Section 5.6(4); (ii) shall not at
         any time be under any duty or responsibility to any Debentureholder to
         determine whether any facts exist which may require any adjustment to
         the AMVESCAP Share Rate or revision to the Current Market Price, or
         with respect to the nature or extent of any such adjustment or revision
         when made, or with respect to the method employed in making such
         adjustment or revision; (iii) shall not be accountable with respect to
         the validity or value (or the kind or amount) of any Exchangeable
         Shares or of any other shares or securities or property which may at
         any time be issued or delivered upon the conversion of any Debenture or
         the exercise of the Share Redemption Right or the Share Repayment
         Right; and (iv) shall not be responsible for any failure of the
         Corporation to make any cash payment or to issue, transfer or deliver
         Exchangeable Shares upon the conversion of any Debenture or the
         exercise of the Share Redemption Right or the Share Repayment Right.

SECTION 14.3 DOCUMENTS, MONEYS, ETC., HELD BY TRUSTEE.

         Any securities, documents of title or other instruments that may at any
time be held by the Trustee subject to the trusts hereof may be placed in the
deposit vaults in the Province of Ontario of the Trustee or of any Canadian
chartered bank (a "QUALIFIED INSTITUTION"), including, without limitation, the
Canadian Imperial Bank of Commerce, or deposited for safekeeping in the Province
of Ontario with any such bank. Unless herein otherwise expressly provided, any
moneys so held, pending the application or withdrawal thereof under any
provision of this Indenture, may be deposited in the name of the Trustee in any
Canadian chartered bank at the rate of interest (if any) then current on similar
deposits or, (i) with the consent of the Corporation, may be deposited in the
deposit department of the Trustee or any other loan or trust corporation
authorized to accept deposits under the laws of Canada or a province thereof, or
(ii) at the written direction of the Corporation, the Trustee shall invest or
reinvest such monies in short term interest bearing or discount debt obligations
issued or guaranteed by the Government of Canada or any province thereof or a
Canadian chartered bank (which may include an Affiliate or related party of the
Trustee), maturing not more than one year from the date of investment, provided
that each such obligation is rated at least R1 (middle) by DBRS Inc. or any
equivalent rating by Canadian Bond Rating Service (an "AUTHORIZED INVESTMENTS").
Any direction by the Corporation to the Trustee as to

<PAGE>   72
                                      -66-

investment or reinvestment of funds shall be in writing and shall be provided to
the Trustee no later than 9:00 a.m. (local time) on the day on which the
investment is to be made. Any such direction received after 9:00 a.m. (local
time) or received on a non-Business Day, shall be deemed to have been given
prior to 9:00 a.m. (local time) the immediately following Business Day. If no
such direction is received, the Trustee shall not have any obligation to invest
the monies in Authorized Investments and pending receipt of such a direction
shall be entitled to hold such monies uninvested in a trust account. The Trustee
shall not be held liable for any losses incurred in the investment of any funds
in Authorized Investments. All interest or other income received by the Trustee
in respect of such deposits and investments shall belong to the Corporation and
shall be remitted to the Corporation upon request five years from Maturity Date,
unless an Event of Default shall have occurred and be continuing, in which case
all such interest and income shall be held by the Trustee and applied in
accordance with Section 9.5.

SECTION 14.4 INDIVIDUAL RIGHTS OF TRUSTEE.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Corporation and
the Guarantor with the same rights it would have if it were not Trustee. Any
agent of the Trustee may do the same with like rights. However, the Trustee is
at all time subject to Section 14.1 and Section 14.10.

SECTION 14.5 TRUSTEE'S DISCLAIMER.

         The Trustee makes no representation as to the validity or adequacy of
the Debentures, it shall not be accountable for the Corporation's use of the
proceeds from Debentures, and it shall not be responsible for any statement with
respect to the Debentures other than its certificate of authentication.

SECTION 14.6 DISCRETION OF TRUSTEE.

         Subject to Section 14.1, unless and until it shall have been required
to do so under the terms hereof, the Trustee shall not be bound to do or take
any act, action or proceeding in virtue of the powers conferred on it hereby;
nor shall the Trustee be required to take notice of any Event of Default
hereunder, other than in payment of any moneys required by any provision hereof
to be paid to it or where it has actual knowledge thereof, unless and until
notified in writing of such Event of Default (which notice shall distinctly
specify the Event of Default desired to be brought to the attention of the
Trustee) and in the absence of any such notice and subject as aforesaid, the
Trustee may for all purposes of this Indenture conclusively assume that the
Corporation is not in default hereunder and that no Event of Default has been
made with respect to the payment of principal and interest on the Debentures, or
in the observances or performance of any of the covenants, agreements or
conditions contained herein. Subject to Section 14.1, and except as otherwise
herein stated, any such notice or requisition shall in no way limit any
discretion herein given to the Trustee to determine

<PAGE>   73
                                      -67-

whether or not the Trustee shall take action with respect to any Event of
Default or take action without any such notice or requisition. The Trustee may,
before commencing or at any time during the continuance of any such action,
require the Holders at whose instance it is acting to deposit with the Trustee
the Debentures held by them, for which Debentures the Trustee shall issue
receipts.

SECTION 14.7 COMPENSATION AND INDEMNITY.

(1)      The Corporation shall pay to the Trustee from time to time compensation
         for its services hereunder as agreed separately by the Corporation and
         the Trustee, and shall pay or reimburse the Trustee upon its request
         for all reasonable expenses, disbursements and advances incurred or
         made by the Trustee in the administration or execution of its duties
         under this Indenture (including the reasonable and documented
         compensation and disbursements of its Counsel and all other advisers
         and assistants not regularly in its employ), both before any default
         hereunder and thereafter until all duties of the Trustee under this
         Indenture shall be finally and fully performed. The Trustee's
         compensation shall not be limited by any law on compensation of a
         trustee of an express trust.

(2)      The Corporation hereby indemnifies and saves harmless the Trustee and
         its directors, officers, employees and agents against any loss,
         damages, charges, expenses, claims, actions or liability whatsoever
         which the Trustee suffers or incurs as a result of or arising out of
         its duties and obligations hereunder. The foregoing provisions of this
         Section do not apply to the extent that in any circumstances there has
         been a failure by the Trustee or its employees to act honestly and in
         good faith or to discharge the Trustee's obligations under Section
         14.1(1). This indemnity will survive the termination or discharge of
         this Indenture and the resignation or removal of the Trustee. The
         Trustee shall notify the Corporation promptly of any claim for which it
         may seek indemnity. The Corporation shall defend the claim and the
         Trustee shall co-operate in the defence. The Trustee may have separate
         Counsel and the Corporation shall pay the reasonable fees and expenses
         of such Counsel. The Corporation need not pay for any settlement made
         without its consent, which consent must not be unreasonably withheld.

(3)      Any amount due under this Section 14.7 and unpaid 30 days after demand
         for such payment shall bear interest from the expiration of such 30
         days, at the rate normally charged by the Trustee on overdue accounts.
         Such amount shall continue to be payable after the occurrence of an
         Event of Default and until the trusts hereof shall be finally wound up
         and whether or not the trusts of this Indenture shall be in the course
         of administration by or under the direction of the court.

<PAGE>   74
                                      -68-

SECTION 14.8 REPLACEMENT OF TRUSTEE.

(1)      A resignation or removal of the Trustee and appointment of a successor
         trustee shall become effective only upon the successor trustee's
         acceptance of appointments as provided in this section.

(2)      The Trustee may resign at any time with respect to the Debentures by
         giving written notice thereof to the Corporation who shall appoint a
         successor trustee within 30 days. If an instrument of acceptance by a
         successor shall not have been delivered to the Trustee within 30 days
         after the giving of such notice of resignation, the resigning Trustee,
         at the Corporation's expense, may petition any court of competent
         jurisdiction for the appointment of a successor trustee. The Holders of
         not less than a majority in principal amount of the Debentures then
         outstanding may remove the Trustee by so notifying the Trustee and the
         Corporation. If: (i) the Trustee fails to comply with Section 14.1 or
         Section 14.10; (ii) the Trustee is adjudged to be bankrupt or
         insolvent; (iii) a receiver or public officer takes charge of the
         Trustee or its property; or (iv) the Trustee becomes incapable of
         acting, then, in any such case, the Corporation by a Board Resolution
         may remove the Trustee.

(3)      If the Trustee resigns or is removed or if a vacancy exists in the
         office of Trustee for any reason with respect to the Debentures, the
         Corporation shall promptly appoint a successor trustee with respect to
         the Debentures and shall comply with the applicable requirements of
         this Section 14.8. Within one year after the successor trustee takes
         office, the Holders of a majority in principal amount of Debentures
         then outstanding may appoint a successor trustee to replace the
         successor trustee appointed by the Corporation. If a successor trustee
         does not take office within 60 days after the retiring Trustee resigns
         or is removed, the retiring Trustee, the Corporation or the Holders of
         not less than 10% in principal amount of the Debentures then
         outstanding may petition any court of competent jurisdiction for the
         appointment of a successor trustee with respect to the Debentures.

(4)      The Corporation shall give notice to the Debentureholders of each
         resignation and each removal of the Trustee with respect to the
         Debentures and each appointment of a successor trustee with respect to
         the Debentures in the manner provided in Section 2.16. Each notice
         shall include the name of the successor trustee with respect to the
         Debentures and its address.

(5)      In the case of an appointment hereunder of a successor trustee with
         respect to the Debentures, every such successor trustee so appointed
         shall execute, acknowledge and deliver to the Corporation and to the
         retiring Trustee an instrument accepting such appointment, and
         thereupon the resignation or removal of the retiring Trustee shall
         become effective and such successor trustee,

<PAGE>   75
                                      -69-

         without any further act, deed or conveyance, shall become vested with
         all the rights, powers, trusts and duties of the retiring Trustee; but
         on request of the Corporation or the successor trustee, such retiring
         Trustee shall, upon payment of its charges and any other amount owing
         to it hereunder, execute and deliver an instrument transferring to such
         successor trustee all the rights, powers and trusts of the retiring
         Trustee, and shall duly assign, transfer and deliver to such successor
         trustee all property and money held by such retiring Trustee hereunder.

(6)      Upon request of any such successor trustee, the Corporation shall
         execute any and all instruments for more fully and certainly vesting in
         and confirming to such successor trustee all such rights, powers and
         trusts referred to in Section 14.8(5).

(7)      No successor trustee shall accept its appointment unless at the time of
         such acceptance such successor trustee shall be qualified and eligible
         under this Article 14.

SECTION 14.9 SUCCESSOR TRUSTEE BY MERGER, ETC.

         If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
trustee.

SECTION 14.10 ELIGIBILITY; DISQUALIFICATION.

         This Indenture shall always have a Trustee who satisfies the
requirements of Part V of the Business Corporations Act (Ontario). The Trustee
represents to the Corporation that at the date of the execution and delivery of
this Indenture no material conflict of interest exists in the Trustee's role as
a fiduciary hereunder and agrees that in the event of a material conflict of
interest arising hereafter the Trustee shall, within 90 days after ascertaining
that such a material conflict of interest exists, either eliminate such material
conflict of interest or resign its trust hereunder. If any such material
conflict of interest exists or hereafter shall exist, the validity and
enforceability of this Indenture and the Debentures shall not be affected in any
manner whatsoever by reason thereof.

SECTION 14.11 ACCEPTANCE OF TRUST.

         The Trustee hereby accepts the trusts in this Indenture declared,
created or constituted and provided for and agrees to perform the same upon the
terms and conditions herein set forth.

SECTION 14.12 ADDITIONAL EVIDENCE.

         In addition to the reports, certificates, opinions and other evidence
required by this Indenture, the Corporation shall furnish to the Trustee such
additional evidence of compliance with any provision hereof in such form as may
be prescribed by applicable

<PAGE>   76
                                      -70-

legislation or as the Trustee may reasonably require by written notice to the
Corporation.

SECTION 14.13 DEPOSIT OF DEBENTURES.

         The Trustee may, before commencing or at any time during the
continuance of any act, action or proceeding taken pursuant to this Indenture,
require the Debentureholders, at whose instance it is acting, to deposit with
the Trustee the Debentures held by them, for which Debentures the Trustee shall
issue receipts.

         IN WITNESS WHEREOF the parties have executed this Indenture.

                                       CIBC MELLON TRUST COMPANY

                                       By: /s/ MAXINE MCDONALD
                                          --------------------------------------
                                          Name: Maxine McDonald
                                          Title: Senior Manager, Client
                                                 Relations

                                       By: /s/ JEFFERY CARRABS
                                          --------------------------------------
                                          Name: Jeffery Carrabs
                                          Title: Manager, Client Relations

                                       AMVESCAP INC.

                                       By: /s/ ROBERT HAIN
                                          --------------------------------------
                                          Authorized Signing Officer

                                       AMVESCAP PLC

                                       By: /s/ ROBERT F. MCCULLOUGH
                                          --------------------------------------
                                          Authorized Signing Officer

<PAGE>   77

                                  SCHEDULE "A"

                                FORM OF DEBENTURE

                                                               CUSIP 03235K AA 4

NO. o                             AMVESCAP INC.                               $o
               INCORPORATED UNDER THE COMPANIES ACT (NOVA SCOTIA)

                     AMVESCAP EQUITY SUBORDINATED DEBENTURES

         AMVESCAP Inc. (the "CORPORATION"), for value received, hereby
acknowledges itself indebted and promises to pay to the order of the registered
holder hereof as set out on the reverse hereof, on the third anniversary of the
date hereof (the "MATURITY DATE"), or on such earlier date as the principal
amount hereof may become due in accordance with the provisions of the Indenture
hereinafter mentioned, the principal sum of

                                                                   o DOLLARS($o)

in lawful money of Canada, on presentation and surrender of this Debenture at
the principal office of CIBC Mellon Trust Company in the City of Toronto, and to
pay interest on the principal amount hereof at the rate of 6.00% per annum from
the date hereof or from the most recent Interest Payment Date to which interest
has been paid or made available for payment on the Debentures then outstanding,
whichever is later, in like money in equal semi-annual instalments in arrears,
commencing six months after the date hereof with overdue interest, if any, at
the same rate after as well as before maturity and after as well as before
default in payment of principal or interest.

         As interest on this Debenture becomes due, the Corporation (except in
case of payment of interest at maturity or on redemption or conversion, at which
time payment of interest, less any tax required by law to be deducted or
withheld, will be made upon surrender of this Debenture) shall forward or cause
to be forwarded by courier or ordinary post to the registered address of the
registered holder of the Debenture for the time being, or in the case of joint
holders to the registered address of one of such joint holders, a cheque for
such interest, less any tax required by law to be deducted or withheld, if any,
payable to the order of such holder or holders and negotiable at par. The
forwarding of such cheque shall satisfy and discharge the liability for interest
on this Debenture to the extent of the sum represented thereby (plus the amount
of any tax deducted or withheld as aforesaid), unless such cheque be not paid on
presentation.

         This Debenture is one of the AMVESCAP Equity Subordinated Debentures
(the "DEBENTURES") issued under an Indenture (the "INDENTURE") dated the date
hereof and made among the Corporation, CIBC Mellon Trust Company, as trustee
(the "TRUSTEE") and AMVESCAP PLC, as guarantor ("GUARANTOR"). Reference is
hereby made to the Indenture for a description of the rights of the Holders of
the Debentures, the Corporation, the Guarantor and the Trustee and of the terms
and conditions upon which the Debentures are

<PAGE>   78
                                      -2-

issued and held, all to the same effect as if the provisions of the Indenture
were herein set forth, to all of which provisions the Holder of this Debenture,
by acceptance hereof, assents. To the extent that the terms and conditions
stated in this Debenture conflict with the terms and conditions of the
Indenture, the latter prevails. All capitalized terms used herein have the
meanings ascribed thereto in the Indenture unless otherwise indicated.

         The Debentures are issuable as fully registered Debentures in
denominations of $1,000 and integral multiples of $1,000. The Debentures of any
authorized denomination may be exchanged, as provided in the Indenture, for
Debentures of the same aggregate principal amount in any other authorized
denomination.

         This Debenture and all other Debentures certified and issued under the
Indenture rank pari passu with one another, in accordance to their tenor without
discrimination, preference or priority. The payment of all amounts owing under
the Indenture including, without limitation, the principal of and interest on
the Debentures is subordinated to the prior payment in full of Senior
Liabilities as provided in Article 6 of the Indenture. The Indenture does not
restrict the Corporation from incurring additional Indebtedness for borrowed
money or from mortgaging, pledging or charging its properties to secure any
Indebtedness.

         At any time before the Maturity Date the Corporation may, upon at least
20 days' and not more than 30 days' notice, conditionally or unconditionally
redeem all, but not less than all, of the Debentures outstanding on a date
chosen by the Corporation for redemption (the "REDEMPTION DATE") upon payment in
lawful money of Canada of an amount, for each $1,000 principal amount of
Debentures to be redeemed, equal to the aggregate of (i) $1,200; plus (ii) all
accrued and unpaid interest on each such $1,000 principal amount to but
excluding the Redemption Date (collectively, the "REDEMPTION AMOUNT"). The
Corporation may satisfy the Redemption Amount in cash or by the delivery of that
number of Freely Tradeable Exchangeable Shares obtained by dividing the
Redemption Amount by 95% of the Current Market Price of an AMVESCAP Ordinary
Share on the date of the Redemption Notice. The Corporation may only exercise
its right to conditionally redeem all of the outstanding Debentures if there is
an Offer (that is a take-over bid or issuer bid to purchase AMVESCAP Ordinary
Shares or any other transaction which has a similar effect) and if the only
condition to the Corporation's exercise of its right to redeem all of the
outstanding Debentures is the completion of such Offer.

         Each Debentureholder has the right at its option, at any time and from
time to time, to convert its Debentures into Exchangeable Shares. In order to
exercise this right to convert, a Debentureholder is required to deliver to the
Trustee a conversion notice (the "CONVERSION NOTICE") in the form attached to
this Debenture, together with this Debenture, and to specify in such notice the
date on which such Debentureholder wants such conversion to be effective, which
date shall be not less than four Business Days and not more than 15 Business
Days from the day the Trustee receives such Conversion Notice. Each $1,000
principal amount of Debentures is convertible into that number of Exchangeable
Shares equal to the Conversion Number in effect on the date the Trustee

<PAGE>   79
                                      -3-

receives the applicable Conversion Notice. The Conversion Number will be
calculated as (i) the Conversion Value (being the lesser of the AMVESCAP Share
Value and $1,200) divided by (ii) the Current Market Price of an AMVESCAP
Ordinary Share on the date the Trustee receives the applicable Conversion
Notice. The AMVESCAP Share Value will be equal to the AMVESCAP Share Rate
multiplied by the Current Market Price of an AMVESCAP Ordinary Share on the date
the Trustee receives the applicable Conversion Notice. The AMVESCAP Share Rate
is subject to adjustment upon the occurrence of certain events specified in the
Indenture. The Corporation has the option by notifying the Trustee and the
Holder, in lieu of delivering Exchangeable Shares upon a conversion of
Debentures, to pay the Conversion Value of the Debentures tendered for
conversion in cash.

         The Corporation will send to the Holders of Debentures, at least 10
Business Days and not more than 20 Business Days prior to the maturity of the
Debentures, a notice (the "MATURITY NOTICE") which will provide such Holders
with the following options:

         (a)      to convert their Debentures to Exchangeable Shares, only if
                  the AMVESCAP Share Value at maturity is greater than or equal
                  to $1,000, subject to the right of the Corporation to pay the
                  Conversion Value in cash;

         (b)      to convert their Debentures to Exchangeable Shares, whether or
                  not the AMVESCAP Share Value at maturity exceeds $1,000,
                  subject to the right of the Corporation to pay the Conversion
                  Value in cash; or

         (c)      to receive payment of the principal amount of the Debentures
                  in cash, subject to the exercise by the Corporation of the
                  Share Repayment Right;

it being understood, in each case, that the accrued interest, if any, shall be
paid in cash.

         In order to select one of the options, Debentureholders will be
required to deliver to the Trustee before the close of business (in the City of
Toronto, Ontario) on the Business Day that is three Business Days prior to
maturity (the "DETERMINATION DATE") a duly completed exercise notice in
prescribed form. Holders of Debentures who do not deliver a duly completed
exercise notice at or before the close of business (in the City of Toronto,
Ontario) on the Determination Date will be deemed to have selected option (a)
and, unless the Corporation has exercised its right to pay the Conversion Value
in cash, the Debentures held by such Holders will automatically be converted
into Exchangeable Shares, if the AMVESCAP Share Value at maturity is greater
than or equal to $ 1,000. The Corporation shall specify in the Maturity Notice
whether it will deliver Exchangeable Shares on conversion of the Debentures or,
in lieu of delivering Exchangeable Shares on conversion, elects to pay the
Conversion Value in cash for Debentures tendered for conversion under option (a)
or (b), and whether, if the Holder selects option (c), the Corporation, in lieu
of paying cash on maturity, elects to exercise the Share Repayment Right and
deliver Exchangeable Shares.

<PAGE>   80
                                      -4-

         No fractional Exchangeable Shares will be delivered to the holders of
Debentures upon conversion, if the Redemption Amount is satisfied by the
delivery of Exchangeable Shares or if the Corporation exercises the Share
Repayment Right, but in lieu thereof, the Corporation will make an equivalent
cash payment.

         Subject to regulatory requirements and provided no Event of Default has
occurred and is continuing, the Corporation may purchase Debentures in the open
market or by tender or private contract at any price. Debentures purchased or
redeemed by the Corporation shall be cancelled and shall not be reissued.

         In all cases, if taxes are required to be deducted or withheld from a
payment in cash payable to a Holder or from Exchangeable Shares to be delivered
to a Holder (including, without limitation, Exchangeable Shares issued as a
result of the conversion of a Debenture at the option of the Holder or as a
result of the redemption of a Debenture before maturity at the option of the
Corporation), such Holder will receive such payment less all such applicable
taxes.

         The Indenture contains provisions for the holding of meetings of
Debentureholders and rendering certain resolutions passed at such meetings by
the Holders of the majority in aggregate principal amount of the Debentures
represented at the meeting and voted on such resolutions binding upon all
Debentureholders, subject to the provisions of the Indenture.

         This Debenture may only be transferred upon compliance with the
conditions precedent in the Indenture on the register kept at the principal
office of the Trustee in the City of Toronto, Ontario and may be exchanged at
such place, by the registered Holder hereof or its executors or administrators
or other legal representatives or its or their attorney duly appointed by an
instrument in writing in form and execution satisfactory to the Trustee, and
upon compliance with such reasonable requirements as the Trustee may prescribe,
and such transfer shall be duly noted thereon by the Trustee. Neither the
Corporation nor the Trustee nor any registrar shall be required to transfer or
exchange any Debentures on any Interest Payment Date or Redemption Date or for a
period of 15 Business Days preceding any Interest Payment Date (as defined in
the Indenture) or Redemption Date.

         This Debenture shall not become obligatory for any purpose until it
shall have been certified by the Trustee for the time being under the Indenture.

         The Holder of this Debenture, by receiving and holding same, hereby
accepts and agrees to be bound by the terms, and to be entitled to the benefits
of this Debenture and of the Indenture and confirms the appointment of the
Trustee and of the Indenture, the whole in accordance with and subject to the
respective provisions thereof.

         IN WITNESS WHEREOF AMVESCAP INC. has caused this Debenture to be signed
by its President and Secretary.

<PAGE>   81
                                      -5-

         DATED as of the 1st day of August, 2000.

                                       AMVESCAP INC.

                                       By:
                                          --------------------------------------
                                          President

                                       By:
                                          --------------------------------------
                                          Secretary

                              TRUSTEE'S CERTIFICATE

         This Debenture is one of the AMVESCAP Equity Subordinated Debentures
referred to in the Indenture within mentioned.

                                       CIBC MELLON TRUST COMPANY,
                                       Trustee

                                       By:
                                          --------------------------------------
                                          Authorized Signing Officer

<PAGE>   82
                                      -6-

--------------------------------------------------------------------------------
                           CERTIFICATE OF ENTITLEMENT

This Certificate is one of the duly authorized certificates of the Corporation
designated as its Certificates of Entitlement (the "CERTIFICATES") issued in
accordance with the Voting and Exchange Trust Agreement between AMVESCAP INC.
(the "CORPORATION"), AMVESCAP PLC and the Trustee designated thereunder
concurrently with the issuance of the AMVESCAP Equity Subordinated Debentures
(the "DEBENTURES") of the Corporation. This Certificate and the attached
Debenture(s) may be transferred and surrendered only together. The Voting and
Exchange Trust Agreement provides that upon presentation of this Certificate
together with the surrender of the attached Debenture(s), the holder of this
Certificate shall be entitled to become, for all purposes, a "Beneficiary" under
the terms of the Voting and Exchange Trust Agreement to the extent that the
holder becomes the registered holder of any Exchangeable Shares in connection
with the surrender of the attached Debenture(s).

A copy of the Voting and Exchange Trust Agreement is on file at the registered
office of the Corporation in Halifax, Nova Scotia.

BY WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed.

                                  AMVESCAP INC.

By:                                         By:
   --------------------------------            ---------------------------------
              PRESIDENT                                    SECRETARY
--------------------------------------------------------------------------------

The Form of Assignment, Retraction Request and Conversion Notice (collectively,
the "FORMS") are attached to this Debenture. The holder of this Debenture should
contact the office of CIBC Mellon Trust Company in Toronto in order to obtain a
copy of the Forms should they become detached from this Debenture.

<PAGE>   83
                                      -7-

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________________________, whose address and social
insurance number, if applicable, are set forth below, this Debenture (or
$________ principal amount hereof*) of AMVESCAP Inc. standing in the name(s) of
the undersigned in the register maintained by the Trustee on behalf of the
Corporation with respect to such Debenture and does hereby irrevocably authorize
and direct the Trustee to transfer such Debenture in such register, with full
power of substitution in the premises.

Dated:
      --------------------------------------------------------------------------

Address of Transferee:
                      ----------------------------------------------------------

(Street Address, City, Province and Postal Code)
                                                --------------------------------

Social Insurance Number of Transferee, if applicable:
                                                     ---------------------------

*If less than the full principal amount of the within Debenture is to be
transferred, indicate in the space provided the principal amount (which must be
$1,000 or an integral multiple thereof) to be transferred.

1.       The signature(s) to this assignment must correspond with the name(s) as
         written upon the face of this Debenture in every particular without
         alteration or any change whatsoever. The signature(s) must be
         guaranteed by a Canadian chartered bank or trust company or by a member
         firm of a recognized stock exchange in Canada. Notarized or witnessed
         signatures are not acceptable as guaranteed signatures.

2.       The registered holder of this Debenture is responsible for the payment
         of any documentary, stamp or other transfer taxes that may be payable
         in respect of the transfer of this Debenture.

Signature of Guarantor:

-----------------------------        -------------------------------------------
Authorized Officer                   Signature of transferring registered holder

-----------------------------
Name of Institution

<PAGE>   84
                                      -8-

                                CONVERSION NOTICE

TO:               AMVESCAP INC.
                  c/o CIBC Mellon Trust Company
                  199 Bay Street
                  Commerce Court West
                  Securities Level
                  Toronto, Ontario, Canada
                  M5L 1G9

NOTE:             All capitalized terms used herein have the meanings ascribed
                  thereto in the Indenture mentioned below, unless otherwise
                  indicated.

         Subject to the right of the Corporation to pay the Conversion Value in
cash, the undersigned registered holder of the attached Debentures irrevocably
elects to convert such Debentures (or $_____________________ principal amount
thereof*) in accordance with the terms of the Indenture referred to in such
Debentures on _______________ [THE DEBENTUREHOLDER MUST SPECIFY THE DATE UPON
WHICH IT WANTS THE CONVERSION TO BE EFFECTIVE WHICH CANNOT BE LESS THAN FOUR
BUSINESS DAYS OR MORE THAN 15 BUSINESS DAYS FROM THE DAY THE TRUSTEE RECEIVES
THIS CONVERSION NOTICE AND IF THIS CONVERSION NOTICE IS RECEIVED BY THE TRUSTEE
AFTER 4:30 P.M. (TORONTO TIME) ON ANY DAY IT WILL BE DEEMED TO HAVE BEEN
RECEIVED BY THE TRUSTEE ON THE NEXT BUSINESS DAY]. The undersigned registered
holder of such Debentures tenders herewith such Debentures, and, if applicable,
directs that the Exchangeable Shares of AMVESCAP Inc. issuable upon a conversion
be issued and delivered to the person indicated below. (If Exchangeable Shares
are to be issued in the name of a person other than the holder, all requisite
transfer taxes must be tendered by the undersigned).

Dated:
      ----------------------------          ------------------------------------
                                            (Signature of Registered Holder)

*        If less than the full principal amount of the Debentures, indicate in
         the space provided the principal amount (which must be $1,000 or
         integral multiples thereof).

Note:             If Exchangeable Shares are to be issued in the name of a
                  person other than the holder, the signature must be guaranteed
                  by a chartered bank, a trust company or a member firm of a
                  recognized stock exchange in Canada.

(Print name in which Exchangeable Shares are to be issued, delivered and
registered)

Name
    -----------------------------------

---------------------------------------     ------------------------------------
(Address)                                   (City, Province and Postal Code)

Name of guarantor:
                  ------------------------------------------

Authorized signature:
                     ---------------------------------------

<PAGE>   85
                                      -9-

[RETRACTION REQUEST TO BE COMPLETED ONLY IF THE DEBENTUREHOLDER WISHES TO HAVE
THE CORPORATION IMMEDIATELY REDEEM ALL OR ANY OF THE EXCHANGEABLE SHARES THE
DEBENTUREHOLDER RECEIVES UPON CONVERSION OF THIS DEBENTURE. THIS RETRACTION
REQUEST IS SUBJECT TO THE CORPORATION'S OVERRIDING RIGHT TO ELECT TO PAY THE
CONVERSION VALUE IN CASH IN LIEU OF DELIVERING EXCHANGEABLE SHARES ON
CONVERSION.]

                               RETRACTION REQUEST

To: AMVESCAP Inc. (the "Corporation") and AVZ Callco Inc. ("Callco")

         This notice is given pursuant to Section 6 of the provisions (the
"SHARE PROVISIONS") attaching to the Exchangeable Shares issuable upon
conversion of this Debenture and all capitalized words and expressions used in
this notice that are not defined in the Indenture but are defined in the Share
Provisions have the meanings ascribed to such words and expressions in such
Share Provisions.

         The undersigned hereby notifies the Corporation that, provided (i) the
Corporation has not exercised its right to pay the Conversion Value in cash, and
(ii) the Retraction Call Right referred to below has not been exercised, the
undersigned desires to have the Corporation redeem in accordance with Section 6
of the Share Provisions:

[ ]        all share(s) issuable upon conversion of this Debenture; or

[ ]        _______ share(s) only issuable upon conversion of this Debenture.

         The undersigned hereby notifies the Corporation that the Retraction
Date shall be _____________________.

