10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-13908

Invesco Ltd.

(Exact Name of Registrant as Specified in Its Charter)

Bermuda	98-0557567
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
1555 Peachtree Street, N.E., Suite 1800, Atlanta, GA (Address of Principal Executive Offices)	30309 (Zip Code)

Registrant’s telephone number, including area code: (404) 892-0896
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Exchange on Which Registered
Common Shares, $0.20 par value per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ  Accelerated filer o  Non-accelerated filer   o
(Do not check if a smaller reporting company) Smaller reporting company o 

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No þ

     As of September 30, 2009, the most recent practicable date, 428,778,213 of the company’s common shares, par value $0.20 per share, were outstanding.

TABLE OF CONTENTS

     We include cross references to captions elsewhere in this Quarterly Report on Form 10-Q, which we refer to as this “Report,” where you can find related additional information. The following table of contents tells you where to find these captions.

	Page
PART I — Financial Information
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets		3
Condensed Consolidated Statements of Income		4
Condensed Consolidated Statements of Cash Flows		5
Condensed Consolidated Statements of Changes in Equity		6
Notes to the Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		36
Item 3. Quantitative and Qualitative Disclosures about Market Risk		64
Item 4. Controls and Procedures		65
PART II — Other Information
Item 1. Legal Proceedings		66
Item 1A. Risk Factors		66
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		66
Item 3. Defaults upon Senior Securities		67
Item 4. Submission of Matters to a Vote of Security Holders		67
Item 6. Exhibits		68
Signatures		69
EX-10.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

2

Item 1. Financial Statements

Invesco Ltd.

Condensed Consolidated Balance Sheets
(Unaudited)

	As of
	September 30,			December 31,
$ in millions	2009			2008
ASSETS
Current assets:
Cash and cash equivalents		923.8			585.2
Cash and cash equivalents of consolidated investment products		38.3			73.0
Unsettled fund receivables		505.8			303.7
Accounts receivable		299.9			239.3
Investments		174.2			123.6
Prepaid assets		59.6			55.6
Other current assets		68.7			72.2
Deferred tax asset, net		51.1			86.1
Assets held for policyholders		1,190.4			840.2
Total current assets		3,311.8			2,378.9
Non-current assets:
Investments		136.9			121.3
Investments of consolidated investment products		662.2			843.8
Prepaid assets		21.3			36.3
Deferred sales commissions		20.6			24.5
Deferred tax asset, net		66.6			37.2
Property and equipment, net		209.2			205.3
Intangible assets, net		142.3			142.8
Goodwill		6,378.7			5,966.8
Total non-current assets		7,637.8			7,378.0
Total assets		10,949.6			9,756.9
Current liabilities:
Current maturities of long-term debt		294.2			297.2
Unsettled fund payables		489.7			288.3
Income taxes payable		72.1			37.9
Other current liabilities		506.3			639.8
Policyholder payables		1,190.4			840.2
Total current liabilities		2,552.7			2,103.4
Non-current liabilities:
Long-term debt		745.7			862.0
Other non-current liabilities		227.0			195.3
Total non-current liabilities		972.7			1,057.3
Total liabilities		3,525.4			3,160.7
Commitments and contingencies (See Note 12)
Equity:
Equity attributable to common shareholders:
Common shares ($0.20 par value; 1,050.0 million authorized; 459.5 million and 426.6 million shares issued as of September 30, 2009, and December 31, 2008, respectively)		91.9			85.3
Additional paid-in-capital		5,705.0			5,352.6
Treasury shares		(971.9	)		(1,128.9	)
Retained earnings		1,565.2			1,476.3
Accumulated other comprehensive income/(loss), net of tax		336.4			(95.8	)
Total equity attributable to common shareholders		6,726.6			5,689.5
Equity attributable to noncontrolling interests in consolidated entities		697.6			906.7
Total equity		7,424.2			6,596.2
Total liabilities and equity		10,949.6			9,756.9

See accompanying notes.

3

Invesco Ltd.

Condensed Consolidated Statements of Income
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
$ in millions	2009			2008			2009			2008
Operating revenues:
Investment management fees		570.3			664.9			1,508.4			2,139.3
Service and distribution fees		111.8			129.4			301.2			411.1
Performance fees		4.3			18.1			23.2			51.3
Other		19.4			14.8			46.7			71.5
Total operating revenues		705.8			827.2			1,879.5			2,673.2
Operating expenses:
Employee compensation		238.9			264.1			703.7			819.8
Third-party distribution, service and advisory		183.5			220.9			498.0			712.9
Marketing		27.7			34.8			78.5			116.9
Property, office and technology		63.0			50.5			157.5			156.3
General and administrative		41.1			61.7			118.0			204.0
Total operating expenses		554.2			632.0			1,555.7			2,009.9
Operating income		151.6			195.2			323.8			663.3
Other income/(expense):
Equity in earnings of unconsolidated affiliates		7.9			8.0			17.9			35.5
Interest income		1.7			8.0			7.7			30.0
Gains/(losses) of consolidated investment products, net		2.1			2.8			(132.8	)		(1.2	)
Interest expense		(16.9	)		(18.3	)		(49.3	)		(59.1	)
Other gains and losses, net		2.0			(10.4	)		7.8			(18.0	)
Income before income taxes, including gains and losses attributable to noncontrolling interests		148.4			185.3			175.1			650.5
Income tax provision		(43.7	)		(49.2	)		(100.0	)		(200.2	)
Net income, including gains and losses attributable to noncontrolling interests		104.7			136.1			75.1			450.3
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net		0.5			(4.3	)		136.5			(0.5	)
Net income attributable to common shareholders		105.2			131.8			211.6			449.8
Earnings per share:
— basic	$	0.24		$	0.34		$	0.51		$	1.15
— diluted	$	0.24		$	0.33		$	0.51		$	1.12
Dividends declared per share	$	0.1025		$	0.10		$	0.3050		$	0.42

See accompanying notes.

4

Invesco Ltd.

Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Nine months ended September 30,
$ in millions	2009			2008
Operating activities:
Net income, including gains and losses attributable to noncontrolling interests		75.1			450.3
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation		52.7			50.4
Share-based compensation expense		68.1			89.7
Gain on disposal of property, equipment, software, net		(1.2	)		(2.0	)
Purchase of trading investments		(41.9	)		(22.9	)
Sale of trading investments		13.1			23.4
Other gains and losses, net		(7.8	)		18.0
(Gains)/losses of consolidated investment products, net		132.8			1.2
Tax benefit from share-based compensation		39.0			48.3
Excess tax benefits from share-based compensation		(0.1	)		(18.9	)
Equity in earnings of unconsolidated affiliates		(17.9	)		(35.5	)
Changes in operating assets and liabilities:
Change in cash held by consolidated investment products		34.7			(55.1	)
(Increase)/decrease in receivables		(481.8	)		490.0
Increase/(decrease) in payables		269.2			(698.9	)
Net cash provided by operating activities		134.0			338.0
Investing activities:
Purchase of property and equipment		(23.3	)		(69.5	)
Disposal of property and equipment		6.4			0.1
Dividends from unconsolidated affiliates		27.4			28.1
Purchase of available-for-sale investments		(34.7	)		(98.7	)
Proceeds from sale of available-for-sale investments		37.0			63.0
Purchase of investments by consolidated investment products		(37.7	)		(94.0	)
Proceeds from sale of investments by consolidated investment products		28.0			165.6
Returns of capital in investments of consolidated investment products		11.3			71.2
Purchase of other investments		(35.9	)		(17.0	)
Proceeds from sale of other investments		9.1			31.6
Acquisition earn-out payments		—			(130.9	)
Net cash used in investing activities		(12.4	)		(50.5	)
Financing activities:
Issuance of new shares		441.8			—
Proceeds from exercises of share options		40.5			68.5
Purchases of treasury shares		—			(313.3	)
Dividends paid		(124.2	)		(168.4	)
Excess tax benefits from share-based compensation		0.1			18.9
Capital invested into consolidated investment products		5.5			73.3
Capital distributed by consolidated investment products		(35.0	)		(180.6	)
Borrowings of consolidated investment products		—			28.9
Repayments of consolidated investment products		—			(9.3	)
Net (repayments)/borrowings under credit facility		(12.0	)		45.6
Repayments of senior notes		(103.0	)		—
Acquisition of remaining noncontrolling interest in subsidiary		(10.3	)		—
Net cash provided by/(used in) financing activities		203.4			(436.4	)
Increase/(decrease) in cash and cash equivalents		325.0			(148.9	)
Foreign exchange movement on cash and cash equivalents		13.6			(26.3	)
Cash and cash equivalents, beginning of period		585.2			915.8
Cash and cash equivalents, end of period		923.8			740.6
Supplemental Cash Flow Information:
Interest paid		(41.9	)		(49.0	)
Interest received		8.1			30.0
Taxes paid		57.9			220.5

See accompanying notes.

5

Invesco Ltd.

Condensed Consolidated Statements of Changes in Equity
(Unaudited)

	Equity Attributable to Common Shareholders
															Non-
												Accumulated			controlling
			Additional									Other			interests in
	Common		Paid-in-			Treasury			Retained			Comprehensive			consolidated			Total
$ in millions	Shares		Capital			Shares			Earnings			Loss			entities			Equity
January 1, 2009		85.3		5,352.6			(1,128.9	)		1,476.3			(95.8	)		906.7			6,596.2
Net income, including gains and losses attributable to noncontrolling interests		—		—			—			211.6			—			(136.5	)		75.1
Other comprehensive income
Currency translation differences on investments in overseas subsidiaries		—		—			—			—			422.4			—			422.4
Change in minimum pension liability		—		—			—			—			(1.9	)		—			(1.9	)
Change in net unrealized gains on available-for-sale investments		—		—			—			—			13.0			—			13.0
Adoption of FSP FAS 115-2		—		—			—			—			(1.5	)		—			(1.5	)
Tax impacts of changes in accumulated other comprehensive income balances		—		—			—			—			0.2			—			0.2
Total comprehensive income		—		—			—			—			—			—			507.3
Adoption of FSP FAS 115-2		—		—			—			1.5			—			—			1.5
Change in noncontrolling interests in consolidated entities, net		—		—			—			—			—			(71.2	)		(71.2	)
Issuance of new shares		6.6		435.2			—			—			—			—			441.8
Dividends		—		—			—			(124.2	)		—			—			(124.2	)
Employee share plans:
Share-based compensation		—		68.1						—			—			—			68.1
Vested shares		—		(90.5	)		90.5			—			—			—			—
Exercise of options		—		(38.6	)		79.1			—			—			—			40.5
Tax impact of share-based payment		—		0.1			—			—			—			—			0.1
Modification of share-based payment awards		—		(13.0	)		—			—			—			—			(13.0	)
Purchase of shares		—		—			(12.6	)		—			—			—			(12.6	)
Acquisition of remaining noncontrolling interest in subsidiary		—		(8.9	)		—			—			—			(1.4	)		(10.3	)
September 30, 2009		91.9		5,705.0			(971.9	)		1,565.2			336.4			697.6			7,424.2

	Equity Attributable to Common Shareholders
															Non-
												Accumulated			controlling
			Additional									Other			interests in
	Common		Paid-in-			Treasury			Retained			Comprehensive			consolidated			Total
$ in millions	Shares		Capital			Shares			Earnings			Income			entities			Equity
January 1, 2008		84.9		5,306.3			(954.4	)		1,201.7			952.1			1,121.2			7,711.8
Net income, including gains and losses attributable to noncontrolling interests		—		—			—			449.8			—			0.5			450.3
Other comprehensive income
Currency translation differences on investments in overseas subsidiaries		—		—			—			—			(364.4	)		—			(364.4	)
Change in minimum pension liability		—		—			—			—			12.5			—			12.5
Change in net unrealized gains on available-for-sale investments		—		—			—			—			(14.1	)		—			(14.1	)
Tax impacts of changes in accumulated other comprehensive income balances		—		—			—			—			(4.0	)		—			(4.0	)
Total comprehensive income		—		—			—			—			—			—			80.3
Change in noncontrolling interests in consolidated entities, net		—		—			—			—			—			(171.4	)		(171.4	)
Dividends		—		—			—			(168.4	)		—			—			(168.4	)
Employee share plans:
Share-based compensation		—		89.7			—			—			—			—			89.7
Vested shares		—		(24.6	)		24.6			—			—			—			—
Exercise of options		0.4		(3.8	)		72.1			—			—			—			68.7
Tax impact of share-based payment		—		18.9			—			—			—			—			18.9
Purchase of shares		—		—			(313.3	)		—			—			—			(313.3	)
September 30, 2008		85.3		5,386.5			(1,171.0	)		1,483.1			582.1			950.3			7,316.3

See accompanying notes.

6

Invesco Ltd.

Notes to the Condensed Consolidated Financial Statements

1. ACCOUNTING POLICIES

  Corporate Information

     Invesco Ltd. (Parent) and all of its consolidated entities (collectively, the company or Invesco) provide retail, institutional and high-net-worth clients with an array of global investment management capabilities. The company’s sole business is investment management.

  Basis of Accounting and Consolidation

     The accompanying Condensed Consolidated Balance Sheets, Statements of Income, Statements of Cash Flows, and Statement of Changes in Equity (together, the Condensed Consolidated Financial Statements) have not been audited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the company’s Annual Report on Form 10-K for the year ended December 31, 2008. In the opinion of management, the Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation.

     The Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and consolidate the financial statements of the Parent, all of its controlled subsidiaries, any variable interest entities (VIEs) required to be consolidated, and any non-VIE general partnership investments where the company is deemed to have control. Control is deemed to be present when the Parent holds a majority voting interest or otherwise has the power to govern the financial and operating policies of the subsidiary so as to obtain the benefits from its activities. VIEs, or entities in which the risks and rewards of ownership are not directly linked to voting interests, for which the company is the primary beneficiary (having the majority of rewards/risks of ownership) are consolidated. Certain of the company’s managed products are structured as partnerships in which the company is the general partner receiving a management and/or performance fee. If the company is deemed to have a variable interest in these entities and is determined to be the primary beneficiary, these entities are consolidated into the company’s financial statements. If the company is not determined to be the primary beneficiary, the equity method of accounting is used to account for the company’s investment in these entities. Non-VIE general partnership investments are deemed to be controlled by the company and would be consolidated under a voting interest entity (VOE) model, unless the limited partners have the substantive ability to remove the general partner without cause based upon a simple majority vote or can otherwise dissolve the partnership, or unless the limited partners have substantive participating rights over decision-making. Investment products that are consolidated are referred to as consolidated investment products in the accompanying Condensed Consolidated Financial Statements.

     A significant portion of consolidated investment products are private equity funds. Private equity investments made by the underlying funds consist of direct investments in, or fund investments in other private equity funds that hold direct investments in, equity or debt securities in operating companies that are generally not initially publicly traded. Private equity funds are considered investment companies and are therefore accounted for under the American Institute of Certified Public Accountants’ Investment Company Audit Guide and are scoped out of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320, “Investments — Debt and Equity Securities.” All of the investments of consolidated investment products are presented at fair value in the financial statements. The company has retained the specialized industry accounting principles of these investment products in our Consolidated Financial Statements. See Note 9, “Consolidated Investment Products,” for additional details.

     The equity method of accounting is used to account for investments in joint ventures and noncontrolled subsidiaries in which the company’s ownership is between 20 and 50 percent. Equity investments are carried initially at cost (subsequently adjusted to recognize the company’s share of the profit or loss of the investee after the date of acquisition) and are included in investments on the Condensed Consolidated Balance Sheets. The proportionate share of income or loss is included in equity in earnings of unconsolidated affiliates in the Condensed Consolidated Statements of Income.

     The financial statements have been prepared primarily on the historical cost basis; however, certain items are presented using other bases such as fair value, where such treatment is required. The financial statements of subsidiaries are prepared for the same reporting year as the Parent and use consistent accounting policies, which, where applicable, have been adjusted to U.S. GAAP from local

7

generally accepted accounting principles or reporting regulations. Noncontrolling interests in consolidated entities represent the interests in certain entities consolidated by the company either because the company has control over the entity or has determined that it is the primary beneficiary, but of which the company does not own all of the equity.

     In preparing the financial statements, management is required to make estimates and assumptions that affect reported revenues, expenses, assets, liabilities and disclosure of contingent liabilities. The primary estimates relate to investment valuation, goodwill impairment and taxes. Use of available information and application of judgment are inherent in the formation of estimates. Actual results in the future could differ from such estimates and the differences may be material to the financial statements.

  Dividends to shareholders

     Dividends to shareholders are recognized on the declaration date. Dividends are declared and paid on a quarterly basis.

  Reclassifications

     The presentation of certain prior period reported amounts has been reclassified to be consistent with the current presentation. Such reclassifications had no impact on net income or shareholders’ equity.

  Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements

     In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (FASB Statement No. 157), which became effective for Invesco on January 1, 2008. FASB Statement No. 157, which is now encompassed in ASC Topic 820, “Fair Value Measurements and Disclosures,” clarified how companies should measure fair value when they are required by U.S. GAAP to use a fair value measure for recognition or disclosure. FASB Statement No. 157 established a common definition of fair value, established a framework for measuring fair value under U.S. GAAP, and expanded disclosures about fair value measurements to eliminate differences in current practice in measuring fair value under existing accounting standards. The adoption of FASB Statement No. 157 did not result in any retrospective adjustments to prior period information or in a cumulative effect adjustment to retained earnings. See Note 2, “Fair Value of Assets and Liabilities,” for additional disclosures.

     In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations (FASB Statement No. 141(R)),” and Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (FASB Statement No. 160).” Under FASB Statement No. 141(R), which is now encompassed in ASC Topic 805, “Business Combinations” (ASC Topic 805), the acquirer must recognize, with certain exceptions, 100% of the fair values of assets acquired, liabilities assumed, and noncontrolling interests in acquisitions of less than 100% controlling interest when the acquisition constitutes a change in control of the acquired entity. Additionally, when an acquirer obtains partial ownership in an acquiree, an acquirer recognizes and consolidates assets acquired, liabilities assumed and any noncontrolling interests at 100% of their fair values at that date regardless of the percentage ownership in the acquiree. As goodwill is calculated as a residual, all goodwill of the acquired business, not just the acquirer’s share, is recognized under this “full-goodwill” approach. Contingent consideration obligations that are elements of consideration transferred are recognized as of the acquisition date as part of the fair value transferred in exchange for the acquired business. Acquisition-related costs incurred in connection with a business combination shall be expensed. FASB Statement No. 160, which is now encompassed in ASC Topic 810, “Consolidation,” establishes new accounting and reporting standards for noncontrolling interests (formerly known as “minority interests”) in a subsidiary and for the deconsolidation of a subsidiary. FASB Statement No. 141(R) and FASB Statement No. 160 became effective for the company on January 1, 2009. FASB Statement No. 141(R) was applied prospectively, while FASB Statement No. 160 required retroactive adoption of the presentation and disclosure requirements for existing noncontrolling interests but prospective adoption of all of its other requirements. The adoption of FASB Statement No. 141(R) amended the definition of a business, which led to a change in the company’s basis, but not the company’s conclusion, of determining that it has one reporting unit for goodwill impairment purposes. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Critical Accounting Policies and Estimates — Goodwill” for additional information.

     In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (FASB Statement No. 159), which also became effective for Invesco on January 1, 2008, at its own discretion. FASB Statement No. 159, which is now encompassed under ASC Topic 825, “Financial Instruments” (ASC Topic 825), permits companies to elect, on an instrument-by-instrument basis, to fair value certain financial assets and financial liabilities with changes in fair value recognized in earnings as they occur (the fair value option). The company chose not to elect the FASB Statement No. 159 fair value option for eligible items existing on its balance sheet as of January 1, 2008, or for any new eligible items recognized subsequent to January 1, 2008.

8

     In February 2008, the FASB issued Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157 (FSP FAS 157-2).” FSP FAS 157-2, which is now encompassed in ASC Topic 820, “Fair Value Measurements and Disclosures” (ASC Topic 820), amended FASB Statement No. 157 to delay the effective date for nonfinancial assets and nonfinancial liabilities except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (that is, at least annually). For items within its scope, FSP FAS 157-2 delayed the effective date of FASB Statement No. 157 to January 1, 2009. As of January 1, 2008, Invesco applied the fair value measurement and disclosure provisions of FASB Statement No. 157 to its financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements. As of January 1, 2009, Invesco applied the fair value measurement and disclosure provisions of FASB Statement No. 157 to nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis. Those items include: (1) nonfinancial assets and nonfinancial liabilities initially measured at fair value in a business combination or other new basis event, but not measured at fair value in subsequent periods; (2) nonfinancial long-lived assets measured at fair value for an impairment assessment under FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets;” (now encompassed in ASC Topic 360, “Property, Plant and Equipment”); (3) nonfinancial liabilities for exit or disposal activities initially measured at fair value under FASB Statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities;” (now encompassed in ASC Topic 420, “Exit or Disposal Cost Obligations”) and (4) nonfinancial assets and nonfinancial liabilities measured at fair value in the second step of a goodwill impairment test. The adoption of FSP FAS 157-2 did not have a material impact on the company’s financial statements.