NOTE:             The Retraction Date must be a Business Day and must not be
                  less than 10 Business Days nor more than 15 Business Days
                  after the Conversion Date. If no such Business Day is
                  specified above, the Retraction Date shall be deemed to be the
                  15th Business Day after the Conversion Date.

         The undersigned acknowledges the overriding Retraction Call Right of
Callco to purchase all but not less than all the Retracted Shares from the
undersigned and that this notice is and shall be deemed to be a revocable offer
by the undersigned to sell the Retracted Shares to Callco in accordance with the
Retraction Call Right on the Retraction Date for the Purchase Price and on the
other terms and conditions set out in section 6(3) of the Share Provisions. This
Retraction Request, and this offer to sell the Retracted Shares to Callco, may
be revoked and withdrawn by the undersigned only by notice in writing given to
the Corporation at any time before the close of business on the Business Day
immediately preceding the Retraction Date.

<PAGE>   86
                                      -10-

         The undersigned acknowledges that if, as a result of solvency
provisions of applicable law, the Corporation is unable to redeem all of the
Retracted Shares, the Retracted Shares will be automatically exchanged pursuant
to the Voting and Exchange Trust Agreement so as to require the Guarantor to
purchase the unredeemed Retracted Shares.

         The undersigned hereby represents and warrants to Callco and the
Corporation that the undersigned:

[ ]      is

                           (select one)

[ ]      is not

a non-resident of Canada for purposes of the Income Tax Act (Canada). THE
UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS NOT A NON-RESIDENT OF CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN
TAX MAY BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON THE REDEMPTION OR
PURCHASE OF THE RETRACTED SHARES.

[ ]      The undersigned hereby represents and warrants to Callco and the
Corporation that the undersigned is not a person within the United States of
America, its territories or possessions or any state thereof, or the District of
Columbia (collectively, the "United States") or a U.S. person (within the
meaning of Regulation S under the United States Securities Act of 1933, as
amended) and is not making this Retraction Request for the account or benefit of
a person within the United States or such a U.S. person.

         The undersigned hereby represents and warrants to Callco and the
Corporation that the undersigned (i) has good title to, and owns, this
Debenture, free and clear of all liens, claims and encumbrances, and (ii) will
have good title to, and own, the share(s) issuable upon conversion of this
Debenture to be acquired by Callco or the Corporation, as the case may be, free
and clear of all liens, claims and encumbrances.

--------------     ------------------------------     --------------------------
(Date)               (Signature of Shareholder)        (Guarantee of Signature)

         [ ]      Please check box if the certificates for AMVESCAP Ordinary
         Shares and any cheque(s) resulting from the retraction or purchase of
         the Retracted Shares are to be held for pick-up by the Debentureholder
         from the Trustee, failing which such certificates and cheque(s) will be
         mailed to the last address of the Debentureholder as it appears on the
         Debenture register.

<PAGE>   87
                                      -11-

NOTE:             This panel must be completed and this certificate, together
                  with such additional documents and payments (including,
                  without limitation, any applicable Stamp Taxes) as the Trustee
                  may require, must be deposited with the Trustee. The
                  securities and any cheque(s) resulting from the retraction or
                  purchase of the Retracted Shares will be issued and registered
                  in, and made payable to, respectively, the name of the
                  Debentureholder as it appears on the Debenture register and
                  the certificates for AMVESCAP Ordinary Shares and any
                  cheque(s) resulting from such retraction or purchase will be
                  delivered to such Debentureholder as indicated above, unless
                  the form appearing immediately below is duly completed.

Date:
     -------------------

Name of Person in Whose Name Securities or Cheque(s)

Are to be Registered, Issued or Delivered (please print):

Street Address or P.O. Box:

Signature of Shareholder:

City, Province and Postal Code:

Signature Guaranteed by:

NOTE:             If this Retraction Request is for less than all of the shares
                  issuable upon conversion of this Debenture, a certificate
                  representing the remaining Exchangeable Share(s) issuable upon
                  conversion of this Debenture will be issued and registered in
                  the name of the Debentureholder as it appears on the Debenture
                  register.

<PAGE>   88

                                  SCHEDULE "B"

                            FORM OF REDEMPTION NOTICE

                                  AMVESCAP INC.

                     AMVESCAP EQUITY SUBORDINATED DEBENTURES

                                REDEMPTION NOTICE

TO:               Holders of AMVESCAP Equity Subordinated Debentures (the
                  "DEBENTURES") of AMVESCAP Inc. (the "CORPORATION")

NOTE:             All capitalized terms used herein have the meanings ascribed
                  thereto in the Indenture mentioned below, unless otherwise
                  indicated.

         Notice is hereby given pursuant to Section 3.3 of the Indenture dated
August 1, 2000 among the Corporation, CIBC Mellon Trust Company (the "TRUSTEE")
and AMVESCAP PLC ("AMVESCAP"), that [, SUBJECT TO THE SATISFACTION OF THE
CONDITION SET OUT IN THE FOLLOWING PARAGRAPH (THE "CONDITION")] the aggregate
principal amount of all Debentures outstanding will be redeemed as of o (the
"REDEMPTION DATE"), upon payment of a redemption amount of $o for each $1,000
principal amount of Debentures, being equal to the aggregate of (i) $1,200, plus
(ii) all accrued and unpaid interest on such $1,000 principal amount to but
excluding the Redemption Date (collectively, the "REDEMPTION AMOUNT").

         [THERE IS AN OFFER (THAT IS A TAKE-OVER BID OR ISSUER BID TO PURCHASE
AMVESCAP ORDINARY SHARES OR ANOTHER TRANSACTION WHICH HAS A SIMILAR EFFECT AND
ONE OF THE CONDITIONS TO THE COMPLETION OF SUCH PURCHASE PURSUANT TO SUCH BID OR
OTHER TRANSACTION IS THE REDEMPTION OF THE DEBENTURES) AND THIS NOTICE OF
REDEMPTION AND THE CORPORATION'S OBLIGATION PURSUANT TO THIS NOTICE TO REDEEM
ALL OF THE OUTSTANDING DEBENTURES IS SUBJECT TO COMPLETION OF SUCH OFFER.]

         [SUBJECT TO SATISFACTION OF THE CONDITION,] The Redemption Amount (less
any tax required by law to be deducted) will be payable upon presentation and
surrender of the Debentures called for redemption at the following corporate
office:

           [SET OUT ADDRESS OF PRINCIPAL CORPORATE OFFICE IN TORONTO]

The interest upon the principal amount of Debentures called for redemption shall
cease to be payable from and after the Redemption Date, unless payment of the
Redemption Amount shall not be made on presentation for surrender of such
Debentures at the above-mentioned corporate office on or after the Redemption
Date or prior to the setting aside of the Redemption Amount pursuant to the
Indenture.

         [PURSUANT TO SECTION 3.6 OF THE INDENTURE, THE CORPORATION HEREBY
IRREVOCABLY ELECTS TO SATISFY ITS OBLIGATION TO PAY TO HOLDERS OF DEBENTURES THE
REDEMPTION AMOUNT BY ISSUING AND DELIVERING TO THE HOLDERS THAT NUMBER OF FREELY
TRADEABLE EXCHANGEABLE

<PAGE>   89
                                      -2-

SHARES OBTAINED BY DIVIDING (i) THE REDEMPTION AMOUNT, BY (ii) 95% OF THE
CURRENT MARKET PRICE OF AN AMVESCAP ORDINARY SHARE ON THE DATE OF THIS
REDEMPTION NOTICE (THE "SHARE REDEMPTION RIGHT"). THE CURRENT MARKET PRICE OF
AMVESCAP ORDINARY SHARE IS $o.]

         [NO FRACTIONAL EXCHANGEABLE SHARES SHALL BE DELIVERED UPON THE EXERCISE
BY THE CORPORATION OF THE ABOVE-MENTIONED SHARE REDEMPTION RIGHT BUT, IN LIEU
THEREOF, THE CORPORATION SHALL PAY THE CASH EQUIVALENT THEREOF DETERMINED ON THE
BASIS OF THE CURRENT MARKET PRICE OF AN AMVESCAP ORDINARY SHARE ON THE DATE OF
THIS REDEMPTION NOTICE (LESS ANY TAX REQUIRED BY LAW TO BE DEDUCTED).]

         Neither the Corporation nor the Trustee nor any registrar shall be
required to transfer or exchange any Debentures on any Interest Payment Date or
Redemption Date or for a period of 15 Business Days preceding any Interest
Payment Date or Redemption Date.

         Debentureholders are reminded that, subject to and in accordance with
the provisions of the Indenture, their Debentures are convertible at any time
and from time to time. A Debentureholder wishing to convert its Debentures
should review the provisions of Article 4 of the Indenture and the terms and
conditions of its Debentures and the Conversion Notice (including, without
limitation, the Retraction Request forming part of such notice) printed on its
Debenture certificate.

         DATED as of the o day of o.

                                       AMVESCAP INC.

                                       By:
                                          --------------------------------------
                                          Authorized Signing Officer

<PAGE>   90

                                  SCHEDULE "C"

                          FORM OF NOTICE OF CONVERSION

                                CONVERSION NOTICE

TO:               AMVESCAP INC.
                  c/o CIBC Mellon Trust Company
                  199 Bay Street
                  Commerce Court West
                  Securities Level
                  Toronto, Ontario, Canada
                  M5L 1G9

NOTE:             All capitalized terms used herein have the meanings ascribed
                  thereto in the Indenture mentioned below, unless otherwise
                  indicated.

         Subject to the right of the Corporation to pay the Conversion Value in
cash, the undersigned registered holder of the attached Debentures irrevocably
elects to convert such Debentures (or $____________________ principal amount
thereof*) in accordance with the terms of the Indenture referred to in such
Debentures on _______________ [THE DEBENTUREHOLDER MUST SPECIFY THE DATE UPON
WHICH IT WANTS THE CONVERSION TO BE EFFECTIVE WHICH CANNOT BE LESS THAN FOUR
BUSINESS DAYS OR MORE THAN 15 BUSINESS DAYS FROM THE DAY THE TRUSTEE RECEIVES
THIS CONVERSION NOTICE AND IF THIS CONVERSION NOTICE IS RECEIVED BY THE TRUSTEE
AFTER 4:30 P.M. (TORONTO TIME) ON ANY DAY IT WILL BE DEEMED TO HAVE BEEN
RECEIVED BY THE TRUSTEE ON THE NEXT BUSINESS DAY]. The undersigned registered
holder of such Debentures tenders herewith such Debentures, and, if applicable,
directs that the Exchangeable Shares of AMVESCAP Inc. issuable upon a conversion
be issued and delivered to the person indicated below. (If Exchangeable Shares
are to be issued in the name of a person other than the holder, all requisite
transfer taxes must be tendered by the undersigned).

Dated:
      ----------------------------          ------------------------------------
                                              (Signature of Registered Holder)

*        If less than the full principal amount of the Debentures, indicate in
         the space provided the principal amount (which must be $1,000 or
         integral multiples thereof).

Note:             If Exchangeable Shares are to be issued in the name of a
                  person other than the holder, the signature must be guaranteed
                  by a chartered bank, a trust company or a member firm of a
                  recognized stock exchange in Canada.

(Print name in which Exchangeable Shares are to be issued, delivered and
registered)

Name
    -----------------------------------

<PAGE>   91
                                      -2-

---------------------------------------     ------------------------------------
(Address)                                   (City, Province and Postal Code)

Name of guarantor:
                  -----------------------------------------

Authorized signature:
                     --------------------------------------

[RETRACTION REQUEST TO BE COMPLETED ONLY IF THE DEBENTUREHOLDER WISHES TO HAVE
THE CORPORATION IMMEDIATELY REDEEM ALL OR ANY OF THE EXCHANGEABLE SHARES THE
DEBENTUREHOLDER RECEIVES UPON CONVERSION OF THIS DEBENTURE. THIS RETRACTION
REQUEST IS SUBJECT TO THE CORPORATION'S OVERRIDING RIGHT TO ELECT TO PAY THE
CONVERSION VALUE IN CASH IN LIEU OF DELIVERING EXCHANGEABLE SHARES ON
CONVERSION.]

                               RETRACTION REQUEST

To: AMVESCAP Inc. (the "Corporation") and AVZ Callco Inc. ("Callco")

         This notice is given pursuant to Section 6 of the provisions (the
"SHARE PROVISIONS") attaching to the Exchangeable Shares issuable upon
conversion of this Debenture and all capitalized words and expressions used in
this notice that are not defined in the Indenture but are defined in the Share
Provisions have the meanings ascribed to such words and expressions in such
Share Provisions.

         The undersigned hereby notifies the Corporation that, provided (i) the
Corporation has not exercised its right to pay the Conversion Value in cash, and
(ii) the Retraction Call Right referred to below has not been exercised, the
undersigned desires to have the Corporation redeem in accordance with Section 6
of the Share Provisions:

[ ]      all share(s) issuable upon conversion of this Debenture; or

[ ]      _______ share(s) only issuable upon conversion of this Debenture.

         The undersigned hereby notifies the Corporation that the Retraction
Date shall be _____________________.

NOTE:             The Retraction Date must be a Business Day and must not be
                  less than 10 Business Days nor more than 15 Business Days
                  after the Conversion Date. If no such Business Day is
                  specified above, the Retraction Date shall be deemed to be the
                  15th Business Day after the Conversion Date.

         The undersigned acknowledges the overriding Retraction Call Right of
Callco to purchase all but not less than all the Retracted Shares from the
undersigned and that this notice is and shall be deemed to be a revocable offer
by the undersigned to sell the Retracted Shares to Callco in accordance with the
Retraction Call Right on the Retraction Date for the Purchase Price and on the
other terms and conditions set out in section 6(3) of the Share Provisions. This
Retraction Request, and this offer to sell the

<PAGE>   92
                                      -3-

Retracted Shares to Callco, may be revoked and withdrawn by the undersigned only
by notice in writing given to the Corporation at any time before the close of
business on the Business Day immediately preceding the Retraction Date.

         The undersigned acknowledges that if, as a result of solvency
provisions of applicable law, the Corporation is unable to redeem all of the
Retracted Shares, the Retracted Shares will be automatically exchanged pursuant
to the Voting and Exchange Trust Agreement so as to require the Guarantor to
purchase the unredeemed Retracted Shares.

         The undersigned hereby represents and warrants to Callco and the
Corporation that the undersigned:

[ ]      is

                           (select one)

[ ]      is not

a non-resident of Canada for purposes of the Income Tax Act (Canada). THE
UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS NOT A NON-RESIDENT OF CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN
TAX MAY BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON THE REDEMPTION OR
PURCHASE OF THE RETRACTED SHARES.

[ ]      The undersigned hereby represents and warrants to Callco and the
Corporation that the undersigned is not a person within the United States of
America, its territories or possessions or any state thereof, or the District of
Columbia (collectively, the "United States") or a U.S. person (within the
meaning of Regulation S under the United States Securities Act of 1933, as
amended) and is not making this Retraction Request for the account or benefit of
a person within the United States or such a U.S. person.

         The undersigned hereby represents and warrants to Callco and the
Corporation that the undersigned (i) has good title to, and owns, this
Debenture, free and clear of all liens, claims and encumbrances, and (ii) will
have good title to, and own, the share(s) issuable upon conversion of this
Debenture to be acquired by Callco or the Corporation, as the case may be, free
and clear of all liens, claims and encumbrances.

--------------     ------------------------------     --------------------------
(Date)               (Signature of Shareholder)        (Guarantee of Signature)

         [ ]      Please check box if the certificates for AMVESCAP Ordinary
         Shares and any cheque(s) resulting from the retraction or purchase of
         the Retracted Shares are to be held for pick-up by the Debentureholder
         from the Trustee, failing which

<PAGE>   93
                                      -4-

         such certificates and cheque(s) will be mailed to the last address of
         the Debentureholder as it appears on the Debenture register.

NOTE:             This panel must be completed and this certificate, together
                  with such additional documents and payments (including,
                  without limitation, any applicable Stamp Taxes) as the Trustee
                  may require, must be deposited with the Trustee. The
                  securities and any cheque(s) resulting from the retraction or
                  purchase of the Retracted Shares will be issued and registered
                  in, and made payable to, respectively, the name of the
                  Debentureholder as it appears on the Debenture register and
                  the certificates for AMVESCAP Ordinary Shares and any
                  cheque(s) resulting from such retraction or purchase will be
                  delivered to such Debentureholder as indicated above, unless
                  the form appearing immediately below is duly completed.

Date:
     -------------------

Name of Person in Whose Name Securities or Cheque(s)

Are to be Registered, Issued or Delivered (please print):

Street Address or P.O. Box:

Signature of Shareholder:

City, Province and Postal Code:

Signature Guaranteed by:

NOTE:             If this Retraction Request is for less than all of the shares
                  issuable upon conversion of this Debenture, a certificate
                  representing the remaining Exchangeable Share(s) issuable upon
                  conversion of this Debenture will be issued and registered in
                  the name of the Debentureholder as it appears on the Debenture
                  register.

<PAGE>   94

                                 SCHEDULE "D-1"

                             FORM OF MATURITY NOTICE

                                  AMVESCAP INC.

                     AMVESCAP EQUITY SUBORDINATED DEBENTURES

                                 MATURITY NOTICE

TO:               Holders of AMVESCAP Equity Subordinated Debentures (the
                  "DEBENTURES") of AMVESCAP Inc. (the "CORPORATION")

NOTE:             All capitalized terms used herein have the meanings ascribed
                  thereto in the Indenture mentioned below, unless otherwise
                  indicated.

         Notice is hereby given pursuant to Section 4.3 of the Indenture dated
August 1, 2000 between the Corporation, CIBC Mellon Trust Company, as trustee
(the "TRUSTEE") and AMVESCAP PLC ("AMVESCAP"), that the Debentures will become
due and payable as of August 1, 2003 (the "MATURITY DATE") and that each $1,000
principal amount of Debentures will become convertible, at the option of the
holder thereof, on the Maturity Date, into the Conversion Number of Exchangeable
Shares then in effect. The Conversion Number of Exchangeable Shares on the
Maturity Date will be calculated as (i) the Conversion Value (being the lesser
of the AMVESCAP Share Value and $1,200) on such date divided by (ii) the Current
Market Price of an AMVESCAP Ordinary Shares on the Maturity Date. The AMVESCAP
Share Value on the Maturity Date will be equal to the product of the AMVESCAP
Share Rate and the Current Market Price of an AMVESCAP Ordinary Share on the
Maturity Date. The Current Market Price of an AMVESCAP Ordinary Share on the
Maturity Date shall be the quotient obtained by dividing (i) the aggregate of
the Daily Value of Trades for each day during the period of 20 consecutive
Trading Days ending not more than three Trading Days before such date, by (ii)
the aggregate volume of AMVESCAP Ordinary Shares used to calculate such Daily
Value of Trades.

         Each holder of Debentures has the following options in respect of the
maturity of the Debentures:

         (a)      to convert their Debentures to Exchangeable Shares, only if
                  the AMVESCAP Share Value on the Maturity Date is greater than
                  or equal to $1,000, subject to the right of the Corporation to
                  pay the Conversion Value in cash;

         (b)      to convert their Debentures to Exchangeable Shares, whether or
                  not the AMVESCAP Share Value on the Maturity Date exceeds
                  $1,000, subject to the right of the Corporation to pay the
                  Conversion Value in cash; or

         (c)      to receive payment of the principal amount of the Debentures
                  in cash, subject to the exercise by the Corporation of the
                  Share Repayment Right;

<PAGE>   95
                                      -2-

it being understood, in each case, that the accrued interest, if any, shall be
paid in cash.

In order to select one of the above-mentioned options a Holder will be required
to deliver to the Trustee at the following address:

                  [SET OUT ADDRESS OF THE APPROPRIATE ADDRESS]

before the close of business on the Business Day that is three Business Days
prior to the Maturity Date (the "DETERMINATION DATE"), an exercise notice in the
form annexed hereto duly completed and executed by such Holder or its executors
or administrators or other legal representatives or its or their attorney duly
appointed by instrument in form and execution satisfactory to the Trustee,
together with the Debentures to which such notice relates. A HOLDER WHO DOES NOT
DELIVER A DULY COMPLETED EXERCISE NOTICE AT OR BEFORE THE CLOSE OF BUSINESS ON
THE DETERMINATION DATE WILL BE DEEMED TO HAVE SELECTED OPTION (a) AND THE
DEBENTURES HELD BY SUCH HOLDERS WILL AUTOMATICALLY BE CONVERTED INTO
EXCHANGEABLE SHARES IF THE AMVESCAP SHARE VALUE AS OF THE MATURITY DATE IS
GREATER THAN OR EQUAL TO $1,000 [SUBJECT TO THE ELECTION BELOW MADE BY THE
CORPORATION TO PAY THE CONVERSION VALUE IN CASH].

         A Holder's selection of an option on the Determination Date should take
into account the Current Market Price of an AMVESCAP Ordinary Share on the
Maturity Date which may be more or less than the market price of an AMVESCAP
Ordinary Share on the Maturity Date. A HOLDER SELECTING OPTION (b) MAY BE ACTING
CONTRARY TO HIS OR HER ECONOMIC INTERESTS SINCE, IF THE AMVESCAP SHARE VALUE AT
MATURITY IS LESS THAN $1,000, A HOLDER OF DEBENTURES MAY RECEIVE A GREATER
AMOUNT UNDER OPTION (c).

         If a Holder selects option (a) or (b) and the Conversion Value (or any
portion thereof) is subject to withholding taxes on account of income tax, the
Corporation shall sell, or cause to be sold, through investment banks, brokers
or dealers selected by the Corporation, out of the Exchangeable Shares issued by
the Corporation for this purpose, such number of Exchangeable Shares that is
sufficient to cover the amount of taxes required to be withheld and shall remit
same, or cause same to be remitted, to the proper tax authorities within the
period of time prescribed for this purpose under applicable laws.

         Pursuant to Section 4.3(4) of the Indenture, the Corporation hereby
advises the Holders of Debentures that it [WILL DELIVER EXCHANGEABLE SHARES ON
THE CONVERSION OF THE DEBENTURES] [OR] [IRREVOCABLY ELECTS TO PAY TO HOLDERS OF
DEBENTURES WHO HAVE ELECTED OR ARE DEEMED TO HAVE ELECTED TO CONVERT THEIR
DEBENTURES INTO EXCHANGEABLE SHARES, AN AMOUNT IN CASH EQUAL TO THE CONVERSION
VALUE PER $1,000 PRINCIPAL AMOUNT OF DEBENTURES, LESS ANY TAX REQUIRED BY LAW TO
BE DEDUCTED,] and that it [WILL DELIVER TO HOLDERS OF DEBENTURES WHO HAVE
SELECTED OPTION (c) THAT NUMBER OF FREELY TRADEABLE EXCHANGEABLE SHARES EQUAL TO
THE NUMBER OBTAINED BY DIVIDING THE PRINCIPAL AMOUNT OF SUCH DEBENTURES BY 95%
OF THE CURRENT MARKET PRICE OF AN AMVESCAP ORDINARY SHARE ON THE MATURITY DATE.
IN THE EVENT THAT THE CORPORATION ELECTS TO ISSUE AND DELIVER EXCHANGEABLE
SHARES AS AFORESAID, UPON PRESENTATION AND SURRENDER OF THE DEBENTURES, THE
CORPORATION SHALL PAY OR CAUSE TO BE PAID IN CASH TO THE HOLDER ALL ACCRUED AND

<PAGE>   96
                                      -3-

UNPAID INTEREST TO THE MATURITY DATE, TOGETHER WITH THE CASH EQUIVALENT
REPRESENTING FRACTIONAL EXCHANGEABLE SHARES.]

         DATED as of the o day of o, 2003.

                                       AMVESCAP INC.

                                       By:
                                          --------------------------------------
                                          Authorized Signing Officer

<PAGE>   97

                                 SCHEDULE "D-2"

                       FORM OF EXERCISE NOTICE AT MATURITY

                                 EXERCISE NOTICE

TO:               AMVESCAP INC.

NOTE:             All capitalized terms used herein have the meanings ascribed
                  thereto in the Indenture mentioned below, unless otherwise
                  indicated.

         The undersigned registered holder of AMVESCAP Equity Subordinated
Debentures bearing Certificate No. o irrevocably elects (please check applicable
box to indicate your choice):

[ ]      (a)      to convert such Debentures to Exchangeable Shares (or $o
                  principal amount thereof*) only if the AMVESCAP Share Value on
                  the Maturity Date is greater than or equal to $1,000, subject
                  to the right of the Corporation to pay the Conversion Value in
                  cash; or

[ ]      (b)      to convert such Debentures to Exchangeable Shares (or $o
                  principal amount thereof*) whether or not the AMVESCAP Share
                  Value on the Maturity Date exceeds $1,000, subject to the
                  right of the Corporation to pay the Conversion Value in cash;
                  or

[ ]      (c)      to receive payment of the principal amount of such Debentures
                  (or $o principal amount thereof*) in cash, subject to exercise
                  by the Corporation of the Share Repayment Right;

it being understood, in each case, that the accrued interest, if any, shall be
paid in cash,

in accordance with the terms of the Indenture referred to in such Debenture and
tenders herewith such Debentures, and, if applicable, directs that the
Exchangeable Shares of the Corporation issuable and deliverable upon a
conversion or in satisfaction of the payment of the principal amount at the
Maturity Date be issued and delivered to the person indicated below. (If
Exchangeable Shares are to be issued in the name of a person other than the
holder, all requisite transfer taxes must be tendered by the undersigned.)

         A HOLDER WHO DOES NOT DELIVER A DULY COMPLETED EXERCISE NOTICE AT OR
BEFORE THE CLOSE OF BUSINESS ON THE DETERMINATION DATE WILL BE DEEMED TO HAVE
SELECTED OPTION (a) AND THE DEBENTURES HELD BY SUCH HOLDERS WILL AUTOMATICALLY
BE CONVERTED INTO EXCHANGEABLE SHARES IF THE AMVESCAP SHARE VALUE AS OF THE
MATURITY DATE IS GREATER THAN OR EQUAL TO $1,000 [SUBJECT TO THE ELECTION IN THE
MATURITY NOTICE MADE BY THE CORPORATION TO PAY THE CONVERSION VALUE IN CASH].

<PAGE>   98
                                      -2-

         A HOLDER SELECTING OPTION (b) MAY BE ACTING CONTRARY TO HIS OR HER
ECONOMIC INTERESTS SINCE, IF THE AMVESCAP SHARE VALUE AT MATURITY IS LESS THAN
$1,000, A HOLDER OF DEBENTURES MAY RECEIVE A GREATER AMOUNT UNDER OPTION (c).

Dated:
      ---------------------------------     ------------------------------------
                                              (Signature of Registered Holder)

*        If less than the full principal amount of the Debenture, indicate in
         the space provided the principal amount (which must be $1,000 or
         integral multiples thereof).

Note:             If Exchangeable Shares are to be issued in the name of a
                  person other than the holder, the signature must be guaranteed
                  by a chartered bank, a trust company or a member firm of a
                  recognized stock exchange in Canada.

(Print name in which Exchangeable Shares are to be issued, delivered and
registered)

Name
    -----------------------------------

---------------------------------------     ------------------------------------
(Address)                                   (City, Province and Postal Code)

Name of guarantor:
                  -----------------------------------------

Authorized signature:
                     --------------------------------------<PAGE>   1
                                                                    EXHIBIT 4.28

                                MERGER AGREEMENT

                                      AMONG

                     NATIONAL ASSET MANAGEMENT CORPORATION,

                                  THE SELLERS,

                               THE OPTION HOLDER,

                                       AND

                                  AMVESCAP PLC

                                       AND

                                    AVZ, INC.

                          DATED AS OF FEBRUARY 28, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>               <C>                                                        <C>
                                    ARTICLE I
                                   DEFINITIONS

Section 1.1       Definitions..................................................2

                                   ARTICLE II
                                   THE MERGER

Section 2.1       The Merger...................................................2
Section 2.2       Effective Date and Effective Time............................2
Section 2.3       Merger Consideration.........................................3
Section 2.4       Rights as Shareholders; Stock Transfers......................4
Section 2.5       Exchange Procedures..........................................4
Section 2.6       Client Look-Backs............................................5
Section 2.7       Additional Consideration.....................................6
Section 2.8       Closing......................................................9
Section 2.9       Estimated Closing Balance Sheet.............................10
Section 2.10      Deliveries at the Closing...................................11
Section 2.11      Legending of Securities.....................................12

                                   ARTICLE III
                        REPRESENTATIONS AND WARRANTIES OF
                           THE SELLERS AND THE COMPANY

Section 3.1       Organization and Related Matters............................13
Section 3.2       Capital Structure...........................................13
Section 3.3       Title.......................................................14
Section 3.4       Authority; No Violation.....................................14
Section 3.5       Consents and Approvals......................................15
Section 3.6       Government Regulation.......................................16
Section 3.7       Properties..................................................21
Section 3.8       Financial Statements........................................22
Section 3.9       Absence of Changes..........................................23
Section 3.10      Contracts...................................................25
Section 3.11      No Other Brokers............................................27
Section 3.12      Legal Proceedings...........................................27
Section 3.13      Compliance with Applicable Law..............................27
Section 3.14      Insurance...................................................28
</TABLE>

                                      -i-
<PAGE>   3

<TABLE>
<S>               <C>                                                        <C>
Section 3.15      Employee Benefit Plans; ERISA...............................28
Section 3.16      Technology and Intellectual Property........................30
Section 3.17      Taxes.......................................................32
Section 3.18      Assets Under Management.....................................35
Section 3.19      Affiliate Transactions......................................35
Section 3.20      Labor Matters, etc..........................................35
Section 3.21      Derivative Products.........................................35
Section 3.22      Books and Records...........................................36
Section 3.23      Environmental Matters.......................................36
Section 3.24      Disclosure..................................................37
Section 3.25      Investment..................................................37

                                   ARTICLE IV
                        REPRESENTATIONS AND WARRANTIES OF
                             BUYER AND BUYER PARENT

Section 4.1       Organization and Related Matters............................38
Section 4.2       Authority; No Violation.....................................39
Section 4.3       Consents and Approvals......................................39
Section 4.4       Buyer Financing.............................................40
Section 4.5       No Other Broker.............................................40
Section 4.6       Legal Proceedings...........................................40
Section 4.7       Capitalization..............................................40
Section 4.8       Buyer Parent Reports........................................41
Section 4.9       Taxes.......................................................41

                                    ARTICLE V
                                    COVENANTS

Section 5.1       Conduct of Business by the Company..........................41
Section 5.2       No Solicitation, etc........................................43
Section 5.3       Consents....................................................43
Section 5.4       Investment Company Matters..................................46
Section 5.5       Insurance...................................................47
Section 5.6       Further Assurances..........................................47
Section 5.7       Efforts of Parties to Close.................................47
Section 5.8       Confidentiality and Announcements...........................48
Section 5.9       Access, Certain Communications..............................48
Section 5.10      Regulatory Matters; Third Party Consents....................49
Section 5.11      Expenses....................................................50
</TABLE>

                                     -ii-
<PAGE>   4

<TABLE>
<S>               <C>                                                        <C>
Section 5.12      Non-Foreign Person Affidavit................................50
Section 5.13      Releases....................................................50
Section 5.14      Retention Bonus Plan........................................51
Section 5.15      Option Holders..............................................51
Section 5.16      Termination of Employee Benefit Plans.......................51
Section 5.17      Shareholder Approval of Certain Matters.....................52
Section 5.18      Seller Representative Approval..............................52
Section 5.19      Payment of Preferred Dividend Amount........................52

                                   ARTICLE VI
                              CONDITIONS TO CLOSING

Section 6.1       Conditions to Buyer's and Buyer Parent's Obligations........53
Section 6.2       Conditions to the Company and the Sellers' Obligations......54
Section 6.3       Mutual Conditions...........................................55

                                   ARTICLE VII
                                 INDEMNIFICATION

Section 7.1       Survival of Representations, Warranties and Covenants.......55
Section 7.2       Obligations of the Common Sellers...........................56
Section 7.3       Obligations of the Preferred Seller.........................57
Section 7.4       Obligations of Buyer and Buyer Parent.......................58
Section 7.5       Procedure...................................................59
Section 7.6       Survival of Indemnity.......................................61
Section 7.7       Minimum Losses..............................................61
Section 7.8       Maximum Indemnification.....................................61
Section 7.9       Subrogation.................................................62
Section 7.10      Adjustments to Indemnification Obligations..................62
Section 7.11      Exclusive Remedy............................................62
Section 7.12      Right of Off-Set/Set-Off....................................62
Section 7.13      Adjustment..................................................63
Section 7.14      Seller Representative.......................................63

                                  ARTICLE VIII
                                   TAX MATTERS

Section 8.1       Tax Matters.................................................64
</TABLE>

                                     -iii-
<PAGE>   5

<TABLE>
<S>               <C>                                                        <C>
                                   ARTICLE IX
                                   TERMINATION

Section 9.1       Termination.................................................66
Section 9.2       Survival After Termination..................................67

                                    ARTICLE X
                                  MISCELLANEOUS

Section 10.1      Amendments; Extension; Waiver...............................68
Section 10.2      Entire Agreement............................................68
Section 10.3      Interpretation..............................................68
Section 10.4      Severability................................................68
Section 10.5      Notices.....................................................69
Section 10.6      Binding Effect; Persons Benefiting; Assignment..............70
Section 10.7      Counterparts................................................70
Section 10.8      Governing Law...............................................70
Section 10.9      Specific Performance........................................71
Section 10.10     Waiver of Jury Trial and Punitive Damages...................71
Section 10.11     Seller Representative.......................................71

Annex A:          Definitions................................................A-1

Annex B:          Retention Plan.............................................B-1

Annex C:          Employment Agreement.......................................C-1
</TABLE>

                                      -iv-
<PAGE>   6

                                MERGER AGREEMENT

         MERGER AGREEMENT, dated as of February 28, 2001, by and among AMVESCAP
PLC, a company incorporated under the laws of England ("Buyer Parent"), AVZ,
Inc., a Delaware corporation and a direct wholly owned subsidiary of Buyer
Parent ("Buyer", and together with Buyer Parent, the "Buyers"), National Asset
Management Corporation, the Persons set forth under the heading "Common Sellers"
on the signature pages (each a "Common Seller"), the Person set forth under the
heading "Preferred Seller" on the signature pages (the "Preferred Seller", and
together with the Common Sellers, the "Sellers") and the Person set forth under
the heading "Option Holder" on the signature pages.