     In April 2008, the FASB issued Staff Position No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (FSP FAS 142-3). FSP FAS 142-3, which is now encompassed in ASC Topic 350, “Intangibles — Goodwill and Other” (ASC Topic 350), amended the factors that should be considered in developing renewal or extension assumptions used to determine the useful life over which to amortize the cost of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets,” also now encompassed in ASC Topic 350. FSP FAS 142-3 required an entity to consider its own assumptions about renewal or extension of the term of the arrangement, consistent with its expected use of the asset. FSP FAS 142-3 was intended to improve the consistency between the useful life of an intangible asset determined under FASB Statement No. 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141(R) (now encompassed in ASC Topic 805, “Business Combinations”) and other U.S. GAAP. The guidance provided by FSP FAS 142-3 for determining the useful life of a recognized intangible asset was to be applied prospectively to intangible assets acquired after the effective date, which is January 1, 2009. FSP FAS 142-3 did not have a material impact on the company’s financial statements.

     During June 2008, the FASB issued Staff Position No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (FSP EITF 03-6-1). FSP EITF 03-6-1, which is now encompassed in ASC Topic 260, “Earnings Per Share” (ASC Topic 260), addressed whether instruments granted in share-based payment transactions are participating securities prior to vesting and need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in FASB Statement No. 128, “Earnings Per Share,” also now encompassed in ASC Topic 260. The guidance in the FSP EITF 03-6-1 provided that only those unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities that should be included in the calculation of basic EPS under the two-class method. The FASB concluded that the holder of a share-based award receives a noncontingent transfer of value each time the entity declares a dividend, and therefore the share-based award meets the definition of a participating security. FSP EITF 03-6-1 was effective for financial statements issued for fiscal years beginning after December 15, 2008, with all prior period EPS data being adjusted retrospectively. The adoption of FSP EITF 03-6-1 on January 1, 2009, required the company to include unvested restricted stock units (RSUs) that contain nonforfeitable dividend equivalents as outstanding common shares for purposes of calculating basic EPS. The adoption of FSP EITF 03-6-1 did not have a material impact on the company’s calculation of basic EPS. The weighted average number of shares used for the calculation of prior period earnings per share have been restated to reflect the adoption of EITF 03-6-1. The adoption of FSP EITF 03-6-1 resulted in a change to the nine months ended September 30, 2008, reported diluted earnings per share amount of $0.01. There was no change to the three months ended September 30, 2008, figures.

     In October 2008, the FASB issued Staff Position No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (FSP FAS 157-3), which became effective for Invesco for the period ended September 30, 2008. FSP 157-3, which is now encompassed in ASC Topic 820, clarified the application of FASB Statement No. 157 (also now encompassed in ASC Topic 820) to financial assets in an inactive market. The FSP included an illustration of the application of judgment when selecting an appropriate discount rate to apply in the valuation of a collateralized debt obligation in a market that has become increasingly inactive. The adoption of FSP 157-3 did not have a material impact on the company’s financial statements.

     In December 2008, the FASB issued FASB Staff Position No. FAS 140-4 and FIN 46(R)-8, “Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities (FSP FAS 140-4 and FIN 46(R)-8),” which became effective for the

9

company on March 31, 2009. FSP FAS 140-4 and FIN 46(R)-8, which is now encompassed in ASC Topic 860, “Transfers and Servicing,” required additional disclosures by public entities with a) continuing involvement in transfers of financial assets to a special purpose entity or b) a variable interest in a variable interest entity. The adoption of FSP FAS 140-4 and FIN 46(R)-8 did not have a material impact on the company’s financial statements. See Note 9, “Consolidated Investment Products,” for additional disclosures.

     In January 2009, the FASB issued Staff Position No. EITF 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20 (FSP EITF 99-20-1),” which became effective for the company on March 31, 2009. FSP EITF 99-20-1, which is now encompassed in ASC Topic 325, “Investments — Other,” revised the impairment guidance provided by EITF 99-20 for beneficial interests to make it consistent with the requirements of FASB Statement No. 115 (now encompassed in ASC Topic 320, “Investments — Debt and Equity Securities”) for determining whether an impairment of other debt and equity securities is other-than-temporary. FSP EITF 99-20-1 eliminated the requirement to rely exclusively on market participant assumptions about future cash flows and permitted the use of reasonable management judgment of the probability that the holder will be unable to collect all amounts due. Instead, FSP 99-20-1 required that an other-than-temporary impairment be recognized when it is probable that there has been an adverse change in the holder’s estimated cash flows. FSP EITF 99-20-1 did not have a material impact on the company’s financial statements.

     On April 9, 2009, the FASB issued three Staff Positions (FSPs) intended to provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities. FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that Are Not Orderly (FSP FAS 157-4),” now encompassed in ASC Topic 820, provided guidelines for making fair value measurements more consistent with the principles presented in FASB Statement No. 157. FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1),” now encompassed in ASC Topic 825, enhanced consistency in financial reporting by increasing the frequency of fair value disclosures. FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2),” now encompassed in ASC Topic 320, provided additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities.

     FSP FAS 157-4 addressed the measurement of fair value of financial assets when there is no active market or where the price inputs being used could be indicative of distressed sales. FSP FAS 157-4 reaffirmed the definition of fair value already reflected in FASB Statement No. 157, which is the price that would be paid to sell an asset in an orderly transaction (as opposed to a distressed or forced transaction) at the measurement date under current market conditions. FSP FAS 157-4 also reaffirmed the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP FAS 157-4 became effective for the company for the period ended June 30, 2009. The application of FSP FAS 157-4 did not result in a change in valuation techniques or related inputs used to obtain the fair value measurement of its assets that are carried at fair value in the statement of financial position; however, it did result in expanded disclosures of fair valued assets by major security type. See Note 2, “Fair Value of Assets and Liabilities,” and Note 9, “Consolidated Investment Products,” for additional details.

     FSP FAS 107-1 was issued to improve the fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing FSP FAS 107-1, fair values of these assets and liabilities were only disclosed on an annual basis. FSP FAS 107-1 required these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP FAS 107-1 became effective for the company for the period ended June 30, 2009, which required the company to make annual disclosures in its interim financial statements, which are included in Note 2, “Fair Value of Assets and Liabilities,” Note 3, “Investments,” and Note 4, “Long-Term Debt.”

     FSP FAS 115-2 was intended to improve the consistency in the timing of impairment recognition and provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. FSP FAS 115-2 required increased and more timely disclosures sought by investors regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. The company adopted FSP FAS 115-2 on April 1, 2009. Upon adoption, the company recorded a cumulative effect adjustment of $1.5 million to the April 1, 2009, opening balance of retained earnings with a corresponding adjustment to accumulated other comprehensive income.

     In May 2009, the FASB issued Statement No. 165, “Subsequent Events” (SFAS 165). SFAS 165, which is now encompassed in ASC Topic 855, “Subsequent Events,” established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, SFAS 165 provided clarity around the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions

10

that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosure that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 was effective for interim and annual financial reporting periods ending after June 15, 2009, and was applied prospectively. The company has made the required disclosures at Note 14, “Subsequent Events.”

     In June 2009, the FASB issued Statement No. 166, “Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140,” (FASB Statement No. 166), which addresses the effects of eliminating the qualifying special-purpose entity concept from FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (FASB Statement No. 140), and will generally subject those entities to the consolidation guidance applied to other VIEs as provided by FASB Statement No. 167, “Amendments to FASB Interpretation No. 46(R)” (FASB Statement No. 167). FASB Statements No. 166 and 167 have yet to be entered by the FASB into the ASC. Specifically, FASB Statement No. 166 introduces the concept of a participating interest, which will limit the circumstances where the transfer of a portion of a financial asset will qualify as a sale, assuming all other derecogntion criteria are met, and clarifies and amends the derecogntion criteria for determining whether a transfer qualifies for sale accounting. FASB Statement No. 166 will be applied prospectively to new transfers of financial assets occurring on or after January 1, 2010. The company is currently assessing the impact of FASB Statement No. 166 on its Condensed Consolidated Financial Statements.

     In June 2009, the FASB issued Statement No. 167, which addresses the effects of eliminating the qualifying special-purpose entity concept from FASB Statement No. 140 and amends certain provisions of FIN 46(R). Specifically, FASB Statement No. 167 amends certain provisions for determining whether an entity is a VIE, it requires a qualitative rather than a quantitative analysis to determine whether the company is the primary beneficiary of a VIE, it amends FIN 46(R)’s consideration of related party relationships in the determination of the primary beneficiary of a VIE by providing an exception regarding de facto agency relationships in certain circumstances, it requires continuous assessments of whether the company is a VIE’s primary beneficiary, and it requires enhanced disclosures about the company’s involvement with VIEs, which are generally consistent with those disclosures required by FSP FAS 140-4 and FIN 46(R)-8 discussed above. The company is currently assessing the impact of FASB Statement No. 167 on its Condensed Consolidated Financial Statements. FASB Statement No. 167, which is effective January 1, 2010, may have a significant impact on the presentation of the company’s financial statements, as its provisions may require the company to consolidate many managed investment products that are not currently consolidated.

     In July 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — A Replacement of FASB Statement No. 162,” (FASB Statement No. 168). FASB Statement No. 168 replaced the existing hierarchy of U.S. Generally Accepted Accounting Principles with the FASB ASC as the single source of authoritative U.S. accounting and reporting standards applicable for all nongovernmental entities, with the exception of guidance issued by the U.S. Securities and Exchange Commission and its staff. FASB Statement No. 168 is now encompassed in ASC Topic 105, “Generally Accepted Accounting Principles,” and was effective July 1, 2009. The company has replaced references to FASB accounting standards with ASC references, where applicable and relevant, in this Report.

     In September 2009, the FASB issued Accounting Standards Update 2009-12, “Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)” (ASU 2009-12). ASU 2009-12 amends ASC Topic 820 to provide further guidance on how to measure the fair value of investments in alternative investments, such as hedge, private equity, real estate, venture capital, offshore and fund of funds. ASU 2009-12 permits, as a practical expedient, the measurement of fair value of an investment on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with ASC Topic 946, “U.S. GAAP for Investment Companies,” including measurement of all or substantially all of the fund’s underlying investments being accounted for at fair value in accordance with ASC Topic 820. ASU 2009-12 is effective for interim and annual periods ending after December 15, 2009. The company is currently assessing the impact of ASU 2009-12 on its Condensed Consolidated Financial Statements.

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2. FAIR VALUE OF ASSETS AND LIABILITIES

     The carrying value and fair value of financial instruments is presented in the below summary table:

	September 30, 2009								December 31, 2008
	Footnote		Carrying						Carrying
$ in millions	Reference		Value			Fair Value			Value			Fair Value
Cash and cash equivalents	2			923.8			923.8			585.2			585.2
Available for sale investments	2, 3			108.9			108.9			103.9			103.9
Assets held for policyholders				1,190.4			1,190.4			840.2			840.2
Trading investments	2, 3			81.0			81.0			36.2			36.2
Support agreements	9, 12			(2.5	)		(2.5	)		(5.5	)		(5.5	)
Policyholder payables				(1,190.4	)		(1,190.4	)		(840.2	)		(840.2	)
Current maturities of long-term debt		4		(294.2	)		(296.1	)		(297.2	)		(277.3	)
Long-term debt		4		(745.7	)		(753.1	)		(862.0	)		(711.2	)
				71.3			62.0			(439.4	)		(268.7	)

     A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

• Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.

     An asset or liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

     There are three types of valuation approaches: a market approach, which uses observable prices and other relevant information that is generated by market transactions involving identical or comparable assets or liabilities; an income approach, which uses valuation techniques to convert future amounts to a single, discounted present value amount; and a cost approach, which is based on the amount that currently would be required to replace the service capacity of an asset.

     The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Cash equivalents

     Cash equivalents include cash investments in money market funds and time deposits. Cash and cash equivalents invested in affiliated money market funds totaled $612.3 million at September 30, 2009 (December 31, 2008: $209.4 million). Cash investments in money market funds are valued under the market approach through the use of quoted market prices in an active market, which is the net asset value of the underlying funds, and are classified within level 1 of the valuation hierarchy. Cash investments in time deposits of $145.3 million at September 30, 2009 (December 31, 2008: $156.4 million) are very short-term in nature and are accordingly valued at cost plus accrued interest, which approximates fair value, and are classified within level 2 of the valuation hierarchy.

Available-for-sale investments

     Available-for-sale investments include amounts seeded into affiliated investment products, foreign time deposits and investments in affiliated collateralized loan obligations (CLOs). Seed money is valued under the market approach through the use of quoted market prices available in an active market and is classified within level 1 of the valuation hierarchy. Seed money investments are investments held in Invesco managed funds with the purpose of providing capital to the funds during their development periods. These investments are recorded at fair value using quoted market prices in active markets; there is no modeling or additional information needed to arrive at the fair values of these investments. Foreign time deposits are valued under the income approach based on observable interest rates and are classified within level 2 of the valuation hierarchy. CLOs are valued using an income approach

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through the use of certain observable and unobservable inputs. Due to current liquidity constraints within the market for CLO products that require the use of unobservable inputs, these investments are classified as level 3 within the valuation hierarchy.

Trading investments

     Trading investments primarily include the investments of the deferred compensation plans that are offered to certain Invesco employees. These investments are primarily invested in affiliated funds that are held to economically hedge current and non-current deferred compensation liabilities. Trading securities are valued under the market approach through the use of quoted prices in an active market and are classified within level 1 of the valuation hierarchy.

Assets held for policyholders

     Assets held for policyholders represent investments held by one of the company’s subsidiaries, which is an insurance entity that was established to facilitate retirement savings plans in the U.K. The assets held for policyholders are accounted for at fair value pursuant to ASC Topic 944, “Financial Services — Insurance,” and are comprised primarily of affiliated unitized funds. The assets are measured at fair value under the market approach based on the quoted prices of the underlying funds in an active market and are classified within level 1 of the valuation hierarchy. The policyholder liabilities are indexed to the value of the assets held for policyholders.