                                    RECITALS

         WHEREAS, the Common Sellers and the Preferred Seller are the owners of
all of the shares of Common Stock and Preferred Stock, respectively, of the
Company;

         WHEREAS, Buyer Parent and its wholly owned subsidiary, Buyer, desire to
acquire the Company by means of a merger of the Company with and into Buyer on
the terms and conditions set forth herein, with Buyer being the surviving
corporation of such merger;

         WHEREAS, in order to induce Buyer Parent and Buyer to consummate such
merger, the Sellers have agreed to make certain representations and warranties
to the Buyers with respect to the business, affairs and condition of the
Company, and the Sellers desire to make certain other agreements in connection
with and to facilitate such merger, including the agreement of each Seller to
approve such merger; and

         WHEREAS, certain employees of the Company have entered into Employment
Agreements with the Buyer concurrently with the execution of this Agreement.

         NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be bound hereby, the parties hereby agree as
follows:

<PAGE>   7

                                    ARTICLE I
                                   DEFINITIONS

         Section 1.1 Definitions. For all purposes of this Agreement,
capitalized terms used herein without definitions shall have their respective
meanings as set forth in Annex A hereto.

                                   ARTICLE II
                                   THE MERGER

         Section 2.1 The Merger.

         (a) At the Effective Time, the Company shall merge with and into Buyer
(the "Merger"), the separate corporate existence of the Company shall cease and
Buyer shall survive and continue to exist as a Delaware corporation (the
"Surviving Corporation").

         (b) Subject to the satisfaction or waiver of the conditions set forth
in Article VI, the Merger shall become effective upon the occurrence of the
filing in the office of the Secretary of State of the State of Delaware of a
certificate of merger in accordance with Section 251 of the DGCL and the filing
in the office of the Secretary of State of the State of Kentucky of articles of
merger in accordance with Section 271B.11-050 of the KBCA, or such later date
and time as may be set forth in such certificate or articles. The Merger shall
have the effects prescribed in the DGCL and the KBCA.

         (c) Articles of Incorporation and By-Laws. The certificate of
incorporation and by-laws of the Surviving Corporation immediately after the
Merger shall be those of Buyer as in effect immediately prior to the Effective
Time.

         (d) Directors and Officers of Surviving Corporation. The directors and
officers of the Surviving Corporation immediately after the Merger shall be the
directors and officers of Buyer immediately prior to the Effective Time, until
such time as their successors shall be duly elected and qualified.

         Section 2.2 Effective Date and Effective Time. Subject to the
satisfaction or waiver of the conditions set forth in Article VI, the parties
shall cause the effective date of the Merger (the "Effective Date") to occur (i)
as soon as practical following the Closing but in no event later than the close
of business on the Closing Date, or (ii) such other date to which the parties
may agree in writing. The time on the

                                       2
<PAGE>   8

Effective Date when the Merger shall become effective is referred to as the
"Effective Time."

         Section 2.3 Merger Consideration. Subject to the provisions of this
Agreement, at the Effective Time, automatically by virtue of the Merger and
without any action on the part of any Person:

         (a) subject to subsection (c) below, the one share of Preferred Stock
issued and outstanding immediately prior to the Effective Time shall become and
be converted into solely the right to receive (i) cash in the amount of (A) 50%
of the Cash Merger Consideration less (B) $1,000,000 (such result, the
"Preferred Stock Cash Consideration"), (ii) 50% of the Equity Merger
Consideration (the "Preferred Stock Equity Consideration"), and (iii) the
Aggregate Preferred Contingent Consideration, if any, as provided in Section 2.7
below; and

         (b) subject to subsection (c) below, each share of Common Stock issued
and outstanding immediately prior to the Effective Time shall become and be
converted into solely the right to receive (i) cash in an amount equal to (A)
the Cash Merger Consideration minus (B) the Preferred Stock Cash Consideration
(such result, the "Adjusted Common Stock Cash Consideration"), with the result
of such subtraction being divided by (C) the number of shares of Common Stock
issued and outstanding immediately prior to the Effective Time (the result of
the foregoing computation being the "Per Share Cash Consideration") and (ii)
that number of Parent Shares equal to (X) the Equity Merger Consideration minus
(Y) the Preferred Stock Equity Consideration, with the result of such
subtraction being divided by (Z) the number of shares of Common Stock
outstanding immediately prior to the Effective Time (the result of the foregoing
computation being the "Per Share Equity Consideration"), and (iii) the quotient
of the Aggregate Common Contingent Consideration, if any, payable with respect
to a share of Common Stock as provided in Section 2.7 below, divided by the
number of shares of Common Stock issued and outstanding immediately prior to the
Effective Time.

         (c) Notwithstanding any other provision of this Agreement, the amount
of Preferred Stock Cash Consideration and Adjusted Common Stock Cash
Consideration shall be increased and/or decreased, as the case may be, to give
effect to the proposition that the Preferred Seller will receive an amount of
Preferred Stock Cash Consideration under subsection (a) that such Preferred
Seller would have received if there was no increase or decrease, as the case may
be, to the Adjusted Merger Consideration as a result of a Net Capital Excess or
Net Capital Shortfall, respectively.

                                       3
<PAGE>   9

         (d) Outstanding Buyer Stock. Each share of the capital stock of Buyer
issued and outstanding immediately prior to the Effective Time shall remain
issued and outstanding and unaffected by the Merger.

         Section 2.4 Rights as Shareholders; Stock Transfers. At the Effective
Time, holders of the Preferred Stock and the Common Stock shall cease to be, and
shall have no rights as, shareholders of the Company, except to receive the
consideration payable in respect of such stock as provided in this Article II.
Upon and after the Effective Time, the Company's stock transfer books will be
closed and no transfers of shares of Preferred Stock or Common Stock will be
made.

         Section 2.5 Exchange Procedures.

         (a) At the Effective Time, the Surviving Corporation or Buyer Parent
shall:

                  (i) pay the Preferred Stock Cash Consideration by Wire
         Transfer to the holder of the Preferred Stock, against delivery to the
         Surviving Corporation by or on behalf of such holder of the
         certificate, endorsed by such holder for surrender and cancellation,
         representing the share of Preferred Stock issued and outstanding
         immediately prior to the Effective Time and owned by such holder;

                  (ii) pay by Wire Transfer to each holder of Common Stock,
         against delivery to the Surviving Corporation by or on behalf of such
         holder of the certificate or certificates, endorsed by such holder for
         surrender and cancellation, representing the shares of Common Stock
         issued and outstanding immediately prior to the Effective Time and
         respectively owned by such holder, the Per Share Cash Consideration
         payable in respect of such shares; and

                  (iii) issue and deliver to (A) the holder of the Preferred
         Stock, against delivery of the certificate representing the shares of
         Preferred Stock issued and outstanding immediately prior to the
         Effective Time and owned by such holder immediately prior to the
         Effective Time, a certificate representing the whole number of shares
         of Parent Stock constituting the Preferred Stock Equity Consideration,
         and (B) each holder of Common Stock, against delivery of certificates
         representing shares of Common Stock issued and outstanding immediately
         prior to the Effective Time and respectively owned by such holder, a
         certificate representing Per Share Equity Consideration issuable in
         respect of the shares of Common Stock so delivered, in each case
         disregarding any fractional shares resulting from the computation of
         the

                                       4
<PAGE>   10

         number of shares of Parent Stock issuable to such holder in respect of
         shares of Preferred Stock or Common Stock respectively owned by such
         holder immediately prior to the Closing.

         (b) The Surviving Corporation shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of Preferred Stock or Common Stock, such amounts as it is required to
deduct and withhold with respect to the making of such payment under the Code,
or any applicable provision of state, local or foreign tax law; provided,
however, that if a Seller provides the affidavit referred to in Section 5.12, no
deduction may be made under Section 1445 of the Code in respect of any amounts
payable to such Seller. To the extent that amounts are withheld by the Surviving
Corporation, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Preferred Stock or Common
Stock, as the case may be, in respect of which such deduction and withholding
was made by the Surviving Corporation.

         Section 2.6 Client Look-Backs. Solely for purposes of calculating the
Closing Revenue Run-Rate and the amount of the Adjusted Merger Consideration:

         (a) To the extent that Buyer Parent and the Seller Representative are
unable to agree that there exists for any Client a notification or
communication, whether written or oral, that would reasonably be construed as
equivalent to a statement that such Client will terminate or intends to
terminate its Investment Management Agreement with the Company within sixty (60)
days following the Closing Date under Section 5.3, such Clients will not be
deemed to have given their Consent at the Closing Date, but if, and to the
extent, that any such Client has not terminated, or advised the company, either
orally or in writing, of its intention to terminate, its Investment Management
Agreement during the sixty (60) day period following the Closing Date, such
Consent shall then be deemed to have been given as of the last day of the
calendar month ending prior to the Closing Date and Buyer Parent shall make a
payment to the Sellers promptly following the end of such sixty (60) day period
pro rata to each Seller (based on each Sellers' share of the aggregate Merger
Consideration paid to the Sellers under Article II) in an aggregate amount equal
to the amount that would have been paid to the Sellers in respect of all such
Clients had such Clients given such Consent on or prior to the last day of the
calendar month ending prior to the Closing Date.

         (b) To the extent that any Person enters into an Investment Management
Agreement with the Company on or prior to the Closing Date but does not deposit
any funds with the Company in respect of such Investment Management Agreement on
or prior to the Closing Date, if, and to the extent, that such Person thereafter
deposits any funds in respect of such Investment Management Agreement during the

                                       5
<PAGE>   11

sixty (60) day period following the Closing Date, such funds shall be deemed to
be included in Adjusted Closing Assets Under Management as if such funds had
been contributed as of the last day of the calendar month ending prior to the
Closing Date and Buyer Parent shall make a payment to the Sellers promptly
following the end of such sixty (60) day period pro rata to each Seller (based
on each Sellers' share of the aggregate Merger Consideration paid to the Sellers
under Article II) in an amount that would have been paid to the Sellers had such
funds been deposited on or prior to the last day of the calendar month ending
prior to the Closing Date.

         (c) Shares of Parent Stock that are issuable pursuant to subparagraphs
(a) and (b) of this Section 2.6 shall be determined in the same manner as the
number of shares of Parent Stock comprising the Preferred Stock Equity
Consideration and the Per Share Equity Consideration is determined, and all
fractional shares resulting from such determination as to any Seller shall be
disregarded.

         Section 2.7 Additional Consideration.

         (a) As additional merger consideration, the Surviving Corporation
agrees to pay to the Preferred Seller and each Common Seller the Contingent
Consideration, if any, as follows:

                  (i) For the first Yearly Period, an amount equal to (A) if the
         Yearly Period CAGR is equal to or less than 15%, 0, or (B) if the
         Yearly Period CAGR is equal to or greater than 40%, 100% of the Annual
         Contingent Cash Consideration and 100% of the Annual Contingent Equity
         Consideration, or (C) if the Yearly Period CAGR is greater than 15% but
         less than 40%, an amount equal to the sum of (i) the product of (A)
         100% of the Annual Contingent Cash Consideration and (B) the Contingent
         Percentage and (ii) the product of (A) 100% of the Annual Contingent
         Equity Consideration and (B) the Contingent Percentage.

                  (ii) For the second Yearly Period, an amount equal to (A) if
         the Yearly Period CAGR is equal to or less than 15%, 0, or (B) if the
         Yearly Period CAGR is equal to or greater than 40%, 200% of the Annual
         Contingent Cash Consideration and 200% of the Annual Contingent Equity
         Consideration less the amount, if any, of Contingent Cash Consideration
         and Contingent Equity Consideration, respectively, paid pursuant to
         Section 2.7(a)(i), or (C) if the Yearly Period CAGR is greater than 15%
         but less than 40%, an amount equal to the sum of (i) the product of (A)
         200% of the Annual Contingent Cash Consideration and (B) the Contingent
         Percentage for such Yearly Period and (ii) the product of (A) 200% of
         the Annual Contingent Equity Consideration and (B) the Contingent
         Percentage for such

                                       6
<PAGE>   12

         Yearly Period less (iii) the amount, if any, of Contingent Cash
         Consideration and Contingent Equity Consideration, respectively, paid
         pursuant to Section 2.7(a)(i); provided that in no case shall such
         payment be less than 0.

                  (iii) For the third Yearly Period, an amount equal to (A) if
         the Yearly Period CAGR is equal to or less than 15%, 0, or (B) if the
         Yearly Period CAGR is equal to or greater than 40%, 300% of the Annual
         Contingent Cash Consideration and 300% of the Annual Contingent Equity
         Consideration less the amount, if any, of Contingent Cash Consideration
         and Contingent Equity Consideration, respectively, paid pursuant to
         Section 2.7(a)(i) and (ii), or (C) if the Yearly Period CAGR is greater
         than 15% but less than 40%, an amount equal to the sum of (i) the
         product of (A) 300% of the Annual Contingent Cash Consideration and (B)
         the Contingent Percentage for such Yearly Period and (ii) the product
         of (A) 300% of the Annual Contingent Equity Consideration and (B) the
         Contingent Percentage for such Yearly Period less (iii) the amount, if
         any, of Contingent Cash Consideration and Contingent Equity
         Consideration, respectively, paid pursuant to Section 2.7(a)(i) and
         (ii); provided that in no case shall such payment be less than 0.

         (b) At the later of (x) sixty (60) days following the end of the Yearly
Period with respect to which any Annual Contingent Payment is payable or (y)
five (5) Business Days following the determination of the amount of Annual
Contingent Consideration for a Yearly Period pursuant to subsection (c)(iii)
below, the Surviving Corporation or Buyer Parent shall pay such Annual
Contingent Consideration to the Preferred Seller and each Common Seller as
follows:

                  (i) With respect to the Preferred Seller, (A) Wire Transfer to
         the Preferred Seller an amount in cash equal to the product of (1) the
         Annual Cash Contingent Payment in respect of such Yearly Period and (2)
         the Preferred Participation Percentage (the "Annual Preferred
         Contingent Cash Consideration") and (B) issue and deliver to the
         Preferred Seller certificates representing a number of shares of Parent
         Stock equal to the product of (1) the Annual Equity Contingent Payment
         in respect of such Yearly Period and (2) the Preferred Participation
         Percentage, rounded down to the nearest whole number (the "Annual
         Preferred Contingent Equity Consideration") (the sum of each such
         amounts, if any, for all Yearly Periods, the "Aggregate Preferred
         Contingent Consideration"); and

                  (ii) With respect to each Common Seller, (A) Wire Transfer to
         each Common Seller an amount in cash equal to the product of (1) Common
         Seller Participation Percentage and (2) (x) the Annual Cash Contingent

                                       7
<PAGE>   13

         Payment in respect of such Yearly Period less (y) the Annual Preferred
         Contingent Cash Consideration and (B) issue and deliver to each Common
         Seller certificates representing a number of shares of Parent Stock
         equal to the product of (1) Common Seller Participation Percentage and
         (2) (x) the Annual Equity Contingent Payment in respect of such Yearly
         Period less (y) the Annual Preferred Contingent Equity Consideration in
         respect of such Yearly Period, rounded down to the nearest whole number
         (the sum of each such amounts, if any, for all Yearly Periods, the
         "Aggregate Common Contingent Consideration").

         (c) As promptly as practicable, but in no event later than forty-five
(45) days after the end of each Yearly Period, the Surviving Corporation shall
cause to be prepared and delivered to the Seller Representative and the
Preferred Seller a statement setting forth the amount, if any, of the Annual
Contingent Payment in respect of such Yearly Period payable pursuant to this
Section 2.7 (the "Contingent Payment Statement").

                  (i) The Seller Representative and the Preferred Seller and
         their representatives shall have the right to review the workpapers,
         schedules and other documents and information prepared or reviewed by
         the Surviving Corporation in connection with each Annual Contingent
         Payment. The Surviving Corporation shall provide the Seller
         Representative and the Preferred Seller and their representatives
         reasonable access to the officers, employees, contracts, books and
         records of the Surviving Corporation as the Seller Representative
         and/or the Preferred Seller or their representatives may reasonably
         request in order to verify the amount of any Annual Contingent Payment.

                  (ii) Within fifteen (15) days after the delivery of the
         Contingent Payment Statement, the Seller Representative shall notify
         the Surviving Corporation in writing of any objection thereto,
         specifying in reasonable detail any such objection. If the Seller
         Representative does not object in writing to the Contingent Payment
         Statement within fifteen (15) days from receipt thereof or the
         Surviving Corporation and the Seller Representative agree on the
         resolution of all objections prior to the lapse of sixty (60) days
         following the end of the Yearly Period to which such Contingent Payment
         Statement relates, the Contingent Payment Statement (including any
         changes as mutually agreed) shall be final and binding on all parties.
         The Seller Representative and the Surviving Corporation agree to
         negotiate in good faith to attempt to resolve any objection made under
         this subsection; provided that if either party, in its sole discretion,
         terminates such negotiations, then not later than ten (10) days after
         such termination the dispute shall be submitted

                                       8
<PAGE>   14

         for resolution by arbitration in accordance with the Commercial
         Arbitration Rules of the American Arbitration Association. Such
         arbitration shall be by a panel of three arbitrators, each of which
         shall be experienced in the matters at issue. One such arbitrator shall
         be selected by each of the Buyer Parent and the Seller Representative,
         and the two arbitrators so selected shall select the third arbitrator.
         The arbitration shall be held at such place in Louisville, Kentucky as
         may be specified by the arbitrators. The decision of the arbitrators
         shall be final and binding as to all matters submitted to arbitration
         pursuant to this Agreement. Each of Buyer Parent and the Seller
         Representative shall bear its own costs and expenses incurred in
         connection with any such arbitration proceeding (including reasonable
         attorney's fees), and the fees and expenses of the arbitrators shall be
         paid by the party against which the decision is rendered, or if no
         decision is rendered, such fees and expenses shall be borne equally
         between the Buyer Parent and the Seller Representative. If the
         arbitrators' decision is a compromise, the determination of which party
         or parties bears the fees and expenses of the arbitrators shall be made
         by the arbitrators on the basis of the arbitrators' assessment of the
         relative merits of the parties' positions.

         (d) The Surviving Corporation shall pay interest to the Sellers pro
rata (based on each Seller's share of the aggregate Merger Consideration paid
under Article II) in respect of the amount of any Annual Contingent
Consideration due in respect of a Yearly Period from the date that is sixty (60)
days after the end of such Yearly Period up to and including the date such
payment is actually made under this Section 2.7 at an annual rate of LIBOR plus
two percent (2%).

         (e) The Buyers and Sellers agree to treat as interest the cash portion
of any Contingent Consideration to be received by the Sellers to the extent that
any portion of such Contingent Consideration is treated as interest under
Section 483 of the Code.

         Section 2.8 Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall be at 10:00 A.M. at
the offices of Alston & Bird LLP, 90 Park Avenue, New York, New York 10016, or
at such other location as may be mutually agreed to by Buyer Parent and the
Seller Representative three (3) Business Days after the later of (a) April 30,
2001 or (b) the date on which all of the conditions in Article VI have been
satisfied or waived, or on such other date as may be mutually agreed to by Buyer
Parent and the Seller Representative (the "Closing Date").

                                       9
<PAGE>   15

         Section 2.9 Estimated Closing Balance Sheet.

         (a) Not later than five (5) Business Days prior to the Closing Date,
the Common Sellers shall cause the Company to deliver to the Buyers a pro forma
estimated balance sheet of the Company as of the Closing Date, reflecting the
good faith best estimate of the Common Sellers as to the value of the tangible
assets and the amount of the liabilities of the Company as of the Closing Date
and prepared in accordance with GAAP applied consistently with the preparation
of the unaudited balance sheets of the Company included in the Financial
Statements (and after giving effect to the payment of the Preferred Divided
Amount); provided, however, that, whether or not in accordance with GAAP or
consistent with past practices, such pro forma estimated balance sheet shall
include (i) an accrual for all bonuses payable, whether before or after the
Closing Date, with respect to or for services provided by employees of the
Company prior to the Closing Date, (ii) adequate accruals for all Tax
liabilities of the Company other than for deferred Tax liabilities that reflect
timing differences between book and Tax income (including, without limitation,
deferred Tax liabilities and deferred payments due after the Closing Date
pursuant to the settlement of Tax liabilities for periods occurring prior to the
Closing Date) relating to any tax periods ended on or prior to the Closing Date,
(iii) adequate accruals, if any, for all obligations of the Company to pay any
deferred compensation with respect to or for services provided by employees of
the Company prior to the Closing Date and (iv) an accrual for all expenses
(without related tax benefits) incurred by the Company in connection with the
transactions contemplated by this Agreement (including, without limitation, the
investment banking and legal fees described in Section 3.11(a)). Such pro forma
estimated balance sheet is herein referred to as the "Estimated Closing Balance
Sheet". The Estimated Closing Balance Sheet, when so delivered, shall be
accompanied by a Schedule (the "Closing Schedule") prepared by the chief
financial officer of the Company, showing the Net Capital as of the Closing Date
as reflected on the Estimated Closing Balance Sheet.

         (b) As soon as practicable after the Closing Date, but in no case later
than sixty (60) days thereafter, Buyer Parent shall deliver to the Seller
Representative a statement setting forth the final calculation of Net Capital
(the "Final Statement") and Buyer Parent or the Common Sellers, as the case may
be, shall pay such other party the amount by which the amount of Net Capital set
forth therein is greater than or less than the amount of such Net Capital set
forth in the Estimated Closing Balance Sheet no later than the earlier of (i)
fifteen (15) days after the receipt of such Final Statement or (ii) if the
Seller Representative has any objection to such Final Statement, five (5)
Business Days following the determination by the arbitrators as described below
of the amount of the payment due under this Section 2.9(b). Within (15) days
after the delivery of the Final Statement, the Seller Representative shall
notify Buyer Parent in writing of any objection thereto, specifying in
reasonable

                                       10
<PAGE>   16

detail any such objection. If the Seller Representative does not object in
writing to the statement within fifteen (15) days from receipt thereof, the
statement shall be final and binding on the Buyers and Common Sellers, and Buyer
Parent or the Common Sellers (pro rata in proportion to the aggregate amount of
Merger Consideration received by each such Common Seller under Article II), as
the case may be, shall pay such other party the amount by which the amount of
Net Capital set forth in the Final Statement is greater than or less than the
amount of such Net Capital set forth in the Estimated Closing Balance Sheet. The
Seller Representative and Buyer Parent agree to negotiate in good faith to
attempt to resolve any objection made under this subsection; provided that if
any party, in its sole discretion, terminates such negotiations, then not later
than ten (10) days after such termination, the dispute shall be submitted to a
nationally recognized accounting firm agreed to between the Buyers and Common
Sellers for resolution. The Seller Representative and Surviving Corporation
shall use reasonable efforts to cause such accounting firm to render its report
within ninety (90) days of appointment and such determination as to the amount
of Net Capital shall be final and binding on all of the Buyers and Common
Sellers. If such determination is not made prior to the lapse of ninety (90)
days following the Closing Date, the date specified in this subsection (b) on
which any payment in respect of the amount of the excess or deficit Net Capital,
as the case may be, is to be paid shall be extended to that date that is five
(5) Business Days after the date on which such determination is made. The fees
and expenses of the accounting firm incurred under this Section 2.9(b) shall be
shared equally among the Seller Representative and the Surviving Corporation.

         Section 2.10 Deliveries at the Closing.

         (a) Not less than three (3) Business Days prior to the Closing Date,
the Seller Representative and the Preferred Seller shall deliver Wire Transfer
instructions to the Buyer for the Common Sellers and the Preferred Seller,
respectively.

         (b) At the Closing, each Common Seller and the Preferred Seller shall
deliver, or shall cause to be delivered, to Buyer any documents required to be
delivered by the Sellers pursuant to Section 5.12.

         (c) At the Closing, the Company shall deliver, or shall cause to be
delivered, to Buyer the following:

                  (i) certificate of the Secretary of State of the State of
         Kentucky as to the good standing of the Company dated as of a date not
         earlier than five Business Days prior to the Closing Date; and

                                       11
<PAGE>   17

                  (ii) a true copy of the Amended Articles of Incorporation of
         the Company certified as being true and correct by the Secretary of
         State of the State of Kentucky as of a date not earlier than five (5)
         Business Days prior to the Closing;

                  (iii) a copy of the bylaws, and all amendments thereto, of the
         Company as in effect at the time of the Closing certified as true and
         correct by the Secretary of the Company;

                  (iv) documents required to be delivered by the Company
         pursuant to Section 5.17; and

                  (v) documents required to be delivered by the Company pursuant
         to Section 6.1.

         (d) At the Closing, Buyer Parent and Buyer shall deliver, or shall
cause to be delivered the documents required to be delivered pursuant to Section
6.2.

         Section 2.11 Legending of Securities. The shares of Parent Stock to be
issued in connection with this Agreement will be issued in a transaction exempt
from registration under the Securities Act by reason of Section 4(2) thereof or
Regulation D promulgated thereunder. Buyer Parent is relying on the
representations of the Company and the Sellers with respect to such exemption.
Stop transfer instructions will be given to Buyer Parent's transfer agent that
shall only be applicable to a sale or other transfer within the United States
with respect to the shares of Parent Stock received by each Seller pursuant to
the Merger contemplated hereby and there will be placed on the certificates for
such shares, or shares issued in substitution thereof, a legend stating in
substance:

         "The securities evidenced by this certificate have been issued and sold
         without registration under the United States Securities Act of 1933, as
         amended (the "Securities Act"), or the securities laws of any state of
         the United States (a "State Act") in reliance upon certain exemptions
         from registration under said Acts. The securities evidenced by this
         certificate cannot be sold, assigned or otherwise transferred within
         the United States unless such sale, assignment or other transfer is (1)
         made pursuant to an effective registration statement under the
         Securities Act and in accordance with each applicable State Act or (2)
         exempt from, or not subject to, the Securities Act and each applicable
         State Act. If the proposed sale, assignment or other transfer within
         the United States will be made pursuant to clause (2) above, the holder
         must, prior to such sale, assignment or other transfer, furnish to the

                                       12
<PAGE>   18

         issuer such certifications, legal opinions and other information as the
         issuer may reasonably require to determine that such sale, assignment
         or other transfer is being made in accordance with such clause."

The foregoing legend will also be placed on any certificate representing
securities issued subsequent to the original issuance of the Parent Stock
pursuant to the Merger as a result of any transfer of such shares or any stock
dividend, stock split, or other recapitalization as long as the Parent Stock
issued pursuant to the Merger has not been transferred in such manner to justify
the removal of the legend therefrom.

                                   ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE SELLERS
                                 AND THE COMPANY

         Each Common Seller severally as to the representations and warranties
relating to such Common Seller in Sections 3.3 and 3.4, and jointly and
severally as to all other representations and warranties contained in this
Article III, represents and warrants to Buyer and Buyer Parent and the Preferred
Seller severally as to the representations and warranties in Sections 3.3, 3.4,
3.5, 3.11(b), 3.24 and 3.25 solely as such matters therein are applicable to the
Preferred Seller, represents and warrants to Buyer and Buyer Parent, as follows:

         Section 3.1 Organization and Related Matters. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Kentucky and has the requisite legal power and authority to
carry on its Business as now being conducted and to own, lease and operate all
of its properties and assets, and is duly qualified to do business in each
jurisdiction shown in Section 3.1 of the Company Disclosure Memorandum in which
the nature of the Business conducted by it or the character or location of the
properties and assets owned, leased or operated by it makes such registration,
qualification or licensing necessary, except where the failure to be so
qualified would not have a Company Material Adverse Effect.

         Section 3.2 Capital Structure.

         (a) The authorized Capital Stock of the Company consists of (i) 2,000
shares of Common Stock, of which 101 shares as of the date hereof are issued and
outstanding and (ii) 1 share of Preferred Stock, which is issued and
outstanding. All of the outstanding shares of Capital Stock have been duly
authorized and validly issued and are fully paid and nonassessable and are owned
beneficially and of record by the Sellers in the respective amounts specified on
Section 3.2(a) of the Company

                                       13
<PAGE>   19

Disclosure Memorandum, and none of such shares were issued in violation of any
preemptive rights or Applicable Law. Except as set forth in Section 3.2(a) of
the Company Disclosure Memorandum, there are no outstanding options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings to which
the Company is a party or by which the Company is bound obligating the Company
to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of Capital Stock or obligating the Company to issue, grant or enter into
any such option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Except as set forth in Section 3.2(a) of the Company Disclosure
Memorandum, there are no outstanding contractual obligations or arrangements of
the Company or any shareholder of the Company to repurchase, redeem or otherwise
acquire any shares of Capital Stock of the Company.

         (b) Subsidiaries. The Company does not have any subsidiaries and does
not own beneficially, directly or indirectly, any securities, rights or
interests of any Person, or any interest in a partnership or joint venture of
any kind, except for such securities, rights or interests beneficially owned on
behalf of an Investment Company or Client.

         Section 3.3 Title. Each Common Seller and the Preferred Seller owns,
and will own at the time of Closing, in each case beneficially and of record,
the shares of Common Stock and Preferred Stock, respectively, of the Company set
forth in Section 3.2(a) of the Company Disclosure Memorandum, free and clear of
any Encumbrances other than any Encumbrance created by or attributed to the
Buyers.

         Section 3.4 Authority; No Violation.

         (a) The Company, the Preferred Seller and each Common Seller that is
not a natural person have full legal power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Management Committee of the Company which has unanimously recommended that the
Company's shareholders approve this Agreement and the transactions contemplated
herein. After full disclosure of this Agreement and the transactions
contemplated herein (including all employment, compensation and other
arrangements with any officer, director or shareholder of the Company) by the
directors and officers of the Company to all of the Company's shareholders, all
holders of the capital stock of the Company having the right to vote upon the
Merger (including by all holders of capital stock of the Company having the
right to vote upon the Merger separately as a class) have duly and validly
approved this Agreement and the transactions contemplated hereby, and no other
proceedings on the part of the Company or any

                                       14
<PAGE>   20

shareholder or class of shareholders of the Company are necessary to approve
this Agreement or to consummate the transactions contemplated hereby. Each
Common Seller that is a natural person has full capacity to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company, each Common Seller and the Preferred
Seller and (assuming the due authorization, execution and delivery of this
Agreement by Buyers) constitutes a valid and binding obligation of the Company,
each Common Seller and the Preferred Seller, enforceable against the Company,
each such Common Seller and the Preferred Seller in accordance with its terms,
except as enforcement may be limited by general principles of equity whether
applied in a court of law or court of equity and by bankruptcy, insolvency,
moratorium and similar laws affecting creditors' rights and remedies generally.

         (b) Neither the execution and delivery of this Agreement by the
Company, any Common Seller or the Preferred Seller, nor the consummation by the
Company, any such Common Seller or the Preferred Seller, of the transactions
contemplated hereby to be performed by them, nor compliance by the Company, any
such Common Seller or the Preferred Seller with any of the terms or provisions
hereof, will (i) violate any provision of the Organizational Documents of the
Company or the Preferred Seller, or (ii) assuming the Consents set forth in
Section 3.5 of the Company Disclosure Memorandum hereof are duly obtained (A)
violate any Applicable Law applicable to the Company, any Common Seller or the
Preferred Seller, or to any of their properties, Contracts or assets, or (B)
violate, conflict with, result in a breach of any provision of or the loss of
any benefit under, constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any material Encumbrance upon, any of
the assets of the Company, any Common Seller or the Preferred Seller, or any
Contract, Lease, Indebtedness, note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the
Company, any Common Seller or the Preferred Seller is a party, or by which the
Company, any such Common Seller or the Preferred Seller, or any of their
properties or assets, may be bound or affected, except, in the case of this
clause (ii), any Permitted Encumbrance or such violation, conflict, breach,
losses, default, termination, cancellation or Encumbrance which is not a
Permitted Encumbrance and which would not individually or in the aggregate have
a Company Material Adverse Effect.

         Section 3.5 Consents and Approvals. Except for (a) such Consents and
notices as are set forth in Section 3.5 of the Company Disclosure Memorandum,
(b) the applicable filings under the HSR Act, and (c) such other Consents the
failure of

                                       15
<PAGE>   21

which to be made or obtained are not reasonably expected to have a Company
Material Adverse Effect, no Consents with any Governmental Authority or third
party are necessary in connection with (i) the execution and delivery by the
Company, each Common Seller and the Preferred Seller of this Agreement and (ii)
the consummation by the Company, each such Common Seller and the Preferred
Seller of the transactions contemplated hereby. Neither any Common Seller nor
the Preferred Seller is aware of any reason that would cause the Consents of any
Governmental Authority or third party to this Agreement and the transactions
provided for herein as such Consents relate to such Common Seller or the
Preferred Seller, as the case may be, to not be received without undue delay,
and without the imposition thereon of conditions, restrictions or requirements
that, individually or in the aggregate, could reasonably be expected to have a
Company Material Adverse Effect or a material adverse effect on the Surviving
Corporation.

         Section 3.6 Government Regulation.

         (a) Filings. The Company is duly registered or licensed in the
capacities shown in Section 3.6(a) of the Company Disclosure Memorandum, and has
filed, and each Investment Company for which the Company is an investment
advisor, sub-advisor, underwriter or sponsor and, to the knowledge of the Common
Sellers, each Investment Company for which the Company serves as a subadviser,
has filed, all material registrations, reports, statements, notices and other
material filings required under Applicable Law to be filed with the SEC and any
other Governmental Authority (other than a Taxing Authority) by the Company, to
the extent applicable, including all material amendments or supplements to any
of the above (the "Filings") for the past five years. The Filings complied in
all material respects, where applicable, with the requirements of the Exchange
Act, the Advisers Act, the Investment Company Act and all other Applicable Laws
and did not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein, or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. The Company has made or will make available to the Buyers complete
and correct copies of (i) all Filings made within the past five (5) years
(including, but not limited to all filings on Form ADV), (ii) all audit or
inspection reports received by the Company from the SEC or any other
Governmental Authority (other than a Taxing Authority) and all written responses
thereto made by the Company during the past five (5) years, (iii) copies of all
inspection reports provided to the Company by the SEC or any other Governmental
Authority (other than a Taxing Authority) during the past five years, and (iv)
all correspondence relating to any investigation provided to the Company by the
SEC or any other Governmental Authority (other than a Taxing Authority) during
the past two years. Except as set forth in Section 3.6(a) of the Company
Disclosure Memorandum, as of the date of this Agreement, there is no material
unresolved

                                       16
<PAGE>   22

violation, criticism, or exception by any Governmental Authority (other than a
Taxing Authority) with respect to any report or statement relating to any
examinations or inspections of the Company or any Investment Company where the
Company serves as investment adviser, or as a sponsor or underwriter. The
Company has not received, since December 31, 1999, any notification or
communication from any Governmental Authority (other than a Taxing Authority)
(i) asserting that the Company is not in compliance with any of the Applicable
Laws which such Governmental Authority enforces or (ii) threatening to revoke,
limit or suspend any Permit or Consent.

         (b) Advisers Act.

                  (i) Except for the Company, no Affiliate of the Company has
         been during the past five years an "investment adviser" required to be
         registered, licensed or qualified as an investment adviser under the
         Advisers Act or other Applicable Law or subject to any material
         liability or disability by reason of any failure to be so registered,
         licensed or qualified, except for any such failure to be so registered,
         licensed or qualified that are not, individually or in the aggregate,
         reasonably expected to have a Company Material Adverse Effect.

                  (ii) The Company is, and at all times required by the Advisers
         Act during the past five years has been, duly registered as an
         investment adviser under the Advisers Act. The Company is, and at all
         times required by Applicable Law (other than the Advisers Act) during
         the past five years has been, duly registered, licensed or qualified as
         an investment adviser in each state or any other domestic or foreign
         jurisdiction where the conduct of its Business required such
         registration, licensing or qualification, except for any such failure
         to be so registered, licensed or qualified that, individually or in the
         aggregate, is not reasonably expected to have a Company Material
         Adverse Effect. Each such United States federal and state registration,
         license or qualification, as of the date hereof, is listed in Section
         3.6(b) of the Company Disclosure Memorandum and is in full force and
         effect.

                  (iii) Neither the Company nor any "affiliated person" (as
         defined in the Investment Company Act) thereof, is ineligible pursuant
         to Section 9(a) or (b) of the Investment Company Act to serve as an
         investment advisor (or in any other capacity contemplated by the
         Investment Company Act) to an Investment Company registered under the
         Investment Company Act; and, to the knowledge of the Common Sellers,
         neither the Company nor any "associated person" (as defined in the
         Advisers Act) thereof, is ineligible pursuant to Section 203 of the
         Advisers Act to serve as an investment adviser or as an associated
         person to a registered investment adviser.

                                       17
<PAGE>   23

                  (iv) The Company's advertising and solicitation of business
         has complied and will comply in all material respects with all
         Applicable Laws, including Section 206 of the Advisers Act, SEC Rules
         204-2(a)(16) and 206(4)-1 under the Advisers Act, and the Association
         for Investment Management and Research ("AIMR") Performance
         Presentations Standards.

         (c) Investment Company Act.

                  (i) Section 3.6(c) of the Company Disclosure Memorandum sets
         forth a true, complete and correct list, as of the date hereof, of each
         Registered Fund. Other than with respect to the Registered Funds listed
         in Section 3.6(c) of the Company Disclosure Memorandum, the Company
         does not serve as an adviser or subadviser with respect to any
         Investment Company whether or not required to be registered under the
         Investment Company Act. Each Registered Fund for which the Company
         serves as an adviser, and to the knowledge of the Common Sellers, each
         Registered Fund for which the Company acts as a subadviser, that is an
         entity is duly organized, validly existing and in good standing under
         the laws of the jurisdiction of its organization and has the requisite
         power and authority to own its properties and to carry on its Business
         as it is now conducted, and is qualified to do business in each
         jurisdiction where it is required to do so under Applicable Law, except
         where the failure to have such power, authority or qualification is not
         reasonably expected to have a Company Material Adverse Effect. Each
         Registered Fund for which the Company serves as an adviser, and to the
         knowledge of the Common Sellers, each Registered Fund for which the
         Company acts as a subadviser, that is an entity is, and at all times as
         required under Applicable Law has been, duly registered with the SEC as
         an investment company under the Investment Company Act.

                  (ii) With respect to each Registered Fund for which the
         Company serves as an adviser, and to the knowledge of the Common
         Sellers, each Registered Fund for which the Company acts as a
         subadviser, the outstanding shares or other equity interests of each
         Registered Fund listed in Section 3.6(c) of the Company Disclosure
         Memorandum have been duly and validly issued and are fully paid and
         nonassessable and the shares of each Registered Fund are qualified for
         public offering and sale in each jurisdiction where offers or sales
         have been made or are being made to the extent required under
         Applicable Law.

                                       18
<PAGE>   24

                  (iii) Each Registered Fund for which the Company serves as an
         adviser, and to the knowledge of the Common Sellers, each Registered
         Fund for which the Company acts as a subadviser, of the Company
         Disclosure Memorandum has at all times been operated and is currently
         operating in compliance in all material respects with Applicable Law,
         except for such instances of non-compliance which, individually or in
         the aggregate, are not reasonably expected to have a Company Material
         Adverse Effect. Each current prospectus or offering document (including
         any related statement of additional information), as amended or
         supplemented, relating to each Registered Fund for which the Company
         serves as an adviser, and to the knowledge of the Common Sellers, each
         Registered Fund for which the Company acts as a subadviser, of the
         Company Disclosure Memorandum, is in substantial compliance with the
         requirements of the Securities Act and the Investment Company Act, and
         other Applicable Laws. None of such prospectuses or offering documents,
         amendments or supplements, as of their respective dates, includes or
         included an untrue statement of a material fact or omits or omitted to
         state a material fact necessary in order to make the statements made
         therein, in the light of the circumstances under which they were made,
         not misleading.

                  (iv) Each Registered Fund for which the Company serves as an
         adviser, and to the knowledge of the Common Sellers, each Registered
         Fund for which the Company acts as a subadviser, is duly registered
         with the SEC as an Investment Company under the Investment Company Act
         and each is governed by an Investment Company Board consisting of at
         least 50% of directors who are not "interested persons" (as defined in
         the Investment Company Act) of the Investment Company or the Company.
         Each such Registered Investment Company operates in all material
         respects in conformity with the requirements and restrictions of
         Sections 10 and 16 of the Investment Company Act, to the extent
         applicable.

                  (v) The Company has made available to the Buyer Parent copies
         of the audited financial statements (including the notes thereto) of
         each Registered Fund for which the Company serves as an adviser as of
         and for each of the three most recent fiscal years, the related audited
         statements of operations and changes in net assets for the two most
         recent fiscal years (or such shorter period as any Registered Fund has
         been in operation), and the related schedules of portfolio investments
         for the two most recent fiscal years. The Company has also made
         available to the Buyer Parent copies of the unaudited statement of
         assets and liabilities of each such Registered Fund as of the most
         recent semi-annual period, and the related unaudited statements of
         operations and changes in net assets for such semi-annual period and
         the related schedules of portfolio investments for the two most recent
         fiscal years.

                                       19
<PAGE>   25

         With respect to each Registered Fund for which the Company serves as an
         adviser, the audited and unaudited financial statements of each such
         Registered Fund referred to above have been prepared in accordance with
         GAAP and present fairly, in all material respects, the financial
         condition (including asset valuations) as of such dates and the results
         of operations for such periods of such Registered Fund subject, in the
         case of the unaudited financial statements, to normal, recurring
         year-end adjustments and the lack of footnotes and other presentation
         items.

                  (vi) To the knowledge of the Common Sellers, each such
         Registered Fund has been operated or managed in compliance in all
         material respects with its respective objectives, policies and
         restrictions, including those set forth in the prospectus and statement
         of additional information or other offering materials for each such
         Registered Fund.

                  (vii) There are no legal or governmental actions or
         proceedings pending or, to the knowledge of the Common Sellers,
         threatened against any of the Registered Funds for which the Company
         serves as adviser; nor, to the knowledge of the Common Sellers, are
         there any legal or governmental investigations pending or threatened
         against any of such Registered Funds; nor is there any Order (or, to
         the knowledge of the Common Sellers, any investigation) of any
         Governmental Authority (other than a Taxing Authority) outstanding
         against any of such Registered Funds. With respect to each Registered
         Fund for which the Company serves as an adviser, and to the knowledge
         of the Common Sellers, each Registered Fund for which the Company acts
         as a subadviser, neither the SEC, the NASD, nor any other Governmental
         Authority, has identified any material issue by means of any deficiency
         letter or other similar written inquiry relating to any such Registered
         Fund or its operations that has not been resolved.

                  (viii) All material Contracts, including all advisory and
         sub-advisory agreements, all Services Agreements and all Distribution
         Agreements to which any Registered Fund for which the Company serves as
         adviser is a party or by which such Registered Fund or its property is
         bound (other than Contracts for an individual purchase or sale of
         portfolio securities) have been previously disclosed to Buyers. Each
         such Contract for a Registered Fund for which the Company serves as an
         adviser, and to the knowledge of the Common Sellers, for a Registered
         Fund for which the Company acts as a subadviser, that is subject to
         Section 15 of the Investment Company Act (i) has been duly approved,
         executed, delivered and renewed in compliance in all material respects
         with Section 15 of the Investment Company Act and, if applicable, SEC
         Rule 12b-1 under the Investment Company Act, and (ii) is

                                       20
<PAGE>   26

         currently in full force and effect and has been performed by the
         relevant entity in accordance with the Investment Company Act. To the
         knowledge of the Common Sellers, neither such Registered Fund nor one
         of the other parties to such Contracts is in material default under,
         and, to the knowledge of Common Sellers, no event has occurred which,
         with the passage of time or giving of notice or both, would result in
         such Registered Fund or any of the other parties to such Contracts
         being in material default under, any of the terms of such Contracts.
         Any Service Agreements between the Company and any Registered Fund for
         which the Company serves as an adviser, and to the knowledge of the
         Common Sellers, for a Registered Fund for which the Company acts as a
         subadviser, are valid and enforceable, and the amounts paid to the
         Company under such Service Agreements have been properly determined in
         accordance with the terms thereof.

                  (ix) Each Registered Fund for which the Company serves as
         adviser has in full force and effect such insurance as is required by
         the Investment Company Act and has directors' and officers' and errors
         and omissions insurance policies issued in amounts reasonably believed
         to be adequate and appropriate by its Investment Company Board of
         Directors. No such Registered Fund is in default under any such
         insurance policy. All premiums that are due and payable under such
         policies have been paid.

                  (x) Neither the Company nor any of its respective officers,
         directors or employees has any express or implied understanding or
         arrangement that would impose an unfair burden on any Registered Fund
         for which the Company serves as adviser or that would in any way
         violate Section 15(f) of the 1940 Act as a result of this transaction.

         (d) Other Registrations. Each Common Seller or other employee of the
Company who is required to be registered as a registered representative,
investment adviser representative or a sales person with the SEC or an
equivalent person with the securities commission of any other Governmental
Authority is duly registered as such and such registration is in full force and
effect, except where the failure to be so registered or to have such
registration in full force and effect could not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.

         Section 3.7 Properties. Section 3.7 of the Company Disclosure
Memorandum sets forth a complete and correct list, as of the date hereof, of (i)
all Leases of real property and the location of the applicable property, and
(ii) all Leases of personal property providing for annual rentals of more than
$50,000 or aggregate rentals of more than $100,000. The Company has heretofore
provided or made

                                       21
<PAGE>   27

available to Buyer a true, correct and complete copy of each Lease, together
with all amendments, modifications, alterations, and other changes thereto. The
Company does not own any real property. The Company has valid title to all
personal property owned by it, and valid leasehold interests in all real and
personal property leased by it, in each case free and clear of all Encumbrances
other than Permitted Encumbrances. Except as set forth in Section 3.7 of the
Company Disclosure Memorandum, (i) each Lease is in full force and effect in all
material respects, and (ii) there does not exist under any Lease any material
event of default, or any event or condition that, after notice or lapse of time
or both, would constitute a material event of default, on the part of the
Company or, to the knowledge of the Common Sellers, on the part of any other
party to any material Contract.

         Section 3.8 Financial Statements. The Company has previously
delivered or made available to Buyer Parent, copies of its audited financial
statements for the period commencing on March 1, 1998 and ending December 31,
1998 and for the twelve month periods ending December 31, 1999 and December 31,
2000, including balance sheets as of December 31, 1998, 1999 and 2000, and
statements of income and retained earnings and statements of cash flows for the
above described periods, and its unaudited balance sheet as of the end of the
latest calendar month for which such balance sheet is available and statement of
income for the period from January 1, 2001 through and including the latest
calendar month for which such statement of income is available (collectively,
such statements being referred to as the "Financial Statements"). The balance
sheets referred to in this Section 3.8 present fairly, in all material respects,
the financial position of the Company as of the dates thereof, and the other
Financial Statements referred to in this Section 3.8 present fairly, in all
material respects, the results of the Company's operations and cash flows for
the periods therein set forth subject to, in the case of the unaudited Financial
Statements, recurring audit adjustments normal in nature and amount. The
Financial Statements comply in all material respects with applicable accounting
requirements with respect thereto; and each of such statements (including the
related notes, where applicable) has been prepared in accordance with GAAP
consistently applied during the periods involved (except, in the case of such
unaudited Financial Statements, for the absence of footnotes and recurring year
end audit adjustments normal in nature and amount).

         (a) Except as set forth in Section 3.8(b) of the Company Disclosure
Memorandum, the Company is not subject to any obligation or liability of any
nature, whether absolute, accrued, contingent or otherwise and whether due or to
become due, and, to the knowledge of the Common Sellers, there is no existing
condition, situation or set of circumstances which are reasonably expected to
result in such an obligation or liability, other than (i) obligations and
liabilities contemplated by or in connection with this Agreement or the
transactions contemplated hereby, (ii) as and

                                       22
<PAGE>   28

to the extent disclosed or fully reserved against in the audited consolidated
balance sheet as at December 31, 2000 included in Financial Statements, (iii)
obligations and liabilities incurred since December 31, 2000 in the ordinary
course of business consistent with past practices and not prohibited by this
Agreement, or (iv) obligations and liabilities that could not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.

         Section 3.9 Absence of Changes. Since December 31, 2000, except (i) as
set forth in Section 3.9 of the Company Disclosure Memorandum, (ii) as
specifically reflected or reserved against in the Financial Statements, or (iii)
as contemplated by or in connection with this Agreement or the transactions
contemplated hereby, the business of the Company has been conducted in the
ordinary course consistent with past practices and the Company has not:

         (a) undergone any change in its business, financial condition, results
of operations or properties (other than changes resulting solely from general
economic or political conditions, including but not limited to changes in the
net asset value of any Registered Fund for which the Company serves as adviser
resulting from fluctuations in market price) that, individually or in the
aggregate, has had or could reasonably be expected to have a Company Material
Adverse Effect;

         (b) In the case of the Company or any Registered Fund for which the
Company serves as adviser, declared, set aside, made or paid any dividend or
other distribution in respect of its capital stock or repurchased, redeemed or
otherwise acquired any shares of its capital stock, except, (i) any dividends
declared, set aside or paid on the Preferred Stock in accordance with the terms
set forth in the Organizational Documents of the Company and (ii) in the case of
any Registered Fund for which the Company serves as adviser, in the ordinary
course of business consistent with past practices and Applicable Law;

         (c) issued, sold, granted or awarded any shares of its capital stock of
any class or any Rights of any kind to purchase any such shares or any
securities convertible into or exchangeable for any such shares;

         (d) incurred, assumed, guaranteed (including by way of any agreement to
"keep well" or of any similar arrangement) or prepaid any Indebtedness or
amended the terms relating to any Indebtedness, or issued or sold any debt
securities, except for any such incurrence, assumption, guarantee or prepayment
of such Indebtedness or amendments of the terms of such Indebtedness in the
ordinary course of business consistent with past practices in an aggregate
amount not exceeding $50,000;

                                       23
<PAGE>   29

         (e) sold, transferred, assigned, conveyed, mortgaged, pledged or
otherwise subjected to any Encumbrances any of its properties or assets,
tangible or intangible, except for Permitted Encumbrances or in the ordinary
course of business consistent with past practices;

         (f) entered into (i) any agreement or commitment involving more than
$50,000 that, pursuant to its terms, is not cancelable without penalty or charge
on thirty (30) days' notice or less or (ii) any other agreement, commitment or
other transaction, other than (A) any agreement, commitment or other transaction
involving an expenditure of not more than $50,000 or (B) Investment Management
Agreements, entered into in the ordinary course of business consistent with past
practices;

         (g) paid (or committed to pay) any bonus or other incentive
compensation to any director, partner, officer, other employee or sales
representative or granted (or committed to grant) to any director, partner,
officer, employee or sales representative any other increase in compensation,
except for (i) bonuses or incentive compensation payable pursuant to a plan set
forth in Section 3.15 of the Company Disclosure Memorandum, base salary or wage
increases, in each case in the ordinary course of business consistent with past
practices or pursuant to the terms of any written agreement or commitment
existing at December 31, 2000, and (ii) severance or termination payments not to
exceed, in the aggregate, $50,000;

         (h) entered into, adopted or amended (or committed to enter into, adopt
or amend) in any material respect any employment, retention, change in control,
collective bargaining, deferred compensation, severance, retirement, bonus,
profit-sharing, stock option or other equity, pension or welfare plan or
agreement maintained for the benefit of any director, partner, officer, other
employee or sales representative;

         (i) suffered any strike or other labor dispute that has had or could
reasonably be expected to have a Company Material Adverse Effect;

         (j) suffered any loss of employees or investment advisory clients that
has had or is reasonably expected to have a Company Material Adverse Effect;

         (k) amended its articles of incorporation or bylaws or any other
Organizational Documents;

         (l) granted any rights or licenses under any of its trademarks or trade
names or other Intellectual Property or entered into any licensing or similar

                                       24
<PAGE>   30

agreements or arrangements, in each case other than in the ordinary course of
business consistent with past practices;

         (m) made any material changes in its general policies or practices
relating to selling practices, discounts or other material terms of sale or
accounting therefor, including any changes in loads, 12b-1 or advisory or other
fees with respect to any Registered Fund for which the Company serves as
adviser;

         (n) in the case of any Registered Fund for which the Company serves as
adviser, had any action taken by the Investment Company Board of such Registered
Fund other than actions in the ordinary course of business consistent with past
practices, actions customarily taken by similarly situated Investment Company
Board of Investment Companies or actions contemplated by or in connection with
this Agreement;

         (o) changed in any material respect its accounting practices, policies
or principles, other than any such changes as may be required under GAAP;

         (p) amended or agreed to amend its general fee schedule;

         (q) suffered any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting its properties or assets which, individually
or in the aggregate, is reasonably expected to have a Company Material Adverse
Effect; or

         (r) taken any action or omitted to take any action that would result in
the occurrence of any of the foregoing.

         Section 3.10 Contracts.

         (a) Section 3.10(a) of the Company Disclosure Memorandum sets forth a
correct and complete list, as of the date hereof, of all Contracts the annual
revenue or cost to the Company of which exceeds $50,000. The Company has
delivered to Buyer for inspection complete and correct copies of all such
Contracts, including fee schedules, where applicable.

         (b) Except as set forth in Section 3.10(b) of the Company Disclosure
Memorandum, and excluding any failure to obtain Consents with respect to the
Contracts with those Clients listed in Section 3.10(c) of the Company Disclosure
Memorandum (i) each Contract is in full force and effect in all material
respects, and (ii) there does not exist under any Contract any event of default,
or any event or condition that, after notice or lapse of time or both, would
constitute an event of default, on the part of the Company or, to the knowledge
of the Common Sellers, on

                                       25
<PAGE>   31

the part of any other party to any Contract, where any such default could
reasonably be expected to have a Company Material Adverse Effect. Except as
disclosed in Section 3.10(b) of the Company Disclosure Memorandum, the Company
is not subject to any contract, agreement, license or commitment materially
restricting or limiting the type or scope of business or operations that it may
conduct now or immediately after the Closing Date.

         (c) Except as set forth in Section 3.10(c) of the Company Disclosure
Memorandum, as of the date hereof the Company has not received written notice
from any Client of, and, to the knowledge of the Common Sellers, no such Client
has stated orally, its intention to terminate its Investment Management
Agreement with the Company.

         (d) As of the date hereof, the Company has not received written notice
from any selling agent that is a party to any Distribution Agreement of, and, to
the knowledge of the Common Sellers, no such selling agent has stated orally,
its intention to terminate its Distribution Agreement (other than terminations
initiated by any the Company due to a breach by such selling agent).

         (e) Each Contract for investment advisory services has been duly
authorized, executed and delivered by the Company and, to the knowledge of the
Common Sellers, each other party thereto and, to the extent applicable, has been
adopted in compliance with Section 15 of the Investment Company Act and Section
205 of the Advisers Act and complies with Applicable Law and is a valid and
binding agreement of each such party, enforceable in accordance with its terms
(subject to bankruptcy, insolvency, moratorium, fraudulent transfer and similar
laws affecting creditors, rights generally and to general equity principles) and
(ii) the Company and, to the knowledge of the Common Sellers, the other party
thereto is in compliance in all material respects with the terms of each such
Contract, and no event has occurred or condition exists that constitutes or with
notice or the passage of time could constitute a material default by the Company
thereunder.

         (f) Section 3.10(f) of the Company Disclosure Memorandum includes a
listing of all wrap account agreements, the sellers of such wrap accounts, and
the selling or sponsoring broker-dealer organizations and a schedule of fees for
each sponsoring broker-dealer organization. To the knowledge of the Common
Sellers, all wrap accounts are offered and sold in compliance with all
Applicable Laws, including the requirements for delivery of the Company's Form
ADV, Part II and the requirements of Rule 3a-4 under the Investment Company Act,
and are exempt from registration or qualification under Applicable Laws,
including federal, state, local and foreign securities laws.

                                       26
<PAGE>   32

         Section 3.11 No Other Brokers.

         (a) Other than Putnam Lovell Securities Inc., the fees and expenses of
which will be paid by the Company, no broker, finder or similar intermediary has
acted for or on behalf of or is entitled to any broker's, finder's or similar
fee or other commission from the Company or the Common Seller in connection with
this Agreement or the transactions contemplated hereby. The Preferred Seller has
no obligation to pay any investment banking or similar fees or legal fees to
either Putnam Lovell Securities Inc. or Skadden, Arps, Slate, Meagher & Flom
LLP, counsel to the Company, in connection with this Agreement or the
transactions contemplated hereby.

         (b) The Preferred Seller has not retained or otherwise used any broker,
finder or similar intermediary to act on its behalf nor is any Person entitled
to any broker's, finder's or similar fee or other commission from the Preferred
Seller in connection with this Agreement or the transactions contemplated
hereby.

         Section 3.12 Legal Proceedings. There are no legal, administrative,
arbitral or other proceedings, claims, actions or governmental or regulatory
investigations of any nature that are pending or, to the knowledge of the Common
Sellers, have been threatened in writing, against the Company or any of its
properties or assets which (a) individually or in the aggregate, are reasonably
expected to have a Company Material Adverse Effect or (b) challenge the validity
of the transactions contemplated by this Agreement, and there is no injunction,
order, judgment, decree, or regulatory restriction imposed upon the Company or
any of its properties or assets which, individually or in the aggregate, is
reasonably expected to have a Company Material Adverse Effect.

         Section 3.13 Compliance with Applicable Law.

         (a) The Company holds, and has at all times during the past five (5)
years held, all material Permits necessary for the lawful ownership and use of
its properties and assets and the conduct of its Business under and pursuant to,
and has complied in all material respects with, and is not in violation in any
material respect of, any Applicable Law relating to the Company or any of its
assets, properties or operations (including, without limitation, the Securities
Act, Advisers Act, the Investment Company Act and the Exchange Act and similar
state and foreign laws). To the knowledge of the Common Sellers, the Company is
not in violation or any Applicable Law relating to it, except any such
violations which, individually or in the aggregate, would not have a Company
Material Adverse Effect. All Permits are in full force and effect and are not
subject to any suspension, modification or revocation or proceedings related
thereto.

                                       27
<PAGE>   33

         (b) Except for normal examinations or inspections conducted by any
Governmental Authority in the regular course of the Business of the Company and
any Registered Fund for which the Company serves as adviser and, to the
knowledge of the Common Sellers, any Registered Fund for which the Company
serves as subadviser, and which examinations are described in Section 3.13(b) of
the Company Disclosure Memorandum, since December 31, 1999, (i) no Governmental
Authority has initiated any administrative proceeding or, to the knowledge of
the Common Sellers, investigation into the Business or operations of the Company
or such Registered Fund and (ii) the Company has not received any written notice
of any unresolved violation or exception by any Governmental Authority with
respect to any report or statement by any Governmental Authority relating to any
examination or inspection of the Company. Copies of all reports or letters with
respect to any such examinations or investigations have been provided to Buyer
Parent.