     The following table presents, for each of the hierarchy levels described above, the carrying value of the company’s assets, including major security type for equity and debt securities, which are measured at fair value on the face of the statement of financial position as of September 30, 2009.

	As of September 30, 2009
			Quoted Prices in
			Active Markets for		Significant Other		Significant
	Fair Value		Identical Assets		Observable Inputs		Unobservable Inputs
$ in millions	Measurements		(Level 1)		(Level 2)		(Level 3)
Current assets:
Cash equivalents:
Money market funds		612.3		612.3		—		—
Time deposits		145.3		—		145.3
Investments:*
Available-for-sale:
Seed money		71.6		71.6		—		—
Foreign time deposits		21.1		—		21.1		—
Trading investments:
Investments related to deferred compensation plans		80.8		80.8		—		—
Other		0.2		0.2		—		—
Assets held for policyholders		1,190.4		1,190.4		—		—
Total current assets		2,121.7		1,955.3		166.4		—
Non-current assets:
Investments — available-for-sale:
Collateralized loan obligations		16.2		—		—		16.2
Total assets at fair value		2,137.9		1,955.3		166.4		16.2

* Other current cost method investments of $0.5 million are excluded from this table. Other non-current equity and cost method investments of $120.7 million are also excluded from this table. These investments are not measured at fair value, in accordance with applicable accounting standards.

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     The following table presents, for each of the hierarchy levels described above, the carrying value of the company’s assets that are measured at fair value as of December 31, 2008:

	As of December 31, 2008
			Quoted Prices in
			Active Markets for		Significant Other		Significant
	Fair Value		Identical Assets		Observable Inputs		Unobservable Inputs
$ in millions	Measurements		(Level 1)		(Level 2)		(Level 3)
Current assets
Cash equivalents		365.8		209.4		156.4		—
Investments*:
Available-for-sale		86.4		69.1		17.3		—
Trading investments		36.2		36.2		—		—
Assets held for policyholders		840.2		840.2		—		—
Total current assets		1,328.6		1,154.9		173.7		—
Non-current assets:
Investments — available-for-sale*		17.5		—		—		17.5
Total assets at fair value		1,346.1		1,154.9		173.7		17.5

* Other current cost method investments of $1.0 million are excluded from this table. Other non-current equity and cost method investments of $103.8 million are also excluded from this table. These investments are not measured at fair value, in accordance with applicable accounting standards.

     The following table shows a reconciliation of the beginning and ending fair value measurements for level 3 assets during the three and nine month periods ending September 30, 2009, which are comprised solely of CLOs, and are valued using significant unobservable inputs:

	Three Months			Nine Months
	Ended Sept 30,			Ended Sept 30,
$ in millions	2009			2009
Beginning balance		13.4			17.5
Net unrealized gains and losses included in accumulated other comprehensive income/(loss)*		3.6			4.5
Purchases and issuances		—			—
Other-than-temporary impairment included in other gains and losses, net		(0.8	)		(5.2	)
Return of capital		—			(0.6	)
Ending balance		16.2			16.2

* Of these net unrealized gains and losses included in accumulated other comprehensive income/(loss), $3.6 million for the three months ended September 30, 2009, and $4.5 million for the nine months ended September 30, 2009, are attributed to the change in unrealized gains and losses related to assets still held at September 30, 2009.

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     The following table shows a reconciliation of the beginning and ending fair value measurements for level 3 assets during the three and nine month periods ending September 30, 2008, which are comprised solely of CLOs, and are valued using significant unobservable inputs:

	Three Months			Nine Months
	Ended Sept 30,			Ended Sept 30,
$ in millions	2008			2008
Beginning balance		30.7			39.0
Net unrealized gains and losses included in accumulated other comprehensive income*		—			(0.2	)
Purchases and issuances		0.7			1.5
Other-than-temporary impairment included in other gains and losses, net		(9.4	)		(16.8	)
Return of capital		(0.8	)		(2.3	)
Ending balance		21.2			21.2

* Of these net unrealized gains and losses included in accumulated other comprehensive income, $0.0 million for the three months ended September 30, 2008, and $0.2 million for the nine months ended September 30, 2008, are attributed to the change in unrealized gains and losses related to assets still held at September 30, 2008.

3. INVESTMENTS

  Current Investments

	As of
	September 30,		December 31,
$ in millions	2009		2008
Available-for-sale investments:
Seed money		71.6		69.1
Foreign time deposits		21.1		17.3
Trading investments:
Investments related to deferred compensation plans		80.8		35.5
Other		0.2		0.7
Other		0.5		1.0
Total current investments		174.2		123.6

  Non-current Investments

	As of
	September 30,		December 31,
$ in millions	2009		2008
Available-for-sale investments:
Collateralized loan obligations		16.2		17.5
Other		8.9		8.5
Equity method investments		111.8		95.3
Total non-current investments		136.9		121.3

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     The portion of trading gains and losses for the nine months ended September 30, 2009 that relates to trading securities still held at September 30, 2009 was $15.5 million. Realized gains and losses recognized in the income statement during the year from investments classified as available-for-sale are as follows:

For the Three Months Ended

For the Nine Months Ended

September 30, 2009

September 30, 2009

Proceeds

Gross

Gross

Proceeds

Gross

Gross

from

Realized

Realized

from

Realized

Realized

$ in millions

Sales

Gains

Losses

Sales

Gains

Losses

Current available-for-sale investments

7.3

2.5

(0.2

)

35.0

5.6

(1.6

)

Non-current available-for-sale investments

—

—

—

2.0

—

—

     Upon the sale of available-for-sale securities, net realized gains of $2.3 million and $4.0 million were transferred from accumulated other comprehensive income into the Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2009, respectively. The specific identification method is used to determine the realized gain or loss on securities sold or otherwise disposed.

     Gross unrealized holding gains and losses recognized in other accumulated comprehensive income from available-for-sale investments are presented in the table below:

	September 30, 2009									December 31, 2008
			Gross		Gross							Gross		Gross
			Unrealized		Unrealized							Unrealized		Unrealized
			Holding		Holding			Fair				Holding		Holding			Fair
$ in millions	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
Current:
Seed money		72.9		5.6		(6.9	)		71.6		78.9		3.7		(13.5	)		69.1
Foreign time deposits		21.1		—		—			21.1		17.3		—		—			17.3
Current available-for-sale investments		94.0		5.6		(6.9	)		92.7		96.2		3.7		(13.5	)		86.4
Non-current:
CLOs		12.8		3.6		(0.2	)		16.2		17.1		0.4		—			17.5
Other		7.2		1.7		—			8.9		6.8		1.7		—			8.5
Non-current available-for-sale investments:		20.0		5.3		(0.2	)		25.1		23.9		2.1		—			26.0
		114.0		10.9		(7.1	)		117.8		120.1		5.8		(13.5	)		112.4

     Available-for-sale debt securities as of September 30, 2009, by maturity, are set out below:

	Available-for-Sale
$ in millions	(Fair Value)
Less than one year		20.5
One to five years		2.1
Five to ten years		4.1
Greater than ten years		10.6
Total available-for-sale		37.3

     The following table provides the breakdown of available-for-sale investments with unrealized losses at September 30, 2009:

	Less Than 12 Months					12 Months or Greater					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
$ in millions	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
Seed money		6.4		(0.5	)		23.6		(6.4	)		30.0		(6.9	)
CLOs		1.3		(0.2	)		—		—			1.3		(0.2	)

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     The following table provides the breakdown of available-for-sale investments with unrealized losses at December 31, 2008:

Less Than 12 Months

12 Months or Greater

Total

Gross

Gross

Gross

Unrealized

Unrealized

Unrealized

$ in millions

Fair Value

Losses

Fair Value

Losses

Fair Value

Losses

Seed money

47.1

(12.8

)

8.7

(0.7

)

55.8

(13.5

)

     The company has reviewed investment securities for other-than-temporary impairment in accordance with its accounting policy and has recognized other-than-temporary impairment charges of $5.2 million and $2.7 million on CLOs and seed money, respectively, during the nine months ended September 30, 2009, as discussed in Note 2.