         Section 3.14 Insurance. The Company maintains with reputable insurers,
insurance and indemnity bonds providing reasonably adequate coverage for the
Company against risks normally insured or bonded against by companies in similar
lines of business. All such insurance policies and bonds are listed in Section
3.14 of the Company Disclosure Memorandum. Each such insurance policy or bond is
in full force and effect, and the Company has not received written notice or any
other indication from any insurer or agent of any intent to cancel any such
insurance policy or bond. All premiums due on the insurance have been paid, and
the Company will maintain such insurance policies from the date of this
Agreement through the Closing Date. Renewals and replacements of insurance
coverage over the past year by the Company has been at rates that are not
materially higher than during the preceding year.

         Section 3.15 Employee Benefit Plans; ERISA.

         (a) Section 3.15(a) of the Company Disclosure Memorandum sets forth a
true and complete list of each material bonus, deferred compensation, incentive
compensation, stock purchase, option, employment, consulting, severance or
termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension or retirement plan,
program, agreement or arrangement, and each other fringe benefit plan, including
each "employee benefit plan" (within the meaning of Section 3(3) of ERISA),
whether formal or informal, written or oral and whether legally binding or not,
that is maintained or contributed to or was maintained or contributed to at any
time by the Company or any ERISA Affiliate for the benefit of any employee,
former employee, spouse, dependent, director, independent contractor or
consultant of the Company as to which the Company or any ERISA Affiliate has any
liability (each, a "Plan").

                                       28
<PAGE>   34

         (b) With respect to each Plan, the Company has made available to Buyer
true and complete copies of each of the following documents:

                  (i) a copy of the Plan (including all amendments thereto);

                  (ii) a copy of any annual return required under ERISA or other
         applicable law with respect to each such Plan for the three most
         recently completed plan years;

                  (iii) a copy of any actuarial report required under ERISA or
         other applicable law with respect to each such Plan for the three most
         recently completed plan years;

                  (iv) a copy of the most recent summary plan description and
         any summaries of material modifications thereto;

                  (v) if the Plan is funded through a trust or any third party
         funding vehicle, a copy of the trust or other funding agreement
         (including all amendments thereto) and the most recent financial
         statement related thereto;

                  (vi) all contracts relating to any Plan with respect to which
         the Company has any material liability; and

                  (vii) except as set forth in Section 3.15(b) of the Company
         Disclosure Memorandum, the most recent determination letter received
         from the IRS with respect to each Plan that is intended to be qualified
         under Section 401 of the Code.

         (c) (i) No Plan is or has ever been a "multiemployer plan," as such
term is defined in Section 3(37) of ERISA and no Plan is subject to Title IV of
ERISA; (ii) each Plan has been operated in all material respects in accordance
with the requirements of all Applicable Law; (iii) each Plan that is intended to
be qualified under Code Section 401(a) has received an individual favorable IRS
determination letter; (iv) to the knowledge of the Common Sellers, each of the
Plans intended to be "qualified" within the meaning of Section 401(a) of the
Code is so qualified and no Plan has an accumulated or waived funding deficiency
within the meaning of Section 412 of the Code; and (v) neither of the Company
nor any ERISA Affiliate has incurred, directly or indirectly, any liability
(including any material contingent liability) pursuant to Title IV of ERISA that
has not been satisfied in full, and neither the Company nor any ERISA Affiliate
made, or was required to make, contributions to any plan subject to Title IV of
ERISA (a "Title IV Plan") during the six year

                                       29
<PAGE>   35

period ending on the last day of the most recent Title IV Plan year ended prior
to the Closing Date.

         (d) No Plan provides welfare benefits (as defined in Section 3(1) of
ERISA) for periods extending beyond termination of service other than (i)
coverage required to be provided under Applicable Law or (ii) as described in
the Plan.

         (e) There are no pending or anticipated claims (other than routine
claims for benefits) involving any Plan.

         (f) The consummation of the transactions contemplated by this Agreement
will not (i) entitle any current or former employee or director of the Company
to severance pay, unemployment compensation or any other similar payment, except
as expressly provided in this Agreement or (ii) accelerate the time of payment
or vesting or increase the amount of compensation or benefits due any such
person.

         (g) Since the date of the most recent valuation, there has been no
material change in the financial position of any Plan and no material increase
in benefits under any Plan as a result of plan amendments. To the knowledge of
the Common Sellers, no "party in interest" (as defined in Section 3(14) of
ERISA) or "disqualified person" (as defined in Section 4975(e)(2) of the Code)
with respect to any Plan has engaged in any nonexempt "prohibited transaction"
(described in Section 4975(c) of the Code or Section 406 of ERISA). The Common
Sellers have, or have reserved, the right to amend or terminate any Plan subject
to ERISA at any time prior to the Closing Date. No material tax under Code
Sections 4980B or 5000 has been incurred with respect to any Plan and, to the
knowledge of the Common Sellers, no circumstances exist which could give rise to
such taxes.

         (h) The Company has made appropriate entries in its financial records
and statements for all Plan obligations that have accrued but that are not yet
due. The value of all accrued deferred compensation entitlements (including
entitlements under any executive compensation, supplemental retirement, or
employment agreement) of employees and former employees of the Company and their
respective beneficiaries have been fully reflected on the Company's financial
statements. The Company has made all required contributions and payments under
each Plan.

         Section 3.16 Technology and Intellectual Property.

         (a) Section 3.16(a) of the Company Disclosure Memorandum contains a
true and complete list and description of each of the electronic data
processing, communications, information, telecommunications and computer systems
which are

                                       30
<PAGE>   36

material to the Business of the Company (collectively, the "Technology
Systems"), including a description of any Software (other than readily available
off-the-shelf software) and any material computer hardware systems owned, leased
or used by any of them that is used in the operation of the Technology Systems
and list of any material Contracts pursuant to which it is granted rights which
are used in the operation of the Technology Systems, including soft dollar
arrangements, Software licenses and similar agreements, as set forth in Section
3.10(a) of the Company Disclosure Memorandum.

         (b) Each of the Technology Systems is adequate for the conduct of the
Business of the Company as currently operated. There has not been any material
malfunction with respect to any of the Technology Systems currently in use.

         (c) Section 3.16(c) of the Company Disclosure Memorandum contains a
true and complete list and description of all material Intellectual Property,
including all patents and all registered trademarks, registered service marks
and registered copyrights and applications therefor, owned by, or used in the
Business or operations of, the Company (the "Company Intellectual Property"),
and all material licenses, service marks or agreements pursuant to which the
Company has granted or has been granted rights with respect to Intellectual
Property not owned and used exclusively by it.

         (d) The Company has the right to use the Software and Company
Intellectual Property in accordance with the terms of the relevant Contracts
governing such use, free and clear of any claims by any Person (other than
Permitted Encumbrances and the claims of any licensor under licensing or similar
agreements), and the consummation of the transactions contemplated by this
Agreement will not alter or impair the right of Buyer to use the Software or the
Company Intellectual Property in connection with the Business of the Company as
currently conducted by the Company to the same extent and on the same terms as
the Company was entitled to use such Software and such Company Intellectual
Property as of the date hereof, free and clear of any claims by any Person
(other than Permitted Encumbrances and the claims of any licensor under
licensing or similar agreements). No claim has been asserted, or to the
knowledge of the Common Sellers threatened, by any Person to the effect that the
use by the Company of any Company Intellectual Property violates or infringes
upon the asserted rights of others, or that challenges or questions the validity
or effectiveness of any license or similar agreement with respect to any Company
Intellectual Property that is leased or licensed by the Company or the ownership
by the Company of any Company Intellectual Property that the Company purports to
own. As of the date hereof, none of the Software or the Company Intellectual
Property is subject to any outstanding

                                       31
<PAGE>   37

order, judgment, decree, stipulation or agreement restricting the use thereof by
the Company.

         Section 3.17 Taxes.

         (a) The Company has duly and timely filed all material Tax Returns
required to be filed on or before the Closing Date and all such Tax Returns were
correct and complete as filed. All Taxes that are or may become payable by the
Company as of the Closing Date or chargeable as a lien upon its assets (whether
or not shown on any Tax Return) with respect to any Tax period or portion
thereof ending on or before the Closing Date have been either duly and timely
paid or adequate provision has been made therefor on the Estimated Closing
Balance Sheet. The aggregate of the reserves for Taxes contained on the
Estimated Closing Balance Sheet will be adequate for all such Taxes payable or
asserted to be payable by the Company for all relevant taxable periods or
portions thereof through the Closing Date. The Company has made available to the
Buyers complete and correct copies of all material Tax Returns filed by the
Company.

         (b) Except as set forth on Schedule 3.17(b) of the Company Disclosure
Memorandum, the Company has duly and timely withheld all employment and
withholding Taxes required to be withheld, and such withheld taxes have been
duly and timely paid to the proper Governmental Authorities or, if not yet due,
properly set aside in accounts for such purpose. The Company is in compliance
with all applicable information reporting and Tax withholding requirements under
federal, state, and local Tax laws.

         (c) To the knowledge of the Company, no claim for taxes has been
asserted, raised, or threatened in writing by a Governmental Authority against
the Company in a jurisdiction in which the Company does not file Tax Returns.

         (d) Except as set forth on Section 3.17(d) of the Company Disclosure
Memorandum, no Tax Return filed by the Company is currently under audit by any
Governmental Authority. To the knowledge of the Company, no Taxes of the Company
that may become payable following the Closing Date for periods ending on or
prior to the Closing Date have been asserted in writing by any Governmental
Authority to be due, and no report or assessment for any Taxes of the Company
that may be payable following the Closing Date for periods ending on or prior to
the Closing Date has been issued by any Governmental Authority in the course of
any audit. To the knowledge of the Company, except as set forth on Section
3.17(d) of the Company Disclosure Memorandum, no Governmental Authority has
asserted, raised or threatened against the Company any deficiency or claim for
additional Taxes or any adjustment of Taxes. There is no other deficiency, claim
or adjustment with respect to any Taxes of the Company, including Taxes of other
persons for

                                       32
<PAGE>   38

which the Company may be liable under Section 1-1502-6 of the Treasury
Regulations or any similar provision of Applicable Law, that may be payable
following the Closing Date for periods ending on or prior to the Closing Date,
or other pending audit of any Tax Return pertaining to the Company.

         (e) Except as set forth on Section 3.17(e) of the Company Disclosure
Memorandum, the Company has not (x) waived any statute of limitations, (y)
agreed to any extension of the period for assessment or collection of any Taxes,
or (z) executed or filed any power of attorney with respect to any Taxes, which
waiver, agreement or power of attorney is currently in force.

         (f) The Company has not filed a consent under Section 341(f) of the
Code concerning collapsible corporations.

         (g) Except as set forth in Section 3.17(g) of the Company Disclosure
Memorandum, the Company is not a party to, is not bound by and does not have any
obligation under any Tax allocation, sharing, indemnity or similar agreement or
arrangement. Except as set forth in Section 3.17(g) of the Company Disclosure
Memorandum, the Company is not, nor at any time has it been, a member of any
Affiliated Group nor does it have any liability for the Taxes of any person
under Section 1.1502-6 of the United States Treasury Regulations, or any similar
provision of state, local or foreign law, or as a transferee, successor,
indemnitor or guarantor, by contract or otherwise.

         (h) The Buyers will not be required to deduct and withhold any amount
pursuant to Sections 1445(a) or 3406 of the Code, or any other provision of law,
upon the payment of the Merger Consideration pursuant to this Agreement.

         (i) The Company is not obligated to make any payments and is not a
party to any agreement that could reasonably be expected to obligate it to make
any payments that will not be deductible under Section 162(m) of the Code.

         (j) The Company has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

         (k) Except as set forth in Section 3.17(k) of the Company Disclosure
Memorandum, there is no ruling received from, or closing agreement executed
with, any Governmental Authority that will be binding upon the Company after the
Closing Date with respect to Taxes.

                                       33
<PAGE>   39

         (l) The Company has not had in any foreign country a permanent
establishment, as defined in any applicable tax treaty or convention between the
United States and such foreign country. The Company is not subject to Tax in any
country other than the United States.

         (m) There has not been an ownership change, as defined in Section 382
of the Code, of the Company, that occurred during or after any period in which
the Company incurred a net operating loss that carries over to any period ending
after the Closing Date.

         (n) In the Merger, the Company will transfer to Buyer assets
representing, at least ninety percent (90%) of the fair market value of the net
assets and at least seventy percent (70%) of the fair market value of the gross
assets held by the Company immediately prior to the Merger. For purposes of this
representation, Company assets used to pay its reorganization expenses and all
redemptions of stock and distributions with respect to stock (except for
regular, normal dividends) made by the Company immediately preceding the
transfer, will be included as assets of the Company immediately prior to the
Merger. Except as set forth in this Agreement and the Company Disclosure
Memorandum, the Company will pay no cash or other property to shareholders in
connection with the Merger. In addition, assets disposed of by the Company in
contemplation of the Merger will be considered assets held by the Company
immediately prior to the Merger.

         (o) Other than cash paid to the Preferred Seller and the Common Sellers
that have dissented from the Merger and perfected their rights of appraisal,
during the preceding two years, neither the Company nor any Company Related
Party has redeemed or acquired any Company Stock.

         (p) Except as set forth in this Agreement and the Company Disclosure
Memorandum, neither the Company nor any Company Related Party has made any
distribution with respect to the outstanding Capital Stock during the preceding
two years other than periodic dividends consistent with the Company's historic
dividend practice.

         (q) The liabilities of the Company assumed by Buyer and the liabilities
to which the transferred assets of the Company are subject were incurred by the
Company in the ordinary course of its business.

         (r) To the knowledge of the Company, the Company and the Sellers will
pay their respective expenses, if any, incurred in connection with the
transaction.

                                       34
<PAGE>   40

         (s) The fair market value of the assets of the Company to be
transferred to the Buyer will equal or exceed the sum of the liabilities assumed
by Buyer or by Buyer Parent, plus the amount of the liabilities, if any, to
which the transferred assets are subject.

         Section 3.18 Assets Under Management. As of the close of business on
January 31, 2001 the aggregate amount of assets under management (i.e., assets
as to which the Company is entitled to receive Asset Management Fees) (i) for
the Registered Funds listed on Section 3.6(c) of the Company Disclosure
Memorandum was approximately $645,801,217, (ii) for the Separate Accounts was
approximately $15,256,192,937, and (iii) for the wrap accounts of the Company's
Managed Accounts Group was approximately $1,554,561,375.

         Section 3.19 Affiliate Transactions. Section 3.19 of the Company
Disclosure Memorandum sets forth a correct and complete list of all agreements,
arrangements or other commitments in effect as of the date hereof (other than
employment agreements listed in Section 3.10(a) of the Company Disclosure
Memorandum) between the Company, on the one hand, and any officer, director or
shareholder of the Company, on the other hand. A true and correct copy of each
such agreement, arrangement or commitment (or if the same is oral, a true,
correct and complete written description thereof) has heretofore been provided
to the Buyers.

         Section 3.20 Labor Matters, etc. The Company is not a party to or bound
by any collective bargaining or other labor agreement. The Company is currently
in compliance with and for the past five (5) years has materially complied with
all applicable provisions of Applicable Laws pertaining to the employment or
termination of employment of its employees, except for any failures to comply
that, individually or in the aggregate, could not reasonably be expected to have
a Company Material Adverse Effect.

         Section 3.21 Derivative Products. All interest rate swaps, caps,
floors, option agreements, futures and forward Contracts and other similar risk
management arrangements, whether entered into for the Company's own account (all
of which are listed on Section 3.21 of the Company Disclosure Memorandum), or
for the account of one or more of the Company's Clients, were entered into (i)
in accordance with prudent business practices to the extent entered into for the
Company's own account, (ii) in accordance with Client guidelines to the extent
entered into for Clients, (iii) in accordance with all Applicable Laws and (iv)
to the knowledge of the Common Sellers, with counterparties that were
financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of the Company, enforceable in accordance with its
terms (subject only to the bankruptcy, insolvency, moratorium, fraudulent
transfer and similar laws affecting creditors' rights generally

                                       35
<PAGE>   41

and to general equity principles), and are in full force and effect. Neither the
Company nor to the Company's knowledge any other party thereto, is in breach of
any of its obligations under any such agreement or arrangement.

         Section 3.22 Books and Records. The books and records of the Company
and its Subsidiaries and each Investment Company, Client and Account have been
fully, properly and accurately maintained in all material respects, in
compliance and there are no material inaccuracies or discrepancies of any kind
contained or reflected therein, and they fairly present in all material respects
the financial position of the Company, and the assets and performance of each
Investment Company, Client and Account. The valuations of the assets and
liabilities of each Investment Company, Client and Account have been supplied by
sources that the Company believes are reasonably reliable and accurate, and, to
the Common Sellers' knowledge, accurately reflect the fair market values of such
assets and liabilities as of the dates thereof.

         Section 3.23 Environmental Matters. Except as set forth in Section 3.23
of the Company Disclosure Memorandum, and except for those matters which could
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect:

         (a) The Company and the Company Facilities are and have been in
compliance with all Environmental Laws;

         (b) No events, facts or conditions will prevent, hinder or limit
continued compliance by the Company and the Company Facilities with applicable
Environmental Laws, and no material expenditures or commitments by the Company
are planned or necessary to maintain continued compliance by the Company and the
Company Facilities with applicable Environmental Laws as of the date of this
Agreement or beyond the Effective Date;

         (c) The Company has obtained all Permits required pursuant to
applicable Environmental Laws to carry on its business as now conducted; all
such permits are in full force and effect and are not subject to any appeals or
to any unsatisfied conditions which are required to be satisfied by the Closing
Date; and no such permits are subject to any pending or threatened modification,
suspension, revocation, rescission or cancellation;

         (d) The Company is not liable under any applicable Environmental Law
with respect to the release, threatened release, or presence of any Hazardous
Substance;

                                       36
<PAGE>   42

         (e) No Hazardous Material which may require response or corrective
action or remediation under any Environmental Law is present at, threatening, or
emanating from any property presently owned or operated by the Company, or was
present at or emanating from any other property when previously owned or
operated by the Company;

         (f) The Company is not subject to any pending or threatened claim, or
is obliged to comply with any judgment, order, ruling, settlement, or agreement
arising under any Environmental Law;

         (g) The Company has not received any notice that it is a potentially
liable party, that it is required to provide information, or that it or any of
the Company Facilities is subject to an investigation in connection with any
applicable Environmental Law; and

         (h) The Company has not entered into any negotiations or agreements
either relating to any response or corrective action or remediation relating to
liabilities or potential liabilities arising under any Environmental Law or
providing any indemnification or renouncing indemnification claims for any
liabilities arising under any Environmental Law.

         Section 3.24 Disclosure. The respective representations and warranties
of the Common Sellers and the Preferred Seller contained herein do not contain
any untrue statements of material fact or omit to state a material fact
necessary to be stated or disclosed in order to make the statements contained in
the representations and warranties, in light of the circumstances under which
they were made, not misleading.

         Section 3.25 Investment. Each Seller hereby represents and warrants
that the Parent Stock it will acquire pursuant to the Merger, and the Parent
Stock it may acquire pursuant to the terms of Article II, are being, or will be,
acquired by such Seller for its own account, not as a nominee or agent, and not
with a view to, or for sale in connection with, any distribution thereof. Each
Seller understands that the Parent Stock issuable pursuant to the Merger hereof,
and the Parent Stock that may be issued pursuant to Article II hereof, have not
been registered under the Securities Act, or any state securities laws, by
reason of specific exemptions from the registration provisions of the Securities
Act and such laws that may depend upon, among other things, the bona fide nature
of the Sellers' investment intent as expressed herein. Each Common Seller that
is a natural person and the Preferred Seller represents and warrants that he,
she or it, as the case may be, is an "accredited investor" within the meaning of
Regulation D promulgated by the SEC under the Securities Act. Each Seller has
had an opportunity to ask questions and receive

                                       37
<PAGE>   43

answers concerning the terms and conditions of the Merger and related
transactions, and to obtain any additional information that Buyer Parent
possesses or can acquire without unreasonable effort, and that such Seller has
received prior to the date hereof a copy of all Buyer Parent Reports that have
been filed with the SEC.

         Each Seller further represents and warrants that it has such knowledge
and experience in financial and business matters as to enable it (a) to utilize
the information made available to it in connection with the transactions
contemplated by this Agreement, (b) to evaluate the merits and risks associated
with the acquisition of Parent Stock pursuant hereto, and (c) to make an
informed decision with respect thereto. Each Seller's business and financial
experience is such that the Buyers could reasonably assume such Seller has the
capacity to protect its interests in connection with the offer, sale and
issuance of the Parent Stock hereunder. Each Seller has reviewed with its tax
advisor the United States federal, state, local and foreign tax consequences of
an investment in Parent Stock and the transactions contemplated by this
Agreement and reviewed with its legal counsel the United States, federal, state
and foreign legal restrictions on transfers and resales of shares of Parent
Stock issued pursuant to the terms of this Agreement. Each Seller is relying
solely on such advisors with respect to such matters and not on any statements
or representations of the Buyers or any of their agents.

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER
                                AND BUYER PARENT

         The Buyers, jointly and severally, represent and warrant to the Company
and the Sellers as follows:

         Section 4.1 Organization and Related Matters. Buyer Parent and Buyer
are corporations duly organized, validly existing and in good standing under the
laws of the England and Wales and the State of Delaware, respectively. Each of
Buyer and Buyer Parent has the power and authority to carry on its business as
it is now being conducted and to own, lease and operate all of its properties
and assets, and is duly qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or location of the
properties and assets owned, leased or operated by it makes such qualification
necessary except where the failure to be so qualified would not have a Buyer
Material Adverse Effect.

                                       38
<PAGE>   44

         Section 4.2 Authority; No Violation.

         (a) Each of Buyer and Buyer Parent has full power and authority to
execute and deliver this Agreement and take all actions necessary or appropriate
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly approved by all requisite action on the part of Buyer
and Buyer Parent, and no other proceedings on the part of Buyer or Buyer Parent
are necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Buyer and Buyer Parent and (assuming the due authorization,
execution and delivery of this Agreement by the Company and the Sellers)
constitute a valid and binding obligation of Buyer and Buyer Parent, enforceable
against Buyer and Buyer Parent in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied in a
court of law or a court of equity and by bankruptcy, insolvency, moratorium and
similar laws affecting creditors' rights and remedies generally.

         (b) Neither the execution and delivery of this Agreement by Buyer or
Buyer Parent, nor the consummation by Buyer or Buyer Parent of the transactions
contemplated hereby to be performed by them, nor compliance by Buyer or Buyer
Parent with any of the terms or provisions herein or therein, will (i) violate
any provision of the Organizational Documents of Buyer or Buyer Parent or (ii)
assuming that the Consents required of the Company in Section 5.3 hereof are
duly obtained, (A) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Buyer or Buyer Parent
or, any of their properties, contracts or assets or (B) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any material Encumbrance upon any assets of Buyer or
Buyer Parent or any Contract, Lease or Indebtedness to which Buyer or Buyer
Parent or any of their Affiliates is a party, or by which Buyer or Buyer Parent,
or any of their properties or assets, may be bound or affected, except, in the
case of this clause (ii), any such violation, conflict, breach, losses, default,
termination, cancellation or Encumbrance which would not individually or in the
aggregate have a Buyer Material Adverse Effect.

         Section 4.3 Consents and Approvals. Except for (a) Consents and notices
as are set forth in Section 5.3, (b) the applicable filings under the HSR Act
and (c) such other Consents the failure of which to be made or obtained are not
reasonably expected to have a Buyer Material Adverse Effect, no Consents with
any Governmental Authority or any third party are necessary in connection with
(i) the execution and delivery by Buyer and Buyer Parent of this Agreement and
(ii) the

                                       39
<PAGE>   45

consummation by Buyer and Buyer Parent of the transactions as contemplated
hereby. The Buyers are not aware of any reason that would cause the Consents of
any Governmental Authority or third party to this Agreement and the transactions
provided for herein to not be received without undue delay or without the
imposition thereon of conditions, restrictions or requirements that,
individually or in the aggregate, could reasonably be expected to have a Company
Material Adverse Effect or a material adverse effect on the Surviving
Corporation.

         Section 4.4 Buyer Financing. Buyer Parent and Buyer have, or prior to
Closing will have, sufficient funds to enable them to pay the consideration
required to be paid by Buyer pursuant to Article II and to perform their
obligations hereunder.

         Section 4.5 No Other Broker. Other than DeGuardiola Advisors, Inc., the
fees and expenses of which will be paid by Buyer and/or Buyer Parent, no broker,
finder or similar intermediary has acted for or on behalf of or is entitled to
any broker's, finder's or similar fee or other commission from Buyer or Buyer
Parent or any of their Affiliates in connection with this Agreement or the
transactions contemplated hereby.

         Section 4.6 Legal Proceedings. There are no legal, administrative,
arbitral or other proceedings, claims, actions or governmental or regulatory
investigations of any nature that are pending or, to Buyer's or Buyer Parent's
knowledge, have been threatened in writing against Buyer or Buyer Parent or any
of their Affiliates or their respective properties which (a) individually or in
the aggregate, are reasonably expected to have a Buyer Material Adverse Effect
or (b) challenge the validity of the transactions contemplated by this
Agreement, and there is no injunction, order, judgment, decree, or regulatory
restriction imposed upon Buyer or Buyer Parent or any of their Affiliates or
their properties or assets which, individually or in the aggregate, is
reasonably expected to have a Buyer Material Adverse Effect.

         Section 4.7 Capitalization. The authorized number of shares of Parent
Stock as of December 31, 2000 was 1,049,999,999 Ordinary Shares. At December 31,
2000, the issued number of shares of Parent Stock was 771,037,502 Ordinary
Shares. All the issued Ordinary Shares have been duly authorized and validly
issued and are fully paid and non-assessable. When Ordinary Shares are issued
pursuant to the terms of this Agreement, they will be (a) duly authorized and
validly and newly issued, (b) non-assessable, (c) freely tradeable on the LSE,
(d) free of any pre-emptive rights and (d) free of any transfer restrictions
imposed by Buyer Parent or under Applicable Law (other than restrictions set
forth in Section 2.11 hereof and, with respect to a Common Seller for so long as
such Common Seller is an employee of Buyer Parent or one of its Affiliates,
restrictions generally applicable to employees of Buyer Parent or its
Affiliates). The only authorized capital stock of Buyer is 1,000

                                       40
<PAGE>   46

shares of common stock, par value $.01 per share, of which 160 shares are issued
and outstanding and owned by Buyer Parent.

         Section 4.8 Buyer Parent Reports. Since January 1, 2000, Buyer Parent
has filed all material registrations, reports, statements, notices and other
material filings required to be filed with the SEC, the LSE, the Investment
Management Regulatory Organisation Limited ("IMRO"), and any other Governmental
Authority by Buyer Parent, to the extent applicable, including all required
amendments or supplements to any of the above (the foregoing, excluding reports
on Form 6-K filed with the SEC that relate to transactions by directors or
officers of Buyer Parent or its affiliates in shares of Buyer Parent, the "Buyer
Parent Reports"). The Buyer Parent Reports complied in all material respects,
where applicable, with the requirements of the Securities Act, the Exchange Act,
the Advisers Acts, the Investment Company Act, the Companies Act and the rules
and regulations of IMRO and any other Governmental Authority. As of their
respective dates, each of the Buyer Parent Reports constituting prospectuses,
listing particulars (to the extent their contents relate to the Buyer Parent and
its Affiliates), statements of additional information, Part II of Form ADVs,
annual reports on Form 20-F and proxy statements did not contain any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

         Section 4.9 Taxes. There are no U.K. stamp or transfer Taxes due in
respect of the issuance of any shares of Parent Stock under this Agreement.

                                    ARTICLE V
                                    COVENANTS

         Section 5.1 Conduct of Business by the Company. During the period from
the date of this Agreement and continuing through the Effective Time, except as
expressly contemplated or permitted by this Agreement or with the prior written
consent of Buyer Parent, the Company shall (a) carry on its business in the
ordinary course consistent with past practices; (b) use all reasonable efforts
to preserve its present business organization, relationships and Clients; (c)
use all reasonable efforts to keep available the present services of its
employees; (d) use all reasonable efforts to bill and collect investment
advisory fees consistent with past practices; and (e) use all reasonable efforts
to preserve its rights, franchises, goodwill and relations with its Clients and
others with whom it conducts Business. Without limiting the generality of the
foregoing, except as expressly permitted by this Agreement, as set forth in
Section 5.1 of the Company Disclosure Memorandum, or consented to in writing by
Buyer Parent, the Company shall not:

                                       41
<PAGE>   47

                  (i) issue any securities or borrow money or acquire any of its
         shares of Capital Stock;

                  (ii) pay (or commit to pay) any bonus to any director,
         partner, officer, other employee or sales representative, except such
         bonuses calculated consistent with the past practices of the Company;

                  (iii) create, renew, amend, terminate or cancel, or take any
         other action that may result in the creation, renewal, amendment,
         termination or cancellation of, any Contract except in the ordinary
         course of business;

                  (iv) take any action impairing its rights in any Contract or
         its assets other than in the ordinary course of business;

                  (v) purchase or lease any assets from, or sell or lease any
         assets to, any of its Affiliates;

                  (vi) adopt, amend, renew or terminate any Plan or any other
         employee program, agreement, arrangement or policy between the Company
         and one or more of its employees, other than in the ordinary course of
         business;

                  (vii) take or fail to take any action which action or omission
         constitutes a breach or default under any material Contract or material
         license to which the Company is a party or by which it or any of its
         properties is bound the effect of which could reasonably be expected to
         cause a Company Material Adverse Effect;

                  (viii) amend its Organizational Documents;

                  (ix) terminate senior employees of the Company without having
         consulted with Buyer Parent;

                  (x) enter into any new line of business unrelated to the
         Business as currently conducted;

                  (xi) acquire or sell in any manner, including by way of
         merger, consolidation or purchase or sale of an equity interest or
         assets, any business or any corporation, partnership, association or
         other business organization or division thereof, or

                  (xii) agree to do any of the foregoing.

                                       42
<PAGE>   48

         Section 5.2 No Solicitation, etc. Prior to the Closing, neither the
Company, any Common Seller nor the Preferred Seller shall (i) solicit or
encourage any inquiries or proposals for, or enter into any discussions with
respect to, the acquisition of any of the Capital Stock of the Company or the
Business or all, or substantially all, of the assets of the Company or (ii)
furnish or cause to be furnished any non-public information concerning the
Business and operations of the Company to any Person (other than Buyer and its
Affiliates and their agents or representatives or the Sellers and their agents
or representatives) other than in the ordinary course of business or pursuant to
Applicable Law. Except as otherwise permitted by this Agreement, prior to the
Closing, the Company shall not issue, sell, transfer or otherwise dispose of,
grant any option to any Person with respect to, create any Encumbrance upon, or
transfer any shares of Capital Stock of the Company and each Common Seller and
the Preferred Seller shall not sell, transfer or otherwise dispose of, grant any
option to any Person with respect to, create any Encumbrance upon, or transfer,
such shares of Capital Stock of the Company.

         Section 5.3 Consents.

         (a) Registered Funds. The Company, as promptly as practicable, shall
(i) use its reasonable best efforts to cause the Investment Company Board of
each Registered Fund to call a special meeting of the shareholders of such
Registered Fund to be held as promptly as reasonably practicable for the purpose
of obtaining the approval of such shareholders of a new Investment Management
Agreement containing terms (other than fee rates) that are not materially less
favorable to the Company than the terms contained in the Investment Management
Agreement with such Registered Fund existing on the date hereof, (ii) use, and
use its reasonable best efforts to cause each Registered Fund to use, its
reasonable best efforts to obtain, or cause to be obtained, the approval of the
Investment Company Boards and the shareholders of such Registered Fund, pursuant
to the provisions of Section 15 of the Investment Company Act applicable
thereto, of such Investment Management Agreement for such Registered Fund with
the Company, (iii) use its reasonable best efforts to cause each Registered Fund
to prepare, file with and cause to be cleared by the SEC and all other
Governmental Authorities having jurisdiction there over, as promptly as
practicable after the date hereof, all proxy solicitation materials required to
be distributed to shareholders of each such Registered Fund with respect to the
actions recommended for shareholder approval by the Investment Company Boards,
(iv) use its reasonable best efforts to cause each Registered Fund to mail such
proxy solicitation materials to such shareholders promptly after clearance by
the SEC and cause to be submitted to a meeting of shareholders of such
Registered Fund as soon as practicable after such mailing the proposals
described in clause (ii) above, and (v) use its reasonable best efforts to cause
the Investment Company Board of each

                                       43
<PAGE>   49

Registered Fund to approve, pursuant to and in conformity with Section 15(a)(4)
of the Investment Company Act and SEC Rule 15a-4 thereunder, of an interim
Investment Management Agreement for such Registered Fund with the Company (A)
providing for the Company to continue as the adviser of such Registered Fund
with the same advisory fees as are in effect under the existing Investment
Management Agreement for such Registered Fund with the Company on the date
hereof, (B) becoming effective at the time of the Closing for any Registered
Fund whose shareholders have not, prior to the Closing, approved a new
Investment Management Agreement with the Company, and (C) satisfying all
requirements of SEC Rule 15a-4(b)(2)(iv)-(vi) (each an "Interim Advisory
Contract").

         (b) Other Client Consents. If Consent to the assignment or deemed
assignment of an Investment Management Agreement with Clients of the Company
(other than Clients that are Registered Funds) as a result of the transactions
contemplated by this Agreement is required by Applicable Law or by such Client's
Investment Management Agreement, as soon as reasonably practicable following the
date hereof, the Company shall send a notice in form and substance acceptable to
Buyer (the "Notice") informing such Clients of the transactions contemplated by
this Agreement, requesting written Consent to the assignment of such Client's
Investment Management Agreement and informing such Client (i) of the intention
to complete the transactions contemplated by this Agreement, which will result
in a deemed assignment of such Investment Management Agreement; (ii) of the
intention of the Surviving Corporation to cause a subsidiary of the Surviving
Corporation which is a registered investment adviser to continue to provide the
advisory services pursuant to the existing Investment Management Agreement with
such Client after the Effective Time; and (iii) that the Consent of such Client
will be deemed to have been granted if such Client continues to accept such
advisory services through April 30, 2001 without termination of such Client's
Investment Management Agreement with the Company or without advising the
Company, either orally or in writing, of its intention to terminate such
Investment Management Agreement. Buyer Parent and Buyer each agrees that Consent
for any Investment Management Agreement with a Client (other than Clients that
are Registered Funds) to the assignment or deemed assignment resulting from the
transactions contemplated by this Agreement shall be deemed given for all
purposes hereunder (A) if no Consent is required under Applicable Law or the
respective Investment Management Agreement (provided that there is no
notification or communication, either written or oral, that would reasonably be
construed as equivalent to a statement that such Client will terminate or
intends to terminate its Investment Management Agreement with the Company within
sixty (60) days following the Effective Time), (B) if Consent is required under
Applicable Law or the respective Investment Management Agreement, upon receipt
of the written Consent requested in the Notice (provided that, after the date of
receipt of such written Consent, there is no notification or communication,
either written or

                                       44
<PAGE>   50

oral, that would reasonably be construed as equivalent to a statement that such
Client will terminate or intends to terminate its Investment Management
Agreement with the Company within sixty (60) days following the Effective Time)
or (C) if such Consent is required under Applicable Law or the respective
Investment Management Agreement, and if the written Consent requested in any
Notice is not received on or prior to April 30, 2001, to the extent such Client
continues to accept the investment advisory services provided by the Company
under such Investment Management Agreement for the period ending on April 30,
2001, unless (1) such Client has at any time on or prior to April 30, 2001
terminated, or advised the Company, either orally or in writing, of its
intention to terminate such Investment Management Agreement or (2) there exists
any notice or communication, either written or oral, that would reasonably be
construed as equivalent to a statement that such Client will terminate or
intends to terminate its Investment Management Agreement with the Company within
sixty (60) days following the Effective Time. The Buyers shall be provided a
reasonable opportunity to review all such Consent materials to be used by the
Company prior to distribution. The Company shall promptly upon their receipt
make available to the Buyers copies of any and all substantive correspondence
between it and Clients or representatives or counsel of such Clients relating to
the Consent solicitation provided for in this Section 5.3 (a) and (b). Prior to
the Closing Date, no Buyer shall contact, in writing or otherwise, any Client or
any other Person who acts as an adviser to or "gatekeeper" for any Client with
respect to this Agreement or the transactions contemplated hereby or the Consent
without the prior approval of the Seller Representative, which approval shall
not be unreasonably withheld or delayed.

         (c) Client Procedures. In connection with obtaining the Client Consents
required by subsections (a) and (b), the Company shall take reasonable steps to
keep the Buyers informed of the status of obtaining such Client Consents and, to
the extent applicable, deliver to the Buyers prior to the Closing copies of all
such executed Client Consents and make available for inspection the originals of
such Consents prior to the Closing.

         (d) The Registered Funds' Proxy Statements. In connection with the
preparation and filing of the proxy solicitation materials referred to in the
subsection (a) above, the Company and the Buyers will cooperate with each other
and with the Investment Company Board of each Registered Fund, including
providing such information as may be reasonably requested for inclusion in such
proxy statements. Each of the Company, the Buyer and Buyer Parent agrees that
none of such information provided by it for inclusion in such proxy solicitation
materials will contain any untrue statement of a material fact, or omit to state
any material fact required to make the statements therein, in light of the
circumstances in which they were made, not misleading.

                                       45
<PAGE>   51

         (e) The Registered Funds' Registration Statements. Prior to the earlier
of the Closing Date or the termination of this Agreement, the Company and the
Buyers will cooperate with each other and each will endeavor in good faith to
cause each Registered Fund to file supplements or post-effective amendments to
that Registered Fund's registration statement on Form N-1A, which supplements or
amendments shall reflect changes as necessary in that Registered Fund's affairs
as a consequence of the transactions contemplated by this Agreement, and shall
cooperate with one another in causing each Registered Fund to make any other
filing necessary under Applicable Law to satisfy disclosure requirements to
enable the public distribution of the shares of beneficial interest of that
Registered Fund to continue.

         (f) Continued Qualification. Prior to the earlier of the Closing Date
or the termination of this Agreement, the Company shall use commercially
reasonable efforts to ensure that no Registered Fund takes any action that (a)
would prevent any Registered Fund from qualifying as a "regulated investment
company" under Section 851 of the Code, or (b) would be inconsistent with each
Registered Fund's prospectuses and other offering, advertising and marketing
materials, as amended or supplemented.

         Section 5.4 Investment Company Matters.

         (a) Each of the Common Sellers and Buyers agree that neither it nor any
of its Affiliates has any express or implied understanding or agreement that
would impose an "unfair burden" on any Registered Fund or would in any way
interfere with any Registered Fund's reliance on Section 15(f) of the Investment
Company Act as a result of the transactions contemplated by this Agreement. The
Common Sellers and Buyers agree to comply and to use their respective
commercially reasonable efforts to cause the respective boards of directors of
the Investment Company to comply with the provisions of Section 15(f) of the
1940 Act prior to the Effective Time. Following the Effective Time, the Buyers
shall not fail to take, and shall use reasonable best efforts to cause each
Affiliate of the Buyer Parent to not fail to take, any action if the failure to
take such action would have the effect, directly or indirectly, of causing the
requirements of any of the provisions of Section 15(f) of the Investment Company
Act not to be met in respect of this Agreement and the transactions contemplated
hereby. In that regard, each of Buyer Parent and the Buyer shall conduct its
business and shall, subject to the applicable fiduciary duties to the Registered
Funds, use its reasonable best efforts to cause each of its Affiliates to
conduct its business so as to assure that, insofar as within the control of
Buyer Parent, the Buyer or their respective Affiliates:

                  (i) for a period of three years after the Closing, at least
         75% of the members of the Investment Company Boards of each Registered
         Fund or their

                                       46
<PAGE>   52

         successors are not (A) "interested persons" of the investment adviser
         of such Registered Fund after the Closing, or (B) "interested persons"
         of the present or successor investment manager of such Registered Fund;
         and

                  (ii) for a period of two years after the Closing, there shall
         not be imposed on any Registered Fund an "unfair burden" as a result of
         the transactions contemplated under this Agreement, or any express or
         implied terms, conditions or understandings applicable thereto.

         (b) For a period of three years from the Closing, neither Buyer Parent
nor Buyer shall, and Buyer Parent and Buyer shall use reasonable best efforts to
cause their respective Affiliates not to, voluntarily engage in any transaction
that would constitute an "assignment" of any Investment Management Agreement
with any Registered Fund currently managed by the Company to which Buyer Parent,
the Buyer or any such Affiliate is a party, without first obtaining a covenant
in all material respects the same as that contained in Section 5.4(a).

         (c) The terms used in quotations in this Section 5.4 shall have the
meanings set forth in Sections 2(a)(4), 2(a)(19) and 15(f) of the Investment
Company Act.

         Section 5.5 Insurance. During the period from the date hereof to the
Effective Time, the Company will maintain in effect until superseded by policies
of Buyer or its Affiliates all casualty and public liability policies maintained
by the Company on the date hereof relating to its Business, or will procure
comparable replacement policies and maintain such replacement policies in effect
until such time.

         Section 5.6 Further Assurances. Each party to this Agreement shall
execute such documents and other papers and perform such further acts as may be
reasonably required to carry out the provisions hereof and the transactions
contemplated hereby. For a reasonable period of time after the Closing Date upon
the reasonable request of any party (or parties), the other parties shall
promptly execute and deliver such further instruments of assignment, transfer,
conveyance, endorsement, direction or authorization and other documents as may
be requested to effectuate the purposes of this Agreement and the transactions,
plans and arrangements contemplated hereby.

         Section 5.7 Efforts of Parties to Close. During the period from the
date of this Agreement through the Closing Date each party hereto shall use all
reasonable efforts to fulfill or obtain the fulfillment of the conditions
precedent to the

                                       47
<PAGE>   53

consummation of the transactions contemplated hereby, including the execution
and delivery of any documents, certificates, instruments or other papers that
are reasonably required for the consummation of the transactions contemplated
hereby. During the period from the date of this Agreement and continuing through
the Closing, except as required by Applicable Law or with the prior written
Consent of the other parties to this Agreement, no party to this Agreement shall
take any action which, or fail to take any action the failure of which to be
taken, would, or could reasonably be expected to, (a) result in any of the
representations and warranties set forth in this Agreement on the part of the
party taking or failing to take such action being or becoming untrue in any
respect that would cause Section 6.1(a) or Section 6.2(a) not to be satisfied;
(b) result in any conditions to the Closing set forth in Article VI not being
satisfied; (c) result in a material violation of any provision of this
Agreement; or (d) adversely affect or materially delay the receipt of any of the
requisite regulatory approvals. Buyer Parent shall cause Buyer to take all
actions necessary to perform and comply with all agreements, covenants and
obligations of Buyer hereunder.

         Section 5.8 Confidentiality and Announcements.

         (a) Buyer and Buyer Parent agree to be bound by and comply with the
provisions set forth in the Confidentiality Agreement, the provisions of which
are hereby incorporated herein by reference.

         (b) Neither the Company, the Sellers, Buyer nor Buyer Parent shall, and
each of the foregoing shall cause each of its Affiliates, employees, directors,
partners and agents, including accountants, lenders, counsel and investment
bankers not to, disclose to any Person (other than its Affiliates, employees,
partners and agents) any of the contents hereof other than as required by law
upon prior notice to the other parties.

         (c) Subject to Section 5.9, the parties to this Agreement shall consult
each other as to the form and substance of any public disclosures and shall use
all reasonable efforts to agree with each other as to the form and substance of
any press release related to this Agreement or the transactions contemplated
hereby.

         Section 5.9 Access, Certain Communications. Between the date of this
Agreement and the Closing Date, subject to any Applicable Laws relating to the
exchange of information, the Company shall afford to Buyer and Buyer Parent and
their authorized agents and representatives reasonable access, upon reasonable
notice and during normal business hours, to all contracts, documents and
information of or relating to the assets, liabilities, business, operations,
personnel and other aspects of

                                       48
<PAGE>   54

the Business; provided, however, that any such investigation shall be conducted
in a manner which does not unreasonably interfere with the Company's normal
operations and employee relations.

         Section 5.10 Regulatory Matters; Third Party Consents.

         (a) The parties to this Agreement shall cooperate with each other and
use all reasonable efforts promptly to prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, Consents, approvals, waivers
and authorizations of all third parties and Governmental Authorities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (it being understood that the Company and the Sellers shall be
responsible only for using all reasonable efforts to obtain all such approvals,
waivers and Consents from such parties with whom the Company is in contractual
privity (including all Clients) and that such efforts shall not require action
that in the Company's judgment could have an adverse impact on client
relationships. If any required Consent of or waiver by any third party
(excluding any Governmental Authority) is not obtained prior to the Closing, the
parties hereto, each without cost, expense or liability to the other (except as
provided in Article VII hereof), shall cooperate in good faith to seek, if
possible, an alternative arrangement to achieve the economic results intended.
The parties to this Agreement will have the right to review in advance, and will
consult with the other on, in each case subject to Applicable Laws relating to
the exchange of information, all of the information relating to Buyer, Buyer
Parent, the Company or the Sellers, as the case may be, which appear in any
filing made with, or written materials submitted to, any third party or any
Governmental Authority in connection with the transactions contemplated by this
Agreement, provided, however, that nothing contained herein shall be deemed to
provide any party to this Agreement with a right to review any information
provided to any Governmental Authority on a confidential basis in connection
with the transactions contemplated hereby. The parties to this Agreement agree
that they will consult with each other with respect to the obtaining of all
permits, Consents, approvals and authorizations of all third parties and
Governmental Authority necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the others apprised of
the status of matters relating to completion of the transactions contemplated
herein. The party responsible for a filing as set forth above shall promptly
deliver or make available to the other parties hereto evidence of the filing of
all applications, filings, registrations and notifications relating thereto
(except for any confidential portions thereof), and any supplement, amendment or
item of additional information in connection therewith (except for any
confidential portions thereof). The party responsible for a filing shall also
promptly deliver or make available to the other

                                       49
<PAGE>   55

parties hereto a copy of each material notice, order, opinion and other item of
correspondence received by such filing party from any Governmental Authority in
respect of any such application (except for any confidential portions thereof).
In exercising the foregoing rights and obligations, Buyer, Buyer Parent, the
Company and the Sellers shall each act reasonably and as promptly as
practicable.

         (b) The parties to this Agreement shall promptly advise each other upon
receiving any communication from any Governmental Authority whose Consent or
approval is required for consummation of the transactions contemplated by this
Agreement which causes such party to believe that there is a reasonable
likelihood that any requisite regulatory approval will not be obtained or that
the receipt of any such approval will be materially delayed.

         Section 5.11 Expenses. Except as otherwise expressly provided herein,
Buyer and Buyer Parent on the one hand, and the Sellers and the Company on the
other hand, shall each bear their respective direct and indirect expenses
incurred in connection with the negotiation and preparation of this Agreement
and the consummation of the transactions contemplated hereby, including all
direct and indirect expenses incurred in connection with the Consents required
to be obtained pursuant to Section 5.3.

         Section 5.12 Non-Foreign Person Affidavit. Each of the Sellers shall,
on or prior to the Closing Date, furnish to the Buyer a non-foreign person
affidavit that complies with the requirements of Section 1445 of the Code;
provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the failure of any or all of the Sellers to provide such
affidavit shall not release Buyers from their obligation to consummate the
transactions contemplated hereby.

         Section 5.13 Releases.

         (a) If the transactions contemplated by this Agreement shall be
consummated, effective at the Effective Time, each Common Seller hereby agrees
to the termination of Section 14 of the Prior Purchase Agreement and the
Shareholders Agreement and hereby releases and discharges the Company, Buyer and
Buyer Parent, the Preferred Seller and their respective Affiliates and their
respective past, present and future officers, directors, agents and employees,
of, from, against and in respect of any action, cause of action, damage, claim,
or liability based upon, arising out of, or relating to the ownership by such
Common Seller of shares of the Common Stock of the Company (including, without
limitation, any claim for payment of any dividends accrued and unpaid, whether
or not declared, or declared but unpaid) at any time or for any period ending
on, prior to or after the Effective Time, other than

                                       50
<PAGE>   56

any claim based upon rights of such Common Seller under this Agreement
(including the right to receive the merger consideration payable to such Common
Seller as provided in Article II hereof).

         (b) If the transaction contemplated by this Agreement shall be
consummated, effective at the Effective Time, the Preferred Seller hereby agrees
to the termination of Section 14 of the Prior Purchase Agreement and hereby
releases and discharges the Company, Buyer and Buyer Parent, the Common Sellers
and their respective Affiliates and their respective past, present and future
officers, directors, agents and employees, of, from, against and in respect of
any action, cause of action, damage, claim or liability based upon or arising
out of, or relating to, the ownership by the Preferred Seller of shares of the
Capital Stock of the Company (including, without limitation, any claim for
payment of any accrued and unpaid dividends, whether or not declared, in respect
of the Preferred Stock) and any claim for payment of any amounts in respect of
the Preferred Stock, whether characterized as a payment in redemption of the
Preferred Stock or otherwise and whether based on the terms of the designation
of the Preferred Stock contained in the Amended Articles of Incorporation of the
Company or otherwise) at any time or for any period ending on, prior to or after
the Effective Time, other than any other claim based upon rights of the
Preferred Seller under this Agreement (including the right to receive the Merger
Consideration payable to the Preferred Stock as provided in Article II hereof).

         Section 5.14 Retention Bonus Plan. Prior to the Effective Time, the
Surviving Corporation (or its successor or assignee) shall have adopted and
approved a Retention Bonus Plan in substantially the form attached as Annex B
(the "Retention Plan) and following its adoption such Retention Plan shall not
be rescinded or modified without the written consent of the Seller
Representative.

         Section 5.15 Option Holders. Prior to the Closing Date, the Company
shall accelerate the vesting of any unvested portion of the outstanding options
to acquire Common Stock owned by each of Mark W. Lattis and Matthew G. Bevin on
the date hereof (each an "Option"), and each of Mark W. Lattis and Matthew G.
Bevin shall exercise in full their respective Options. Mark W. Lattis further
agrees that at such time as he exercises any such Option he shall become a
Common Seller under this Agreement and shall have all of the rights, duties and
obligations thereof.

         Section 5.16 Termination of Employee Benefit Plans. The Common Sellers
covenant and agree that, if requested in writing by Buyer Parent prior to the
Closing Date, the Common Sellers will use best efforts in accordance with
Applicable Law to cause the Company to terminate, effective as of immediately
prior to the Closing Date, any Plan including, but not limited to, providing any
required notices, adopting

                                       51
<PAGE>   57

any required amendments or resolutions effective before the Closing Date, and
fulfilling all of their obligations to contribute to and to administer such
Plans in accordance with their terms.

         Section 5.17 Shareholder Approval of Certain Matters. Prior to the
Closing Date, the Company shall take all actions to obtain, and shall obtain,
the requisite approval of the Sellers, as described in Section 280G(b)(5) of the
Code and Regulations Section 1.280G-1 thereunder, with respect to payments which
may be made to any person who, with respect to the Company, is a "disqualified
individual" (as such term is defined for purposes of Section 280G of the Code)
if such payment could reasonably be expected to result in the imposition of any
excise tax imposed under Section 4999 of the Code. The Company shall provide to
Buyer Parent at the Closing evidence of such approval.

         Section 5.18 Seller Representative Approval. Each of Buyer Parent and
the Seller Representative agree that, for the period beginning on the day
following the last day of the calendar month ending immediately prior to the
Closing Date and ending on the last day of the third Yearly Period, no employee
of the Company shall be transferred to, or reassigned to perform duties for,
Buyer Parent or any of its Affiliates (other than the Company) without the prior
written consent of the Seller Representative.

         Section 5.19 Payment of Preferred Dividend Amount.

         (a) The Common Sellers shall cause the Company to, and the Company
shall, prepare and deliver a statement to the Preferred Seller setting forth the
calculation in reasonable detail of the Preferred Dividend Amount at least 15
days prior to the Closing Date, with such statement being subject to prompt
review by Preferred Seller, such review to be consistent with past practice.

         (b) Prior to the Closing Date, the Common Sellers shall cause the
Management Committee of the Company to declare and the Company to pay the
Preferred Dividend Amount in full together with any unpaid portion of the
dividend payable on the Preferred Stock on February 15, 2001.

         (c) The Common Sellers shall cause the Company to, and the Company
shall, pay the Preferred Dividend Amount to the Preferred Seller at least two
(2) Business Days prior to the Closing Date.

                                       52
<PAGE>   58

                                   ARTICLE VI
                              CONDITIONS TO CLOSING

         Section 6.1 Conditions to Buyer's and Buyer Parent's Obligations. The
obligations of Buyer and Buyer Parent to effect the Closing and consummate the
Merger shall be subject to the following conditions, any of which may be waived
in writing by Buyer Parent:

         (a) The representations and warranties of the Sellers set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date; provided, however, that for purposes of determining the
satisfaction of the condition contained in this Section 6.1(a), no effect shall
be given to any exception in such representations and warranties relating to
knowledge, materiality, or a Company Material Adverse Effect, and such
representations and warranties shall be deemed to be true and correct in all
material respects only if the failure or failures of such representations and
warranties to be so true and correct without regard to knowledge, materiality
and Company Material Adverse Effect exceptions do not represent in the aggregate
a Company Material Adverse Effect;

         (b) Each Common Seller and the Preferred Seller shall have performed
and complied in all material respects with the agreements, covenants,
obligations and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date;

         (c) The Buyer shall have received a certificate, dated as of the
Closing Date, signed by the Seller Representative on behalf of the Common
Sellers and by a duly authorized officer of the Preferred Seller as to matters
contained in paragraphs (a) and (b) of this Section 6.1;

         (d) The Company shall have received the affirmative written Consents of
Clients (other than Clients that are Registered Funds) comprising at least
seventy percent (70%) of the Base Revenue Run-Rate.

         (e) Each of (i) Carl W. Hafele, John W. Ferreby, David B. Hiller,
William F. Chandler, Michael C. Heyman, Stephen G. Mullins, Larry J. Walker and
Randall T. Zipfel and (ii) any four (4) of the following employees: David B.
Chick, Catherine R. Stodghill, Brent A. Bell, Erik N. Evans, Matthew G. Bevin
and Mark W. Lattis, shall have entered into Employment Agreements substantially
in the form set forth in Annex C hereto, and neither any Person listed in clause
(i) in this

                                       53
<PAGE>   59

subsection (e) nor any three (3) of the Persons listed in clause (ii) in this
subsection (e) shall have terminated his or her employment with the Company
under his or her respective Employment Agreement prior to the Effective Time.

         Section 6.2 Conditions to the Company and the Sellers' Obligations. (i)
The obligations of the Sellers with respect to subsections (a), (b), (c) and (d)
of this Section 6.2 to effect the Closing and consummate the merger shall be
subject to the conditions set forth therein, which may be waived in writing by
the Seller Representative and the Preferred Seller, (ii) the obligations of the
Common Sellers with respect to subsection (e) of this Section 6.2 to effect the
Closing and consummate the merger shall be subject to the condition set forth
therein, which may be waived in writing by the Seller Representative and (iii)
the obligation of the Preferred Seller with respect to subsection (f) of this
Section 6.2 to effect the Closing and consummate the merger shall be subject to
the condition set forth therein, which may be waived in writing by the Preferred
Seller:

         (a) the representations and warranties of Buyer and Buyer Parent
contained in this Agreement shall be true in all material respects as of the
date of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date; provided, however, that for purposes of determining
the satisfaction of the condition contained in this Section 6.2(a), no effect
shall be given to any exception in such representations and warranties relating
to knowledge, materiality or a Buyer Material Adverse Effect, and such
representations and warranties shall be deemed to be true and accurate in all
material respects only if the failure or failures of such representations and
warranties to be so true and correct without regard to knowledge, materiality,
and Buyer Material Adverse Effect exceptions do not represent in the aggregate a
Buyer Material Adverse Effect;

         (b) Buyer and Buyer Parent shall have performed and complied in all
material respects with the agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by them at or prior
to the Closing Date;

         (c) Buyer shall have delivered to the Seller Representative and the
Preferred Seller a certificate, dated as of the Closing Date, signed on behalf
of Buyer by one of its executive officers confirming the satisfaction of the
conditions contained in paragraphs (a) and (b) of this Section 6.2;

         (d) Buyer Parent shall have delivered to the Seller Representative and
the Preferred Seller a certificate, dated as of the Closing Date, signed on
behalf of Buyer

                                       54
<PAGE>   60

Parent by one of its executive officers confirming the satisfaction of the
conditions contained in paragraphs (a) and (b) of this Section 6.2;

         (e) The Surviving Corporation (or its successor or assignee) shall have
adopted and approved the Retention Plan in substantially the form attached as
Annex B and such approval shall not have been rescinded or modified by the
Surviving Corporation (or its successor or assignee) prior to the Effective
Time; and

         (f) The Company shall have declared and paid to the Preferred Seller
the dividend in an amount equal to the Preferred Dividend Amount (such amount in
addition to, and not including, the dividend payable on February 15, 2001).

         Section 6.3 Mutual Conditions. The obligations of each party to this
Agreement to effect the Closing shall be subject to the following conditions,
any of which may be waived in writing by the Company, the Seller Representative,
the Preferred Seller and Buyer Parent:

         (a) No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect. No proceeding initiated by any Governmental Authority seeking an
injunction shall be pending. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by any
Governmental Authority which prohibits, restricts or makes illegal consummation
of the transactions contemplated hereby; and

         (b) In respect of the notifications of the parties hereto pursuant to
the HSR Act, the applicable waiting period and any extensions thereof shall have
expired or terminated; and

         (c) The Closing Revenue Run-Rate shall not be less than 85% of the Base
Revenue Run-Rate.

                                   ARTICLE VII
                                 INDEMNIFICATION

         Section 7.1 Survival of Representations, Warranties and Covenants. All
representations and warranties of the Sellers contained in this Agreement,
including the Company Disclosure Memorandum made a part hereof, (other than the
representations and warranties contained in Sections 3.3 and 3.17), and all
covenants

                                       55
<PAGE>   61

or other agreements of the Sellers which are specified to occur on or prior to
Closing, shall survive until March 31, 2003. The representations and warranties
of each Seller in Section 3.3 made by such Seller in respect of such Seller or
Capital Stock owned by such Seller shall survive forever. The representations
and warranties of the Common Sellers contained in Section 3.17 shall survive
until the expiration of the applicable statutory periods of limitation. Any
covenant or other agreement herein of any party any portion of the performance
of which may or is specified to occur after the Closing shall survive the
Closing hereunder indefinitely or for such lesser period of time as may be
specified therein. The representations and warranties of the Buyers contained in
this Agreement, and all covenants or other agreements of the Buyers which are
specified to occur on or prior to Closing, shall survive until March 31, 2003.

         Section 7.2 Obligations of the Common Sellers.

         (a) Subject to the other provisions of this Article VII, from and after
the Closing, each Common Seller shall indemnify, defend and hold harmless Buyer
and Buyer Parent and their respective employees, officers, partners and
Affiliates from and against any and all Losses which any of them may suffer,
incur or sustain arising out of, attributable to, or resulting from:

                  (i) any inaccuracy in or breach of any of the representations
         and warranties of such Common Seller made in this Agreement; or

                  (ii) any breach or nonperformance of any of the covenants or
         other agreements made and to be performed by the Common Sellers prior
         to, at or after the Closing, in each case in or pursuant to this
         Agreement.

         (b) For purposes of Section 7.2(a)(i), the existence of an inaccuracy
or breach of any representation or warranty of any Common Seller made in this
Agreement shall be determined without giving effect to any exception in such
representation or warranty relating to materiality or a Company Material Adverse
Effect.

         (c) No Common Seller shall be obligated individually to provide
indemnification exceeding, in the aggregate, its pro rata share (based on such
Common Seller's share of the aggregate Merger Consideration paid to the Common
Sellers under Article II) of any Loss indemnifiable under Section 7.2(a),
provided that (i) each Common Seller shall be obligated to provide
indemnification for one hundred percent (100%) of any Loss to the extent
attributable to an inaccuracy in or breach of (A) the representation and
warranty contained in Sections 3.3 or 3.4 made

                                       56
<PAGE>   62

by such Common Seller in respect of such Common Seller or Common Stock owned by
such Common Seller and (B) the covenant contained in Section 5.15 made by such
Common Seller in respect of such Common Seller, without regard to the
limitations set forth in Section 7.7(a) or Section 7.8(a) and (ii) no other
Common Seller or the Preferred Seller shall be obligated to provide any
indemnification with respect to such Loss. The Buyers shall seek payment for
indemnification under this Article VII for any Loss from the Common Sellers
(other than a Loss in respect of an inaccuracy in or breach of the
representations and warranties in Sections 3.3 and 3.4 or a breach or
nonperformance of the covenant in Section 5.15) on a pro rata basis (based on
such Common Seller's share of the aggregate Merger Consideration paid to the
Common Sellers under Article II).

         (d) Notwithstanding any other provision of this Article VII other than
Section 7.2(e), each of the Common Sellers agrees to indemnify the Buyer from
and against the entirety of any Loss the Buyer may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any liability of the
Company (x) for any Taxes of the Company with respect to any Tax year or portion
thereof ending on or before the Closing Date (or for any Tax to the extent
allocable (determined in a manner consistent with Section 8.1(b) of this
Agreement) to the portion of such period beginning before and ending on the
Closing Date), to the extent such Taxes are not reflected in the reserve for Tax
liabilities (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) shown on the face of the
Estimated Closing Balance Sheet (rather than in any notes thereto), and (y) for
the unpaid Taxes of any Person (other than the Company) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.