     As of September 30, 2009, the company reviewed the cash flow estimates of its CLOs, which are based on the underlying pools of securities and take into account the overall credit quality of the issuers, the forecasted default rates of the securities, and the company’s past experience in managing similar securities. These estimates of future cash flows, taking into account both timing and amounts and discounted using appropriate discount rates, indicated a sustained decline in valuation, resulting in credit-related other-than-temporary impairment charges recorded in other gains and losses, net, on the Condensed Consolidated Statements of Income during the three- and nine-months ended September 30, 2009, of $0.8 million and $5.2 million, respectively. These securities may recover their value over time; the company does not intend to sell its CLO investments before maturity.

     As discussed in Note 1, “Accounting Policies,” the company adopted FSP FAS 115-2, now encompassed in ASC Topic 320, on April 1, 2009. Upon adoption, the company recorded a cumulative effect adjustment of $1.5 million to the April 1, 2009, opening balance of retained earnings with a corresponding adjustment to accumulated other comprehensive income, representing the non-credit component of previously-recognized other-than-temporary impairment. During the three months ended September 30, 2009, $0.3 million was recorded as a charge to other comprehensive income from other-than-temporary impairment related to non-credit related factors, primarily the change in discount rates during the period. A rollforward of the cumulative credit-related other-than-temporary impairment charges recognized in earnings for which some portion of the impairment was recorded in other comprehensive income is as follows:

	Three months ended		Nine months ended
In millions	September 30, 2009		September 30, 2009
Beginning balance		17.6		16.8
Additional credit losses recognized during the period related to securities for which:
No OTTI has been previously recognized		—		—
OTTI has been previously recognized		0.6		1.4
Ending balance		18.2		18.2

     The gross unrealized losses from seed money investments during 2009 were primarily caused by declines in the market value of the underlying funds and foreign exchange movements. After conducting a review of the financial condition and near-term prospects of the underlying securities in the seeded funds as well as the severity and duration of the impairment, the company does not consider any material portion of its gross unrealized losses on these securities to be other-than-temporarily impaired. The securities are expected to recover their value over time and the company has the intent and ability to hold the securities until this recovery occurs.

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4. LONG-TERM DEBT

	September 30, 2009				December 31, 2008
	Carrying				Carrying
$ in millions	Value		Fair Value		Value		Fair Value
Unsecured Senior Notes*:
4.5% — due December 15, 2009		294.2		296.1		297.2		277.3
5.625% — due April 17, 2012		215.1		220.9		300.0		231.0
5.375% — due February 27, 2013		333.5		336.8		350.0		299.5
5.375% — due December 15, 2014		197.1		195.4		200.0		168.7
Floating rate credit facility expiring March 31, 2010		—		—		12.0		12.0
Floating rate credit facility expiring June 9, 2012		—		—		—		—
Total long-term debt		1,039.9		1,049.2		1,159.2		988.5
Less: current maturities of long-term debt		294.2		296.1		297.2		277.3
Long-term debt		745.7		753.1		862.0		711.2

* The company’s Senior Note indentures contain certain restrictions on mergers or consolidations. Beyond these items, there are no other restrictive covenants in the indentures.

     On June 2, 2009, the company commenced a tender offer for the maximum aggregate principal amount of the outstanding 5.625% senior notes due 2012, the 5.375% senior notes due 2013, and the 5.375% senior notes due 2014 (collectively, the “Notes”) that it could purchase for $100.0 million at a purchase price per $1,000 principal amount determined in accordance with the procedures of a modified “Dutch Auction” (tender offer). The tender offer expired at midnight on June 29, 2009, and on June 30, 2009, $104.3 million of the Notes had been retired, generating a gross gain of $4.3 million upon the retirement of debt at a discount ($3.3 million net of related expenses and the write-off of remaining unamortized debt discount costs), which was recorded in other gains and losses, net, on the Condensed Consolidated Statements of Income in the three months ended June 30, 2009.

     The fair market value of the company’s long term debt was determined by market quotes provided by Bloomberg. In the absence of an active market, the company relies upon the average price quoted by brokers for determining the fair market value of the debt. The level of trading, both in number of trades and amount of Notes traded, has increased to a level that the company believes to be a reasonable representation of the current fair market value of the Notes.

Analysis of Borrowings by Maturity:

$ in millions	September 30, 2009
2009		294.2
2010		—
2011		—
2012		215.1
2013		333.5
Thereafter		197.1
Total long-term debt		1,039.9

     On June 9, 2009, the company completed a new three-year $500.0 million revolving bank credit facility. The new credit facility replaced the $900.0 million credit facility that was scheduled to expire on March 31, 2010, but was terminated concurrent with the entry into the new credit facility. No early termination fees were incurred, and at the time of the termination, there were no loans outstanding under the prior credit facility.

     Amounts borrowed under the new credit facility are repayable at maturity on June 9, 2012, provided that such maturity date will automatically be accelerated to March 16, 2012, if 90% or more of the $300.0 million face amount of the company’s 5.625% senior notes due 2012, are not repaid, repurchased or defeased prior to March 16, 2012. Subject to certain conditions, the company has the right to increase the aggregate borrowings under the new credit facility up to $750.0 million.

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     At September 30, 2009, there was no outstanding balance on the new credit facility expiring June 9, 2012. Borrowings under the new credit facility will bear interest at (i) LIBOR for specified interest periods or (ii) a floating base rate (based upon the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50% and (c) LIBOR for an interest period of one month plus 1.00%), plus, in either case, an applicable margin determined with reference to the company’s credit ratings and specified credit default spreads. Based on credit ratings as of September 30, 2009, of the company and such credit default spreads, the applicable margin for LIBOR-based loans was 1.50% and for base rate loans was 0.50%. In addition, the company is required to pay the lenders a facility fee on the aggregate commitments of the lenders (whether or not used) at a rate per annum which is based on the company’s credit ratings. Based on credit ratings as of September 30, 2009, the annual facility fee was equal to 0.50%. The weighted average interest rate on the prior credit facility expiring March 31, 2010, was 4.06% at September 30, 2008.