         (e) Notwithstanding anything to the contrary in this Agreement, in no
event shall any Common Seller be required to indemnify the Buyers in respect of
any Tax liability of the Company arising from the failure of the transactions
contemplated by this Agreement to qualify as a reorganization pursuant to
Section 368(a) of the Code.

         (f) Notwithstanding anything to the contrary in this Agreement, the
Buyers shall not be entitled to recover for the same liability under Section
7.2(a) and Section 7.2(d).

         Section 7.3 Obligations of the Preferred Seller.

         (a) Subject to the other provisions of this Article VII, from and after
the Closing, the Preferred Seller shall indemnify, defend and hold harmless
Buyer and

                                       57
<PAGE>   63

Buyer Parent and their respective employees, officers, partners and Affiliates
from and against any and all Losses which any of them may suffer, incur or
sustain arising out of, attributable to, or resulting from:

                  (i) any inaccuracy in or breach of any of the representations
         and warranties of the Preferred Seller made in this Agreement; or

                  (ii) any breach or nonperformance of any of the covenants or
         other agreements made and to be performed by the Preferred Seller under
         Sections 5.2, 5.6, 5.7, 5.8(b) and (c), 5.10, 5.11, 5.12, 5.13 or 5.17
         prior to, at or after the Closing, in each case in or pursuant to this
         Agreement.

         (b) For purposes of Section 7.3(a)(i), the existence of an inaccuracy
or breach of any representation or warranty of the Preferred Seller made in this
Agreement shall be determined without giving effect to any exception in such
representation or warranty relating to materiality or a Company Material Adverse
Effect.

         Section 7.4 Obligations of Buyer and Buyer Parent.

         (a) Subject to the other provisions of this Article VII, from and after
the Closing, each of Buyer and Buyer Parent hereby agree, jointly and severally,
to indemnify, defend and hold harmless the Sellers and their respective agents
or representatives from and against any and all Losses which any of them may
suffer, incur, or sustain to the extent arising out of, attributable to, or
resulting from:

                  (i) any inaccuracy in or breach of any of the representations
         and warranties of Buyer or Buyer Parent made in this Agreement; or

                  (ii) any breach or nonperformance of any of the covenants or
         other agreements made and to be performed by Buyer or Buyer Parent in
         or pursuant to this Agreement.

         (b) For purposes of Section 7.4(a)(i), the existence of an inaccuracy
or breach of any representation or warranty of Buyer Parent or Buyer made in
this Agreement shall be determined without giving effect to any exception in
such representation or warranty relating to materiality or a Buyer Material
Adverse Effect.

         (c) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Buyers be required to indemnify any of the Sellers in respect of
any Tax liability of such Sellers arising from the failure of the transactions
contemplated

                                       58
<PAGE>   64

by this Agreement to qualify as a reorganization pursuant to Section 368(a) of
the Code.

         Section 7.5 Procedure.

         (a) Notice of Claims. Any Indemnified Party seeking indemnification for
any Loss or potential Loss shall give written notice to the applicable
Indemnifying Party from whom indemnification hereunder is being sought, and if
the Indemnified Party is a Common Seller or the Preferred Seller, then to the
other Common Sellers and the Preferred Seller, specifying in detail (i) the
representation and warranty or covenant or other agreement that is alleged to
have been inaccurate or to have been breached, (ii) the basis for such
allegation, including the provision of supporting documentation and (iii) if
known, the aggregate amount of the Losses for which a claim is being made under
this Article VII or, to the extent that such Losses are not known or have not
been incurred at the time such claim is made, an estimate, to be prepared in
good faith and accompanied by supporting documentation, of the aggregate
potential amount of such Losses. Written notice to such Indemnifying Party of
the existence of a Claim shall be given by the Indemnified Party promptly after
the Indemnified Party first receives notice of the potential claim; provided,
however, that the Indemnified Party shall not be foreclosed from seeking
indemnification pursuant to this Article VII by any failure to provide such
prompt notice of the existence of a Claim to the applicable Indemnifying Party
except and only to the extent that such Indemnifying Party actually incurs an
incremental out-of-pocket expense or otherwise has been materially damaged or
prejudiced as a result of such delay.

         (b) Defense. Except as otherwise provided herein, in the case of any
claim asserted by a Person that is not a party to this Agreement (a "Third Party
Claim"), an Indemnifying Party may elect to compromise or defend, at such
Indemnifying Party's own expense and by such Indemnifying Party's own counsel
(which counsel shall be reasonably satisfactory to the Indemnified Party), any
Third Party Claim. If an Indemnifying Party elects to compromise or defend such
Third Party Claim, it shall promptly notify the Indemnified Party and any other
Indemnifying Parties of its intent to do so, and the Indemnified Party shall
cooperate, at the expense of the applicable Indemnifying Party or Indemnifying
Parties, in the compromise of, or defense against, such Third Party Claim. For
so long as no Indemnifying Party elects to compromise or defend against the
Third Party Claim, fails to notify the Indemnified Party of its election to do
so, or otherwise abandons the defense of such Third Party Claim, (i) the
Indemnified Party may pay (without prejudice of any of its rights as against any
applicable Indemnifying Party), compromise or defend such Third Party Claim
(until such defense is assumed by an

                                       59
<PAGE>   65

applicable Indemnifying Party) and (ii) the costs and expenses of the
Indemnified Party incurred in connection therewith shall be indemnifiable by the
applicable Indemnifying Party or Indemnifying Parties pursuant to the terms of
this Agreement. Notwithstanding anything to the contrary contained herein, in
connection with any Third Party Claim in which the Indemnified Party shall
reasonably conclude, based upon the written advice of its counsel, that (iii)
there is a conflict of interest between an applicable Indemnifying Party and the
Indemnified Party in the conduct of the defense of such Third Party Claim or
(iv) there are specific defenses available to the Indemnified Party which are
different from or additional to those available to an applicable Indemnifying
Party and which could be materially adverse to such Indemnifying Party, then the
Indemnified Party shall have the right to assume and direct the defense of such
Third Party Claim. In such an event, the applicable Indemnifying Party or
Indemnifying Parties shall pay the reasonable fees and disbursements of their
own counsel and one counsel to all the Indemnified Parties. Notwithstanding the
foregoing, neither any Indemnifying Party nor the applicable Indemnified Party
may settle or compromise any claim over the objection of any other Indemnifying
Party that has any liability with respect to such claim or any other Indemnified
Party that is a party to such claim; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld by any Person. In
any event, except as otherwise provided herein, any applicable Indemnified Party
and any Indemnifying Party that has any liability with respect to such claim may
each participate, at its own expense, in the defense of such Third Party Claim
without, in the case of such Indemnified Party, any right to control such
defense. If an Indemnifying Party chooses to defend any claim, the Indemnified
Party shall make available to such Indemnifying Party any personnel or any
books, records or other documents within its control that are reasonably
necessary or appropriate for such defense, subject to the receipt of appropriate
confidentiality agreements.

         (c) Settlement. If a settlement offer solely for money damages is made
by a third party claimant, and an applicable Indemnifying Party notifies the
applicable Indemnified Party in writing of such Indemnifying Party's willingness
to accept the settlement offer and pay the amount called for by such offer, and
the Indemnified Party declines to accept such offer, the Indemnified Party may
continue to contest such claim, free of any participation by the Indemnifying
Party, and the amount of any ultimate liability with respect to such
Indemnifiable Claim that the applicable Indemnifying Party or Indemnifying
Parties has an obligation to pay hereunder shall be limited to the lesser of (i)
the amount of the settlement offer that the Indemnified Party declined to accept
plus the costs and expenses of the Indemnified Party prior to the date the
Indemnifying Party notifies the Indemnified Party of the Indemnifying Party's
willingness to settle or compromise such Third Party Claim and (ii) the
aggregate Losses of the Indemnified Party with respect to such claim.

                                       60
<PAGE>   66

         Section 7.6 Survival of Indemnity. Notwithstanding anything to the
contrary in this Article VII, no Indemnified Party shall have any right to
indemnification with respect to any matter as to which formal notice satisfying
the requirements of Section 7.5(a) shall not have been provided by the
Indemnified Party to the applicable Indemnifying Party prior to the last day of
the period specified in Section 7.1 for the survival of the representation,
warranty, covenant or agreement the inaccuracy or breach or nonperformance of
which is the basis for the Indemnifiable Claim. Any matter as to which a claim
has been asserted by formal notice satisfying the requirements of Section 7.5(a)
and within the time limitation applicable by reason of the immediately preceding
sentence that is pending or unresolved at the end of any applicable limitation
period under this Article VII or the statute of limitations applicable to such
claim shall continue to be covered by this Article VII notwithstanding any
applicable statute of limitations (which the parties hereby waive solely with
respect to such circumstances) or the expiration date described in the
immediately preceding sentence of this Section 7.6 until such matter is finally
terminated or otherwise resolved by the parties under this Agreement or by a
court of competent jurisdiction and any amounts payable hereunder are finally
determined and paid.

         Section 7.7 Minimum Losses.

         (a) Except as provided in Section 7.2(d) and the proviso to Section
7.2(c), no Indemnified Party under Section 7.2 shall have any right to
indemnification under this Article VII until aggregate Losses incurred by the
Indemnified Parties under Section 7.2 exceed $2,500,000 after which time only
the Losses in excess of such amount shall be recoverable in accordance with the
terms hereof.

         (b) No Indemnified Party under Section 7.4 shall have any right to
indemnification under this Article VII until aggregate Losses incurred by the
Indemnified Parties under Section 7.4 exceed $2,500,000 after which time only
the Losses in excess of such amount shall be recoverable in accordance with the
terms hereof.

         Section 7.8 Maximum Indemnification.

         (a) Except as provided in the proviso to Section 7.2(c), in no event
shall a Common Seller be obligated to provide indemnification exceeding, in the
aggregate, more than 50% of the amount of the Merger Consideration (valued as of
the time of receipt by such Common Seller) received by such Common Seller
hereunder.

                                       61
<PAGE>   67

         (b) In no event shall the Buyers be obligated to provide
indemnification following the Closing exceeding, in the aggregate, ten percent
(10%) of the Merger Consideration (valued as of the time of payment).

         Section 7.9 Subrogation. The rights of any Indemnifying Party shall be
subrogated to any right of action which the Indemnified Party may have against
any other person with respect to any matter giving rise to a claim for
indemnification hereunder.

         Section 7.10 Adjustments to Indemnification Obligations. The amount
which any Indemnifying Party is or may be required to pay any Indemnified Party
pursuant to Section 7.2, 7.3 or 7.4 hereof shall be reduced (including without
limitation, retroactively) by any insurance proceeds or other amounts actually
recovered by or on behalf of such Indemnified Party in reduction of the related
Loss. If an Indemnified Party shall have received the payment required by this
Agreement from an Indemnifying Party in respect of a Loss and shall subsequently
actually receive insurance proceeds or other amounts in respect of such Loss,
then such Indemnified Party shall pay to such Indemnifying Party a sum equal to
the amount of such insurance proceeds or other amounts actually received (net of
any expenses, other than the cost of carrying such insurance, in obtaining the
same).

         Section 7.11 Exclusive Remedy. To the extent not prohibited by law,
this Article VII shall provide the sole and exclusive remedy for any and all
Losses in the event the Closing occurs, including, without limitation, those
asserted by any party, federal, state, local or foreign governmental entity,
third party, or former or present employee, sustained or incurred by the parties
hereto and relating to this Agreement; provided that this Article VII shall not
restrict the ability of any party to seek specific performance of this Agreement
or any provision hereof or any other form of equitable relief against any breach
by any other party hereto to the extent provided by Section 10.9.

         Section 7.12 Right of Off-Set/Set-Off. Buyers shall have the right to
off-set or set-off any indemnification payment from a Common Seller or the
Preferred Seller to which either of them is entitled pursuant to this Article
VII against any other payment to be made by Buyer or Buyer Parent any of their
Affiliates to such Common Seller or the Preferred Seller, whether pursuant to
this Agreement or, in the case of the Common Sellers, otherwise, provided,
however, that (a) such right of off-set or set-off shall only be exercisable by
Buyer Parent, Buyer or any of their Affiliates only to the extent that either
(i) the Preferred Seller, the Seller Representative, Buyer Parent and Buyer have
agreed to such off-set or set-off, or (ii) if no such agreement has been made,
to the extent that a court of competent

                                       62
<PAGE>   68

jurisdiction has issued a final judgment, from which no appeal can be or is
timely taken, as to the liability under this Article VII of the Common Seller or
the Preferred Seller against which such off-set or set-off is to be made in
respect of the Claim which gave rise to the indemnification payment from such
Common Seller or the Preferred Seller and (b) Buyer Parent or such Affiliate
shall off-set or set-off such indemnification payment on a pro rata basis as to
each Common Seller to the greatest extent practicable. To the extent that Buyer
Parent or Buyer is entitled to recover all or a portion of any Loss with respect
to any Claim that is finally adjudicated under subsection (ii) of the
immediately preceding sentence, Buyer Parent or Buyer shall be entitled to
accrued interest from the Common Sellers in respect of such Loss accruing from
the date that Buyer Parent or Buyer gave written notice of the claim to which
such Loss relates to the Seller Representative at an interest rate equal to
LIBOR plus 2%. No exercise by Buyers, or either of them, of such right of
off-set or set-off shall constitute a default in the payment of any amount
against which such off-set or set-off is made.

         Section 7.13 Adjustment. Any payment made by a party hereto pursuant to
this Article VII shall be deemed an adjustment to the Aggregate Purchase Price
for Tax purposes. The Buyers shall not be entitled to indemnification under this
Article VII in respect of any Loss for which an adjustment has previously been
made pursuant to Article II.

         Section 7.14 Seller Representative. Except in respect of a claim
against a Common Seller for any Loss attributable to an inaccuracy in a breach
of the representations and warranties contained in Sections 3.3 and 3.4 made by
such Common Seller in respect of such Seller or Capital Stock owned by such
Common Seller, but notwithstanding any other provision in this Agreement to the
contrary, all rights of the Common Sellers as Indemnifying Parties or as
Indemnified Parties under Article VII shall be exercised exclusively by the
Seller Representative, and the Buyer and Buyer Parent shall be entitled to deal
exclusively with the Seller Representative in respect of all such rights.

                                       63
<PAGE>   69

                                  ARTICLE VIII
                                   TAX MATTERS

         Section 8.1 Tax Matters. The following provisions shall govern the
allocation of responsibility as between Buyer and Common Sellers for certain tax
matters following the Closing Date:

         (a) Tax Periods Beginning Before the Closing Date. Buyers shall prepare
or cause to be prepared and file or cause to be filed all Tax Returns for the
Tax liabilities of the Company for all periods ending on or prior to the Closing
Date which are filed after the Closing Date and for all periods beginning prior
to and ending after the Closing Date, which Tax Returns shall be prepared
consistent with past practice. Buyers shall provide copies of each such Tax
Return to the Seller Representative for its review no later than sixty (60) days
prior to the date on which such Tax Return is required to be filed. If, within
15 days after the provision of any such Tax Return to the Seller Representative,
the Seller Representative objects to any item on such Tax Return, the Buyers and
the Seller Representative shall negotiate in good faith to resolve such dispute,
and, if they are unable to do so, shall submit such dispute to an accounting
firm reasonably agreeable to both of them, which accounting firm's resolution
shall be binding. The fees and expenses of such accounting firm shall be borne
by the Buyers and the Common Sellers in proportion to which the matter in
dispute is resolved against each of them.

         (b) Other Taxes Accruing Before the Closing Date. The Common Sellers
shall pay to Buyer within fifteen (15) days after the date on which Taxes are
paid with respect to any periods prior to the Closing Date an amount equal to
the portion of such Taxes not reflected in the reserve for Tax liabilities
(rather than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) shown on the face of the Estimated
Closing Balance Sheet (rather than in any notes thereto). For purposes of this
Section, in the case of any Taxes that are imposed on a periodic basis and are
payable for a Taxable period that begins prior to the Closing Date (but does not
end on) the Closing Date, the portion of such Tax which relates to the portion
of such Taxable period ending on the Closing Date shall (x) in the case of any
Taxes other than Taxes based upon or related to income or receipts, be deemed to
be the amount of such Tax for the entire Taxable period multiplied by a fraction
the numerator of which is the number of days in the Taxable period ending on the
Closing Date and the denominator of which is the number of days in the entire
Taxable period, and (y) in the case of any Tax based upon or related to income
or receipts be deemed equal to the amount which would be payable if the relevant
Taxable period ended on the Closing Date. Any credits relating to a

                                       64
<PAGE>   70

Taxable period that begins before and ends after the Closing Date shall be taken
into account as though the relevant Taxable period ended on the Closing Date.
All determinations necessary to give effect to the foregoing allocations shall
be made in a manner consistent with prior practice of the Company.

         (c) Cooperation on Tax Matters

                  (i) Buyers and the Common Sellers shall cooperate fully, as
         and to the extent reasonably requested by the other party, in
         connection with the filing of Tax Returns pursuant to this Section and
         any audit, litigation or other proceeding with respect to Taxes. Such
         cooperation shall include the retention and (upon the other party's
         request) the provision of records and information which are reasonably
         relevant to any such audit, litigation or other proceeding and making
         employees available on a mutually convenient basis to provide
         additional information and explanation of any material provided
         hereunder. The Buyer and the Common Sellers agree (A) to retain all
         books and records with respect to Tax matters pertinent to the Company
         relating to any taxable period beginning before the Closing Date until
         the expiration of the statute of limitations (and, to the extent
         notified by Buyer or the Common Sellers, any extensions thereof) of the
         respective taxable periods, and to abide by all record retention
         agreements entered into with any taxing authority, and (B) to give the
         other party reasonable written notice prior to transferring, destroying
         or discarding any such books and records and, if the other party so
         requests, the Buyers or the Common Sellers, as the case may be, shall
         allow the other party to take possession of such books and records.

                  (ii) Buyer and the Common Sellers further agree, upon request,
         to use their best efforts to obtain any certificate or other document
         from any Governmental Authority or any other Person as may be necessary
         to mitigate, reduce or eliminate any Tax that could be imposed
         (including, but not limited to, with respect to the transactions
         contemplated hereby).

                  (iii) Buyer and the Common Sellers further agree, upon
         request, to provide the other party with all information that either
         party may be required to report pursuant to Section 6043 of the Code
         and all Treasury Department Regulations promulgated thereunder.

         (d) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any New York
State Gains

                                       65
<PAGE>   71

Tax, New York City Transfer Tax and any similar tax imposed in other states or
subdivisions), shall be paid by the Common Sellers and/or Preferred Seller, as
the case may be, when due, and the Common Sellers and/or Preferred Seller will,
at their own expense, file all necessary Tax Returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp, registration
and other Taxes and fees, and, if required by applicable law, Buyer will, and
will cause its affiliates to, join in the execution of any such Tax Returns and
other documentation.

         (e) The Buyers shall not amend any Tax Returns of the Company in
respect of which any Common Seller bears any liability under this Agreement
without the prior written consent of the Seller Representative.

                                   ARTICLE IX
                                   TERMINATION

         Section 9.1 Termination.

         (a) This Agreement may be terminated on or prior to the Closing Date as
follows:

                  (i) by written consent of the Company, the Seller
         Representative and Buyer Parent;

                  (ii) by the Company, Seller Representative or Buyer Parent if
         a condition to its respective obligation to close set forth in Section
         6.3 (or 6.1 or 6.2, as the case may be) cannot be satisfied at or prior
         to the date set forth in Section 9.1(a)(v) below unless the failure of
         such condition to be satisfied is as a result of the breach or
         non-performance of the condition by the party seeking to terminate this
         Agreement;

                  (iii) by the Company or the Seller Representative if there has
         been a material breach of any representation, warranty, covenant or
         agreement contained in this Agreement on the part of Buyer or Buyer
         Parent and such breach has not been cured within 20 Business Days after
         written notice to Buyer or Buyer Parent (provided that no cure period
         shall be required for a breach which by its nature cannot be cured)
         such that the conditions set forth in Section 6.2 or 6.3 cannot be
         satisfied at or prior to the date set forth in Section 9.1(a)(v) below;

                                       66
<PAGE>   72

                  (iv) by Buyer or Buyer Parent if there has been a material
         breach of any representation, warranty, covenant or agreement contained
         in this Agreement on the part of any Common Seller or the Preferred
         Seller and such breach has not been cured within 20 Business Days after
         written notice to the Seller Representative and the Preferred Seller
         (provided that no cure period shall be required for a breach which by
         its nature cannot be cured) such that the conditions set forth in
         Section 6.1 or 6.3 cannot be satisfied at or prior to the date set
         forth in Section 9.1(a)(v) below; and

                  (v) by Buyer Parent, the Company, the Seller Representative or
         the Preferred Seller if the Closing has not occurred on or before June
         30, 2001.

         Notwithstanding Section 9.1(a)(ii)-(v) hereof, a party who is or an
Affiliate of whom is in material breach of any of its obligations or
representations and warranties hereunder such that the conditions set forth in
Section 6.1, 6.2 or 6.3, as the case may be, cannot be satisfied at or prior to
the date set forth in Section 9.1(a)(v) above, shall not have the right to
terminate this Agreement pursuant to Section 9.1(a)(ii)-(v).

         (b) The termination of this Agreement shall be effectuated by the
delivery by the party terminating this Agreement to each other party of a
written notice of such termination. If this Agreement so terminates, it shall
become null and void and have no further force or effect, except as provided in
Section 9.2.

         Section 9.2 Survival After Termination. If this Agreement is terminated
in accordance with Section 9.1 hereof and the transactions contemplated hereby
are not consummated, this Agreement shall become void and of no further force
and effect, except for the provisions of 5.8, 5.11 and this Section 9.2. None of
the parties hereto shall have any liability in the event of a termination of
this Agreement, except to the extent that such termination results from the
breach, non-performance or violation by such party of any of its obligations
under this Agreement or the failure of such party to use best efforts to fulfill
such obligations, in which case such party shall remain liable to the other
parties hereunder for any Loss suffered or incurred by such other parties as a
result of or arising from such breach, non-performance or violation or the
termination of this Agreement.

                                       67
<PAGE>   73

                                    ARTICLE X
                                  MISCELLANEOUS

         Section 10.1 Amendments; Extension; Waiver. This Agreement may not be
amended, altered or modified except by written instrument executed by each of
the parties. The failure by any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver of any
such provision nor in any way to affect the validity of this Agreement or any
part hereof or the right of such party thereafter to enforce each and every such
provision. No waiver of any breach of or non-compliance with this Agreement
shall be held to be a waiver of any other or subsequent breach or
non-compliance. Any waiver made by the Company in connection with this Agreement
shall not be valid unless agreed to in writing by the Seller Representative and
the Preferred Seller.

         Section 10.2 Entire Agreement. This Agreement (including the Company
Disclosure Memorandum, certificates and lists referred to herein, and any
documents executed by the parties simultaneously herewith or pursuant thereto)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, except as provided herein, and supersedes all prior
agreements and understandings, written and oral, among the parties with respect
to the subject matter hereof. Each of the parties hereto agrees that it has not
entered into any agreement or understanding written or oral with respect to the
purchase and sale of shares of Capital Stock, except for this Agreement and
written agreements which have been provided to each of the parties hereto on or
prior to the date hereof.

         Section 10.3 Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Annexes, such reference shall be to a Section of or
Exhibit or Annex to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The phrases "the date of this Agreement," "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to the date set forth in the first paragraph of this Agreement.

         Section 10.4 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.

                                       68
<PAGE>   74

         Section 10.5 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered in person, by
telecopy (with written confirmation), by certified or registered mail (return
receipt requested) or by an express courier (with written confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

If to the Company, the Common Sellers or the Seller Representative:

                  National Asset Management Corporation
                  400 West Market Street, Suite 2500
                  Louisville, KY 40202
                  Telecopy:   (502) 581-3636
                  Attention:  Carl W. Hafele

If to the Preferred Seller:

                  National City Corporation
                  1900 East Ninth Street
                  Cleveland, OH 44114
                  Telecopy:   (216) 575-2336
                  Attention:  General Counsel

With copies to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036
                  Telecopy:   (212) 735-2000
                  Attention:  Ralph Arditi, Esq.

If to Buyer or Buyer Parent:

                  AMVESCAP PLC
                  11 Devonshire Square
                  London EC2 M4YR
                  United Kingdom
                  Attention:  Company Secretary

                                       69
<PAGE>   75

With copies to:

                  AMVESCAP
                  1315 Peachtree Street, NE
                  Suite 500 Atlanta, GA 30309
                  Telecopy:   (404) 724-4280
                  Attention:  Neil Williams, Esq.

                  Alston & Bird LLP
                  1201 W. Peachtree Street
                  Atlanta, GA 30309
                  Telecopy:   (404) 881-7777
                  Attention:  Sidney J. Nurkin, Esq.

         Section 10.6 Binding Effect; Persons Benefiting; Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing in this Agreement
is intended or shall be construed to confer upon any entity or person other than
the parties hereto and their respective successors and permitted assigns any
right, remedy or claim under or by reason of their Agreement or any part hereof.
No party to this Agreement may assign its rights and obligations hereunder
without the consent of any other party; provided, however that without the
consent of any Person, Buyer may assign its rights and obligations to a wholly
owned subsidiary of Buyer Parent. No assignment of this Agreement or any rights
herein by any party shall relieve such party of his, her or its obligations
hereunder, including particularly, but without limitation, such party's
obligations under Article VII hereof.

         Section 10.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same agreement, it being understood
that all of the parties need not sign the same counterpart.

         Section 10.8 Governing Law. THIS AGREEMENT, THE LEGAL RELATIONS BETWEEN
THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED
BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO APPLICABLE CONFLICT OF LAW PROVISIONS
THEREOF.

                                       70
<PAGE>   76

         Section 10.9 Specific Performance. The Company, the Sellers, Buyer and
Buyer Parent each acknowledge that, in view of the uniqueness of the Business
and the transactions contemplated by this Agreement, each party would not have
an adequate remedy at law for money damages in the event that the covenants to
be performed after the Effective Time have not been performed in accordance with
their terms, and therefore agree that the other parties shall be entitled to
specific enforcement of the terms hereof and any other equitable remedy to which
such parties may be entitled.

         Section 10.10 Waiver of Jury Trial and Punitive Damages. The parties to
this Agreement agree to waive any right to a jury trial as to all disputes and
any right to seek punitive damages in each case as related to the enforcement of
this Agreement.

         Section 10.11 Seller Representative.

         (a) Each Common Seller, for himself and his respective heirs,
executors, administrator, successors and assigns, hereby irrevocably appoints
Carl W. Hafele (the "Seller Representative") as such Common Seller's agent and
attorney-in-fact, authorizing him to act on behalf of such Common Seller to
supervise the Closing on behalf of Common Seller, to execute and deliver any
instruments of transfer or other documents required of such Common Seller and
receive documents required of Buyers at the Closing, to take any other action on
the part of such Common Seller permitted or required by this Agreement, and to
administer on behalf of such Common Seller all other matters related hereto, as
contemplated by this Agreement; provided that the Seller Representative may be
removed or replaced by Common Sellers owning more than 50% of the total number
of shares of Common Stock issued and outstanding immediately prior to the
Closing. Each such Common Seller acknowledges that the appointment of the Seller
Representative herein made is coupled with an interest and may not be revoked.
The Seller Representative accepts his appointment and authorization to act as
attorney-in-fact and agent of the Common Sellers.

         (b) In furtherance of this appointment herein made, each Common Seller,
fully and without restriction: (i) agrees to be bound by all notices received
and agreements and determinations made by and documents executed and delivered
by the Seller Representative under this Agreement; (ii) authorizes the Seller
Representative to (A) dispute or refrain from disputing any Claim made by either
Buyer under this Agreement; (B) negotiate and compromise any dispute relating to
such Common Seller which may arise under this Agreement, (C) exercise or refrain
from exercising any remedies available to the Common Seller under this
Agreement;

                                       71
<PAGE>   77

(D) sign any releases or other documents on behalf of such Common Seller with
respect to any such dispute or remedy; (E) waive any condition contained in this
Agreement; (F) give such instructions and do such other things and refrain from
doing such other things as the Seller Representative in his sole discretion
deems necessary or appropriate to carry out the provisions of this Agreement;
and (G) retain such counsel, accountants and other professional advisors as the
Seller Representative reasonably deems necessary to assist him in the
performance of his duties hereunder and pay the fees, costs and expenses thereof
out of funds coming into the hands of the Seller Representative. Each of the
Common Sellers agrees that it will contribute pro rata (based on each Common
Seller's share of the aggregate Merger Consideration paid to such Common Seller
under Article II) such amounts as are requested by the Seller Representative as
necessary for the Seller Representative to perform its duties under this
Agreement as soon as practicable following such request (but in no case later
than fifteen (15) days thereafter).

         (c) In the event of the death, incapacity or resignation of the Seller
Representative, within fifteen (15) days of such death, incapacity or
resignation, Common Sellers owning more than 50% of the total number of shares
of Common Stock issued and outstanding immediately prior to the Closing (with
such total number of shares reduced by any shares owned by the Seller
Representative) shall elect a successor from among the Common Sellers and who
shall agree in writing to accept such appointment. The decisions and actions of
any successor Seller Representative shall be, for all purposes, those of a
Seller Representative as if originally named herein.

         (d) The death or incapacity of any Common Seller shall not terminate
the authority and agency of the Seller Representative.

         (e) Buyer and Buyer Parent shall be entitled to rely exclusively upon
any communication given or other action taken by the Seller Representative
pursuant hereto and shall not be liable for any action taken or not taken in
reliance upon the Seller Representative. Buyer and Buyer Parent shall not be
obligated to inquire as to the authority of the Seller Representative with
respect to the taking of any action that the Seller Representative takes or
purports to take on behalf of any Common Seller.

                                       72
<PAGE>   78

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                  NATIONAL ASSET MANAGEMENT
                                  CORPORATION
                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  AMVESCAP PLC
                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  AVZ, INC.
                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  COMMON SELLERS:

                                  ----------------------------------------------
                                  Carl W. Hafele

                                  ----------------------------------------------
                                  John W. Ferreby

                                  ----------------------------------------------
                                  David B. Hiller

                                  ----------------------------------------------
                                  William F. Chandler

                               [Merger Agreement]

                                       73
<PAGE>   79

                                  ----------------------------------------------
                                  Stephen G. Mullins

                                  ----------------------------------------------
                                  Michael C. Heyman

                                  ----------------------------------------------
                                  Larry J. Walker

                                  ----------------------------------------------
                                  Randall T. Zipfel

                                  ----------------------------------------------
                                  David B. Chick

                                  ----------------------------------------------
                                  Catherine R. Stodghill

                                  ----------------------------------------------
                                  Erik N. Evans

                                  ----------------------------------------------
                                  Brent A. Bell

                                  ----------------------------------------------
                                  Matthew G. Bevin

                                  Mullins One LLC
                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  Walker One LLC
                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                               [Merger Agreement]

                                       74
<PAGE>   80

                                  Hafele One LLC

                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  Zipfel One LLC

                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  PREFERRED SELLER:

                                  NATIONAL CITY CORPORATION

                                  By:
                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                           -------------------------------------

                                  OPTION HOLDER:

                                  ----------------------------------------------
                                  Mark W. Lattis

                               [Merger Agreement]

                                       75
<PAGE>   81

                                     ANNEX A

                                   Definitions

         "Adjusted Closing Assets Under Management" shall mean, for any Client
included in the Closing Revenue Run-Rate, the amount of assets under management
by the Company for such Client as of the Base Date, as adjusted, (a) to reflect
net cash flows (additions, withdrawals and reinvestment of distributions), new
accounts and terminated accounts for the period beginning immediately after the
Base Date and ending on the last day of the calendar month ending immediately
prior to the Closing Date and (b) to exclude all assets of the Preferred Seller
held in Separate Accounts and any Registered Funds sponsored by the Preferred
Seller to which the Company acts as adviser or subadviser.

         "Adjusted Closing Revenue Run-Rate" shall equal the sum of (a) Forty
Four Million Eight Hundred Fifty Thousand Dollars ($44,850,000) less (b) the
annualized revenues, as of the Base Date, attributable to any fixed income
assets managed by the Company (other than the equity portion of any balanced
account managed by the Company), plus (c) the amount by which the Closing
Revenue Run-Rate is greater than Forty Eight Million Three Hundred Thousand
Dollars ($48,300,000) and less (d) the amount by which the Closing Revenue
Run-Rate is less than Forty Three Million Seven Hundred Thousand Dollars
($43,700,000).

         "Adjusted Common Stock Cash Consideration" has the meaning set forth in
Section 2.3(a).

         "Adjusted Earn-Out Assets Under Management" shall mean, for any Client
included in the Earn-Out Revenue Run-Rate, the amount of assets under management
by the Company for such Client on the last day of any Yearly Period, as
adjusted:

                  (a) to include (i) any assets under management of the Company
         attributable to client mandates that are established or expanded after
         the date of this Agreement that have been sourced, developed or
         obtained through the efforts of USIG, (ii) any assets under management
         attributable to client mandates of Buyer Parent or one of its
         Affiliates that are existing as of the date of this Agreement that are
         transferred in whole or in part to the Company and (iii) any assets
         under management of the Company attributable to client mandates that
         are established or expanded after the date of this

                                       A-1
<PAGE>   82

Agreement that have been sourced, developed or obtained through the efforts of
a business unit of Buyer Parent other than USIG;

         (b) to exclude all fixed income assets managed by the Company (but
including the equity portion of any balanced account);

         (c) to include any assets subject to new investment management,
advisory or sub-advisory agreements that are sold by USIG after the Effective
Time, whether or not such assets are managed by the Company or any employees of
the Company and whether or not such assets are in a separate account, pooled
investment vehicle or wrap account, where such assets are to be managed in a
U.S. growth equity or U.S. core equity style which is substantially similar to
the management style presently employed by the Company; and

         (d) to include only those assets of the Preferred Seller held in
Registered Funds sponsored by the Preferred Seller.

         "Adjusted Merger Consideration" means (i) Two Hundred Million
($200,000,000) Dollars, less (ii) an amount equal to five (5) times the amount
by which the Closing Revenue-Run Rate is less than Forty Three Million Seven
Hundred Thousand ($43,700,000) Dollars, or plus (iii) an amount equal to five
(5) times the amount by which the Closing Revenue Run Rate is greater than Forty
Eight Million Three Hundred Thousand ($48,300,000) Dollars, and less (iv) the
amount by which Net Capital as shown on the Estimated Closing Balance Sheet and
the Closing Schedule is less than $5,335,000 (a "Net Capital Shortfall") or plus
(v) the amount by which Net Capital as shown on the Estimated Closing Balance
Sheet and the Closing Schedule is greater than $5,335,000 (a "Net Capital
Excess").

         "Advisers Act" shall mean the Investment Advisers Act of 1940, as
amended, and the rules and regulations of the SEC thereunder.

         "Affiliate" shall mean any Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, the person specified.

         "Affiliated Group" means any combined, consolidated or unitary tax
group within the meaning of Code Section 1504(a) or any similar provision of
state, local or foreign laws applicable to Taxes.

                                       A-2
<PAGE>   83

         "Aggregate Common Contingent Consideration" shall mean the Contingent
Consideration less the Aggregate Preferred Contingent Consideration.

         "Aggregate Preferred Contingent Consideration" has the meaning set
forth in Section 2.7(b)(i).

         "Agreement" shall mean this Agreement (including the Company Disclosure
Memorandum or any annex or exhibit hereto) among the Sellers, the Company and
the Buyers, as such may hereafter be amended.

         "Annual Cash Contingent Payment" shall mean, with respect to any Yearly
period, the amount of the Annual Contingent Cash Consideration payable pursuant
to Section 2.7(a).

         "Annual Contingent Cash Consideration" shall mean $15,000,000 in cash.

         "Annual Contingent Equity Consideration" shall mean a number of shares
of Parent Stock equal to the quotient of (i) $10,000,000 divided by (ii) the
Contingent Consideration Stock Price.

         "Annual Contingent Payment" shall mean the sum of the Annual Cash
Contingent Payment and the Annual Equity Contingent Payment.

         "Annual Equity Contingent Payment" shall mean, with respect to any
Yearly Period, the amount of the Annual Contingent Equity Consideration payable
pursuant to Section 2.7(a).

         "Annual Preferred Contingent Cash Consideration" has the meaning set
forth in Section 2.7(b)(i).

         "Annual Preferred Contingent Equity Consideration" has the meaning set
forth in Section 2.7(b)(i).

         "Applicable Law" shall mean any domestic or foreign federal, state or
local statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment or decree applicable to the
Sellers, the Company, Buyer, Buyer Parent or any of their respective Affiliates,
properties, assets, officers, directors or employees, as the case may be.

                                       A-3

<PAGE>   84

         "Asset Management Fees" shall mean all revenues of the Company derived
from its investment management and advisory activities including (a) base
management fees based solely on the amount of assets under management and (b)
fixed fee arrangements but excluding, in the case of (a) and (b), any consulting
fee, performance fee, incentive fee or carried interest or similar fee or
arrangement to the extent dependent upon the performance of assets under
management.

         "Base Date" shall mean December 31, 2000.

         "Base Revenue Run-Rate" shall be equal to $43,700,000.

         "Base Shares" shall be equal to the number of shares of Parent Stock
determined by dividing fifty percent (50%) of the Adjusted Merger Consideration
(a) plus fifty percent (50%) of the amount of a Net Capital Shortfall, if any,
or (b) less fifty percent (50%) of the amount of a Net Capital Excess, if any,
by the Signing Stock Price.

         "Business" shall mean the business of the Company in rendering
investment advisory, investment management, consulting, administrative, and
related services for compensation.

         "Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banks in the State of New York or the City of London are generally
closed for regular banking business.

         "Buyer" has the meaning set forth in the preamble to this Agreement and
includes any permitted direct or indirect successor or assign.

         "Buyer Material Adverse Effect" shall mean any matter or matters
affecting Buyer, Buyer Parent or any of their Affiliates that has or have a
material adverse effect on the business, assets, financial condition or results
of operations of such entities taken as a whole or on the ability of the Buyers
to complete the Closing; provided that a decline in the value of assets under
management by such entities resulting from currency fluctuations or a general
decline in securities prices and any consequences thereof will be excluded from
any determination as to the occurrence of a Buyer Material Adverse Effect.

         "Buyer Parent" has the meaning set forth in the preamble to this
Agreement and includes any permitted direct or indirect successor or assign.

                                      A-4
<PAGE>   85

         "Buyer Parent Report" has the meaning set forth in Section 4.8.

         "Capital Stock" shall mean the Preferred Stock and Common Stock.

         "Cash Merger Consideration" shall mean fifty percent (50%) of the
Adjusted Merger Consideration (a) less fifty percent (50%) of the amount of a
Net Capital Shortfall, if any or (b) plus fifty percent (50%) of the amount of a
Net Capital Excess, if any.

         "Client" shall mean any client to which the Company provides investment
advisory, investment management, consulting, administrative and related services
as of a particular date, including, without limitation, any Registered Fund.

         "Closing" has the meaning set forth in Section 2.8.

         "Closing Date" has the meaning set forth in Section 2.8.

         "Closing Revenue Run-Rate" shall mean the aggregate annualized fees
payable to the Company for investment advisory services under Investment
Management Agreements for all Clients of the Company in effect on the last day
of the calendar month ending immediately prior to the Closing Date (excluding
any portion thereof attributable to the accounts of Clients of the Company on
the Base Date who do not Consent in accordance with Section 5.3 hereof to the
assignment or deemed assignment of their respective Investment Management
Agreements resulting from the transactions contemplated hereby), calculated by
multiplying the Adjusted Closing Assets Under Management by the applicable
annual fee rate for each Account included in Adjusted Closing Assets Under
Management. The calculation of the Closing Revenue Run-Rate shall exclude from
revenue any performance-based fees and shall include only net revenues to the
Company giving effect to, and taking into account, any fee waivers, caps or
expense limitations, or expense reimbursement, and any unreimbursed payments by
the Company to any brokers, dealers or other Persons with respect to the
distribution of shares of the Registered Fund Clients or services provided to
Registered Fund Client shareholders pursuant to any distribution or shareholder
services agreements, and any such revenues shall be servicing fees payable by
the Company.

         "Closing Schedule" has the meaning set forth in Section 2.9.

         "Closing Shares" shall be equal to the number of shares of Parent Stock
determined by dividing fifty percent (50%) of the Adjusted Merger Consideration
(a)

                                      A-5
<PAGE>   86

plus fifty percent (50%) of the amount of a Net Capital Shortfall, if any, or
(b) less fifty percent (50%) of the amount of such a Net Capital Excess, if any,
by the Closing Stock Price.

         "Closing Stock Price" shall mean, in respect of a share of Parent
Stock, the quotient obtained by dividing (a) the aggregate of the Daily Value of
Trades for each day during the period of 10 consecutive trading days immediately
preceding the Closing Date by (b) the aggregate volume of shares of Parent Stock
used to calculate such Daily Value of Trades.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Common Seller" has the meaning set forth in the preamble to this
Agreement.

         "Common Seller Participation Percentage" shall mean, with respect to
any Common Seller, the quotient, expressed as a percentage, of (a) the number of
shares of Common Stock owned by such Common Seller at the Effective Time and (b)
the total number of shares of Common Stock issued and outstanding immediately
prior to the Effective Time.

         "Common Stock" shall mean the common stock, no par value, of the
Company.

         "Common Stock Cash Consideration" shall mean the amount equal to the
Per Share Cash Consideration multiplied by the number of shares of Common Stock
issued and outstanding immediately prior to the Closing.

         "Common Stock Equity Consideration" shall mean the number of shares of
Parent Stock equal to the Per Share Equity Consideration multiplied by the
number of shares of Common Stock issued and outstanding immediately prior to the
Closing.

         "Companies Act" shall mean the Companies Act 1985, as amended, and all
rules, regulations and statutory instruments thereunder.

         "Company" shall mean, prior to the Effective Time, National Asset
Management Corporation, and thereafter, the Surviving Corporation and any
Affiliate of the Surviving Corporation to which substantially all of the assets
and liabilities of the Company may be transferred or assigned after the
Effective Time.

                                      A-6
<PAGE>   87

         "Company Disclosure Memorandum" shall mean the memorandum prepared by
the Company and delivered to the Buyers contemporaneously with the execution and
delivery of this Agreement and setting forth items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement
contained in, or as an exception to, a representation and warranty by any
Sellers herein.

         "Company Facility" means any improved real property owned or leased by
the Company and on which the business of the Company is or has been conducted.

         "Company Intellectual Property" has the meaning set forth in Section
3.16(c).

         "Company Material Adverse Effect" shall mean any matter or matters
affecting the Company that has or have a material adverse effect on the
business, assets, financial condition or results of operations of the Company
taken as a whole or on the ability of the Company to complete the Closing;
provided that (a) a decline in the value of assets under management by the
Company resulting from currency fluctuations or a general decline in securities
prices and any consequences thereof will be excluded from any determination as
to the occurrence of a Company Material Adverse Effect and (b) a reduction in
the Revenue Run-Rate between the Base Date and the Closing Date in and of
itself, shall not constitute a Company Material Adverse Effect.

         "Company Related Party" means any corporation in which at least fifty
percent (50%) of the total combined voting power of all classes of stock
entitled to vote or at least fifty percent (50%) of the value of all classes of
stock is or was owned directly or indirectly by the Company.

         "Confidentiality Agreement" shall mean that certain letter agreement
dated as of November 3, 2000 relating to confidential information provided by
the Company to Buyer and its Affiliates.

         "Consent" shall mean any and all filings, consents or approvals
(including negative consents), whether from a regulatory authority or other
third party, that are necessary in connection with (i) the execution and
delivery by the Company, the Sellers and the Buyers of this Agreement and (ii)
the consummation by the Company, the Sellers and the Buyers of the transactions
contemplated hereby.

         "Contingent Cash Consideration" shall mean the aggregate amounts
payable in cash as provided in Section 2.7(a).

                                      A-7
<PAGE>   88

         "Contingent Consideration" shall mean the sum of the Contingent Cash
Consideration and the Contingent Equity Consideration.

         "Contingent Consideration Stock Price" shall mean, in respect of a
share of Parent Stock, the quotient obtained by dividing (a) the aggregate of
the Daily Value of Trades for each day during the period of 20 consecutive
trading days immediately preceding the date of this Agreement; by (b) the
aggregate volume of shares of Parent Stock used to calculate such Daily Value of
Trades.

         "Contingent Equity Consideration" shall mean the aggregate number of
shares of Parent Stock issuable as provided in Section 2.7(a).

         "Contingent Payment Statement" has the meaning set forth in Section
2.7(c)(i).

         "Contingent Percentage" shall mean, with respect a Yearly Period, (a)
the Yearly Period CAGR for such Yearly Period less 15%, divided by (b) 25%.

         "Contract" means, with respect to any Person, any agreement, indenture,
undertaking, debt instrument, contract, guarantee, loan, note, mortgage,
arrangement, license, lease or other commitment, whether written or oral, to
which such Person or any of its Subsidiaries is a party or by which any of them
is bound or to which any of their assets or properties is subject.

         "Daily Value of Trades" shall mean, in respect of the shares of Parent
Stock on any trading day, the United States Dollar Equivalent of the product of
(a) the volume weighted average price of shares of Parent Stock on the LSE (or,
if the shares of Parent Stock are not then listed on the LSE, on such other
stock exchange or automated quotation system on which the shares of Parent Stock
are listed or quoted, as the case may be, as may be selected by the board of
directors of Buyer Parent for such purpose) on such date, as determined by
Bloomberg L.P. or other reputable, third party information source selected by
the board of directors of Buyer Parent and (b) the aggregate volume of shares of
Parent Stock traded on such date on the LSE or such other stock exchange or
automated quotation system and used to calculate such volume weighted average
price; provided that any such selections by the board of directors of Buyer
Parent shall be conclusive and binding.

         "DGCL" shall mean the General Corporation Law of the State of Delaware.

                                      A-8
<PAGE>   89

         "Distribution Agreements" shall mean all agreements or arrangements for
the sale or distribution of shares of any Registered Fund pursuant to Rule 12b-1
of the Investment Company Act.

         "Earn-Out Revenue Run-Rate" shall mean, with respect to any Yearly
Period, the aggregate annualized fees payable to the Company for investment
advisory and subadvisory services under Investment Management Agreements for all
Clients of the Company in effect on the last day of such Yearly Period,
calculated by multiplying the Adjusted Earn-Out Assets Under Management for that
Yearly Period by the applicable annual fee rate for each account included in
Adjusted Earn-Out Assets Under Management; provided, that, for purposes of the
Earn-Out Revenue Run-Rate, the aggregate annualized fees for the assets under
management described in clauses (a)(ii) and (iii) of the definition of "Adjusted
Earn-Out Assets Under Management" shall be equal to 40% of the amount of such
annualized fees for such Yearly Period. The calculation of the Earn-Out Revenue
Run-Rate shall exclude from revenue any performance-based fees and shall include
only net revenues to the Company giving effect to, and taking into account, any
fee waivers, caps or expense limitations, or expense reimbursement, and any
unreimbursed payments by the Company to any brokers, dealers or other Persons
with respect to the distribution of shares of the Registered Fund Clients or
services provided to Registered Fund Client shareholders pursuant to any
distribution or shareholder services agreements, and any such revenues shall be
servicing fees payable by the Company.

         "Effective Time" and "Effective Date" shall have the meanings set forth
in Section 2.2.

         "Employment Agreement" shall mean that certain employment agreement to
be entered into between each of the Common Sellers that is a natural person and
the Buyer concurrently with the execution of this Agreement

         "Encumbrance" shall mean any mortgage, pledge, hypothecation, rights of
others, claim, security interest, encumbrance, title defect, title retention
agreement, voting trust agreement, interest, equity, option, lien, charge,
easement encroachments or other conditions, commitments, restrictions or
limitations of any nature whatsoever.

         "Environmental Laws" shall mean all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental

                                      A-9
<PAGE>   90

Response, Compensation and Liability act, the Clean Water Act, the Federal Clean
Air Act, and the Occupational Safety and Health act, each as amended.

         "Equity Merger Consideration" shall equal the Closing Shares; provided
that if the Closing Shares are more than 110% of the Base Shares, the Equity
Merger Consideration shall be 110% of the Base Shares, and if the Closing Shares
are less than 90% of the Base Shares, the Equity Merger Consideration shall be
90% of the Base Shares.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the rules, regulations and class exemptions of the Department of
Labor thereunder.

         "ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, which together with the Company would be deemed a single employer
within the meaning of ERISA.

         "Estimated Closing Balance Sheet" has the meaning set forth in Section
2.9.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.

         "Filings" has the meaning set forth in Section 3.6.

         "Final Statement" has the meaning set forth in Section 2.9(b).

         "Financial Statements" has the meaning set forth in Section 3.8.

         "GAAP" shall mean generally accepted accounting principles as used in
the United States of America as in effect at the time any applicable financial
statements were prepared or any act requiring the application of GAAP was
performed.

         "Governmental Authority" shall mean any government, any state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including the SEC or any other government authority, agency, department, board,
commission or instrumentality of the United States, any State of the United
States or any political subdivision thereof, and any court, tribunal or
arbitrator(s) of competent jurisdiction, and any governmental or
non-governmental self-regulatory organization, agency or authority.

                                      A-10
<PAGE>   91

         "Hazardous Material" means (i) any hazardous substance, hazardous
material, hazardous waste, regulated or toxic substance (as those terms are
defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil, and also any
asbestos requiring abatement, removal, or encapsulation pursuant to the
requirements of Governmental Authorities and any polychlorinated biphenyls.

         "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.

         "IMRO" has the meaning set forth in Section 4.8.

         "Indebtedness", as applied to any Person, shall mean obligations
relating to capital leases, payments in respect of the deferred purchase price
of property, letters of credit, and amounts from time to time outstanding under
loan agreements and other agreements relating to the borrowing of money or
extension of credit.

         "Indemnifiable Claim" shall mean any Loss for which a Person is
entitled to indemnification under this Agreement.

         "Indemnified Party" shall mean the Person entitled to the benefits of
indemnification hereunder.

         "Indemnifying Party" shall mean the Person obligated to provide
indemnification hereunder.

         "Intellectual Property" shall mean all domestic and foreign letters
patent, software, know-how, trade names, common law and other trademarks and
service marks, copyrights, and all registrations or applications for
registration of any of the foregoing, and all inventions, processes, designs,
formulae, trade secrets, know-how, confidential information, data and
documentation, and all similar intellectual property rights, used in or
pertaining to the business of the Company.

         "Interim Advisory Contract" has the meaning set forth in Section
5.3(a).

         "Investment Company" means an investment company, as such term is
defined in the Investment Company Act, and any entity that, but for the
provision of Section 3(c) of such Act, would be an investment company under such
Act.

                                      A-11
<PAGE>   92

         "Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, and the rules and regulations of the SEC thereunder.

         "Investment Company Board" means the board of directors or trustees (or
Persons performing similar functions) of an Investment Company.

         "Investment Management Agreements" shall mean all agreements and
arrangements for the performance of investment advisory or investment management
services for Clients or on behalf of third parties.

         "IRS" shall mean the United States Internal Revenue Service.

         "KBCA" shall mean the Kentucky Business Corporation Act.

         "Lease" shall mean any agreement, whether written or oral, pursuant to
which the Company enjoys the right, as a lessee or sublessee, to use or occupy
any real or tangible personal property in the conduct of the business of the
Company.

         "Leasehold Improvements" shall mean all improvements to the leased
properties installed or constructed by or on behalf of the Company and used in
connection with the operation or maintenance of its offices.

         "LIBOR" means, with respect to any date of determination, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to such date for a term of one month. If for any reason such rate is
not available, the term "LIBOR" shall mean, with respect to any date of
determination, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to such date for a term of one month; provided, however,
if more than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.

         "Loss" shall mean any and all direct out-of-pocket losses, liabilities,
damages, judgments, awards, expenses for penalties, fines, costs and expenses
(including reasonable attorneys', accountants', experts' and consultants' fees
and expenses and court costs) that are imposed upon or otherwise incurred,
suffered or sustained by a Person; provided that Losses shall not include
foregone profits, damages arising from

                                      A-12
<PAGE>   93

alleged diminution of the value of a Person's business (including losses
calculated on multiples of earnings or book value) or any other consequential
damages.

         "LSE" means the London Stock Exchange.

         "Merger Consideration" shall mean the sum of the Preferred Stock Cash
Consideration, the Preferred Stock Equity Consideration, the Common Stock Cash
Consideration, and the Common Stock Equity Consideration.

         "NASD" shall mean the National Association of Securities Dealers, Inc.

         "Net Capital" shall mean as at any date the value of all tangible
assets existing on that date, less the amount of all liabilities existing on
that date calculated in the same manner as provided in Section 2.9 and as
reflected on the Estimated Closing Balance Sheet or the Final Statement, as the
case may be.

         "Net Capital Excess" has the meaning set forth in the defined term
"Adjusted Merger Consideration" in this Annex A.

         "Net Capital Shortfall" has the meaning set forth in the defined term
"Adjusted Merger Consideration" in this Annex A.

         "Notice" has the meaning set forth in Section 5.3(b).

         "Option" has the meaning set forth in Section 5.15.

         "Organizational Documents" shall mean the By-laws, Articles of
Incorporation and similar organizational documents of the Company, as amended
from time to time.

         "Parent Stock" shall mean the ordinary shares of AMVESCAP PLC with a
nominal value of 25 pence per share.

         "Per Share Cash Consideration" has the meaning set forth in Section
2.3(a)(ii).

         "Per Share Equity Consideration" has the meaning set forth in Section
2.3(a)(ii).

         "Permit" shall mean any approval, authorization, certificate, consent,
easement, filing, franchise, license, notice, permit, registration or right of
any Governmental Authority or any other Person to which any Person is a party or
that is

                                      A-13
<PAGE>   94

or may be binding upon or inure to the benefit of any Person or its securities,
assets or business.

         "Permitted Encumbrances" shall mean all Encumbrances which are:

                  (1) for Taxes or assessments that are not yet due and payable
         or which are being contested in good faith and by appropriate
         proceedings if reserves and/or deferred tax valuation allowances in
         amounts required by GAAP are maintained on the Company's books;

                  (2) Encumbrances or pledges to secure payments of workmen's
         compensation and other payments, unemployment and other insurance,
         old-age pensions or other social security obligations, or the
         performance of bids, tenders, leases, contracts, public or statutory
         obligations, surety, stay or appeal bonds, or other similar obligations
         arising in the ordinary course of business;

                  (3) workmen's, repairmen's, warehousemen's, vendors' or
         carriers' Encumbrances or other similar Encumbrances arising in the
         ordinary course of business and securing sums which are not past due,
         or deposits or pledges to obtain the release of any such Encumbrances;

                  (4) statutory landlords' Encumbrances under leases to which
         the Company is a party;

                  (5) any Encumbrance constituting a renewal, extension or
         replacement of an Encumbrance constituting a Permitted Encumbrance;

                  (6) leases or subleases granted to other Persons not
         materially interfering with the conduct of the Business;

                  (7) zoning restrictions, easements, rights of way, licenses
         and restrictions on the use of Real Property or minor irregularities in
         title thereto, which do not materially impair the use of such property
         in the normal operation of the Business or the value of such property
         for the purpose of such Business;

                  (8) statutory or common law Encumbrances (such as rights of
         set-off) on deposit accounts of the Company;

                                      A-14
<PAGE>   95

                  (9) Encumbrances set forth, described in or established by any
         agreement pursuant to which the Company has leased, licensed or
         obtained any other right to use any property of another Person;

                  (10) Encumbrances which do not materially impair the use,
         operation, value or marketability of the asset or property to which it
         relates; and

                  (11) Encumbrances disclosed in the Schedules hereto delivered
         in connection with the execution and delivery hereof or in the text
         accompanying the Financial Statements.

         "Person" shall mean any individual, corporation, company, partnership
(limited or general), joint venture, association, trust or other entity.

         "Plan" has the meaning set forth in Section 3.15.

         "Preferred Dividend Amount" shall equal (a) the amount of the unpaid
dividend due and payable with respect to the Preferred Stock pursuant to the
terms of such Preferred Stock in the Organizational Documents assuming, solely
for purposes of this calculation, that such Preferred Stock is being redeemed on
March 31, 2001 in accordance with its terms as set forth in such Organizational
Documents less (b) the amount of any dividends paid by the Company to the
Preferred Seller after the dividend due and payable on February 15, 2001.

         "Preferred Participation Percentage" shall mean 25%.

         "Preferred Seller" has the meaning set forth in the preamble to this
Agreement.

         "Preferred Stock" shall mean the Class A preferred stock, no par value,
of the Company.

         "Preferred Stock Cash Consideration" has the meaning set forth in
Section 2.3(a)(i).

         "Preferred Stock Equity Consideration" has the meaning set forth in
Section 2.3(a)(ii).

                                      A-15
<PAGE>   96

         "Prior Purchase Agreement" shall mean the Agreement for Purchase and
Sale of Common Stock, dated March 6, 1998, among the Preferred Seller, the
Company and certain other individuals.

         "Real Property" shall mean all real property, appurtenances thereto,
fixtures and improvements, rights in connection therewith, or any interest
therein, including, without limitation, leasehold estates.

         "Registered Fund" means an Investment Company registered under the
Investment Company Act that is advised or subadvised by the Company.

         "Rights" means, with respect to any Person, all arrangements,
commitments, agreements, securities or obligations convertible into or
exercisable or exchangeable for, or giving any person any right to subscribe for
or acquire, or any options, calls or commitments relating to, directly or
indirectly, capital and/or voting securities of such Person, or any stock
appreciation right or other instrument the value of which is determined in whole
or in part by reference to the market price or value of, shares of capital stock
of such Person or other.

         "SEC" shall mean the United States Securities and Exchange Commission.

         "Securities Act" shall mean the Securities Act of 1933, as amended.

         "Sellers" has the meaning set forth in the preamble to this Agreement.

         "Seller Representative" has the meaning set forth in Section 10.11.

         "Separate Accounts" shall mean all Clients other than the Registered
Funds and wrap accounts of the Company's Managed Accounts Group.

         "Services Agreements" shall mean all agreements and arrangements for
the performance of administrative services, custodial services, transfer agency
services, portfolio accounting services and shareholder services for a
Registered Fund.

         "Signing Stock Price" shall mean, in respect of a share of Parent
Stock, the quotient obtained by dividing (a) the aggregate of the Daily Value of
Trades for each day during the period of 10 consecutive trading days immediately
preceding the date of this Agreement by (b) the aggregate volume of shares of
Parent Stock used to calculate such Daily Value of Trades.

                                      A-16
<PAGE>   97

         "Software" shall mean all of the rights of the Company in any and all
computer programs consisting of sets of statements or instructions to be used
directly or indirectly in a computer, including all source code and object code
therefor, whether recorded on paper, magnetic media or other electronic or
non-electronic device, and all documentation, including, without limitation,
user manuals and training materials, relating to any of the foregoing.

         "Subsidiary" shall mean any corporation, partnership (general or
limited), limited liability corporation or other form of business entity of
which more than one-half of either the voting power or economic is owned,
directly or indirectly, by the Company.

         "Surviving Corporation" shall have the meaning set forth in section
2.1(a).

         "Tax" or "Taxes" shall mean any federal, state, county, local, or
foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposes or required to be withheld by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, including any interest, penalties, and additions
imposed thereon or with respect thereto.

         "Tax Return" shall mean any report, return, information return, or
other information required to be supplied to a Governmental Authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes the Company and any amendments thereof.

         "Taxing Authority" shall mean the IRS and any other domestic or foreign
Governmental Authority responsible for the administration of any Taxes.

         "Technology Systems" has the meaning set forth in Section 3.16(a).

         "Third Party Claim" has the meaning set forth in Section 7.5(b).

         "Title IV Plan" has the meaning set forth in Section 3.14(c).

                                      A-17
<PAGE>   98

         "12b-1 Plan" has the meaning set forth in Section 3.6(c)

         "United States Dollar Equivalent" means in respect of an amount
expressed in the currency other than United States dollars (the "Foreign
Currency Amount") at any date the product obtained by multiplying: (a) the
Foreign Currency Amount by (b) the noon spot exchange rate on such date for such
foreign currency expressed in United States dollars as reported by Citibank or,
in the event such spot exchange rate is not available, such spot exchange rate
on such date for such foreign currency expressed in United States dollars as may
be deemed by the board of directors of Buyer Parent to be appropriate for such
purpose.

         "USIG" shall mean the U.S. institutional group business unit of Buyer
Parent and any other business unit of Buyer Parent which succeeds, in whole or
in part, to the business of such U.S. institutional group business unit.

         "Wire Transfer" shall mean a payment in immediately available funds by
wire transfer in lawful money of the United States of America to such account or
accounts as shall have been designated by notice to the paying party.

         "Yearly Period" shall mean the twelve-month period beginning on the day
immediately following the last day of the calendar month ending immediately
prior to the Closing Date and each of the next two succeeding twelve-month
periods.

         "Yearly Period CAGR" shall mean, with respect to a Yearly Period, the
annual compounded growth rate in the Earn-Out Revenue Run-Rate over the Adjusted
Closing Revenue Run-Rate. For purposes of calculating the Yearly Period CAGR,
the following formula shall be utilized: ([Nth root of (Earn-Out Revenue
Run-Rate for year N/Adjusted Closing Revenue Run-Rate)] - 1), whereby N shall
equal the respective Yearly Period and shall be either 1, 2 or 3.

                                      A-18

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