     The credit agreement governing the new credit facility contains customary restrictive covenants on the company and its subsidiaries. Restrictive covenants in the credit agreement include, but are not limited to: prohibitions on creating, incurring or assuming any liens; making or holding external loans; entering into certain restrictive merger arrangements; selling, leasing, transferring or otherwise disposing of assets; making certain investments; making a material change in the nature of the business; making material amendments to organic documents; making a significant accounting policy change in certain situations; making or entering into restrictive agreements; becoming a general partner to certain investments; entering into transactions with affiliates; incurring certain indebtedness through the non-guarantor subsidiaries; and making certain restricted payments (with respect to equity and debt holders). Many of these restrictions are subject to certain minimum thresholds and exceptions. Financial covenants under the credit agreement include: (i) the quarterly maintenance of a debt/EBITDA ratio, as defined in the credit agreement, of not greater than 3.25:1.00 through December 31, 2010, and not greater than 3.00:1.00 thereafter, (ii) a coverage ratio (EBITDA, as defined in the credit agreement/interest payable for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00, and (iii) maintenance on a monthly basis of consolidated long-term assets under management (as defined in the credit agreement) of not less than $194.8 billion, which amount is subject to a one-time reset by the company under certain conditions.

     The credit agreement governing the new credit facility also contains customary provisions regarding events of default which could result in an acceleration or increase in amounts due, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, bankruptcy or insolvency proceedings, change of control, certain judgments, ERISA matters, cross-default to other debt agreements, governmental action prohibiting or restricting the company or its subsidiaries in a manner that has a material adverse effect and failure of certain guaranty obligations.

     The lenders (and their respective affiliates) may have provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, leasing, foreign exchange, trust or other advisory services to the company and its subsidiaries and affiliates. These parties may have received, and may in the future receive, customary compensation for these services.

5. COMMON SHARES AND SHARES OUTSTANDING

     Movements in the number of common shares issued are represented in the table below:

	Nine Months			Nine Months
	Ended Sept 30,			Ended Sept 30,
In millions	2009			2008
Shares Issued — Beginning Balance		426.6			424.7
Issue of new shares		32.9			—
Exercise of options		—			1.9
Shares Issued — Ending Balance		459.5			426.6
Less: Treasury shares for which dividend and voting rights do not apply		(30.7	)		(42.0	)
Shares outstanding		428.8			384.6

     On May 26, 2009, the company issued 32.9 million shares in a public offering that produced gross proceeds of $460.5 million ($441.8 million net of related expenses).

     Total treasury shares at September 30, 2009, were 43.3 million (September 30, 2008: 53.2 million), including 12.6 million unvested restricted stock awards (September 30, 2008: 11.2 million) for which dividend and voting rights apply.

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     During the nine months ended September 30, 2009, Invesco Ltd. did not purchase any shares in the market and in private transactions with current executive and other officers of the company (nine months ended September 30, 2008: 12.3 million shares at a cost of $313.3 million). Separately, an aggregate of 1.1 million shares were withheld on vesting events during the nine months ended September 30, 2009, to meet employees’ withholding tax obligations (2008: 0 shares). The value of these shares withheld was $12.6 million (nine months ended September 30, 2008: $0).

6. OTHER COMPREHENSIVE INCOME

     The components of accumulated other comprehensive income/(loss) were as follows:

	September 30,			December 31,
$ in millions	2009			2008
Net unrealized gains/(losses) on available-for-sale investments		3.8			(7.7	)
Tax on unrealized (losses)/gains on available-for-sale investments		(0.9	)		0.1
Cumulative foreign currency translation adjustments		376.1			(46.3	)
Tax on cumulative foreign currency translation adjustments		2.0			1.3
Pension liability adjustments		(61.3	)		(59.4	)
Tax on pension liability adjustments		16.7			16.2
Total accumulated other comprehensive income/(loss)		336.4			(95.8	)

     Total other comprehensive income details are presented below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
$ in millions	2009			2008			2009			2008
Net income, including gains and losses attributable to noncontrolling interests		104.7			136.1			75.1			450.3
Adoption of FSP FAS 115-2		—			—			(1.5	)		—
Unrealized holding gains and losses on available-for-sale investments		11.4			(17.7	)		9.1			(26.8	)
Tax on net unrealized holding gains and losses on available-for-sale investments		(0.6	)		1.6			(1.8	)		4.1
Reclassification adjustments for net gains and losses on available-for-sale investments included in net income		(1.5	)		8.3			3.9			12.7
Tax on reclassification adjustments for net gains and losses on available-for-sale investments included in net income		0.4			(0.4	)		0.8			(2.2	)
Foreign currency translation adjustments		102.9			(356.3	)		422.4			(364.4	)
Tax on foreign currency translation adjustments		(0.2	)		(1.7	)		0.6			(1.8	)
Adjustments to pension liability		1.6			12.3			(1.9	)		12.5
Tax on adjustments to pension liability		(1.4	)		(4.1	)		0.6			(4.1	)
Total other comprehensive income/(loss)		217.3			(221.9	)		507.3			80.3

7. TAXATION

     At September 30, 2009, the total amount of gross unrecognized tax benefits was $38.7 million as compared to the December 31, 2008, total amount of $55.9 million. During the three months ended September 30, 2009, a net tax benefit of $11.9 million was recognized as a result of the expiration of the statute of limitations for certain tax positions related to the 2005 tax year.

     The company and its subsidiaries file annual income tax returns in the United States (“U.S.”) federal jurisdiction, various U.S. state and local jurisdictions, and in numerous foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which the company has unrecognized tax benefits, is finally resolved. To the extent that the company has favorable tax settlements, or determines that accrued amounts are no longer needed due to a lapse in the applicable statute of limitations or other reasons, such liabilities, as well as the related interest and penalty, would be reversed as a reduction of income tax expense (net of federal tax effects, if applicable) in the period such determination is made.

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8. EARNINGS PER SHARE

     Basic earnings per share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares outstanding during the periods, excluding treasury shares. Diluted earnings per share is computed using the treasury stock method, which requires computing share equivalents and dividing net income attributable to common shareholders by the total weighted average number of shares and share equivalents outstanding during the periods.

     The calculation of earnings per share is as follows:

	Net Income
	Attributable to
	Common		Weighted Average		Per Share
In millions, except per share data	Shareholders		Number of Shares*		Amount
For the three months ended September 30, 2009
Basic earnings per share	$	105.2		431.6	$	0.24
Dilutive effect of share-based awards		—		6.1		—
Diluted earnings per share	$	105.2		437.7	$	0.24
For the three months ended September 30, 2008
Basic earnings per share	$	131.8		388.4	$	0.34
Dilutive effect of share-based awards		—		10.9		—
Diluted earnings per share	$	131.8		399.3	$	0.33

	Net Income
	Attributable to
	Common		Weighted Average		Per Share
In millions, except per share data	Shareholders		Number of Shares*		Amount
For the nine months ended September 30, 2009
Basic earnings per share	$	211.6		411.5	$	0.51
Dilutive effect of share-based awards		—		6.3		—
Diluted earnings per share	$	211.6		417.8	$	0.51
For the nine months ended September 30, 2008
Basic earnings per share	$	449.8		389.5	$	1.15
Dilutive effect of share-based awards		—		10.7		—
Diluted earnings per share	$	449.8		400.2	$	1.12

* The basic weighted average number of shares for the three months ended and the nine months ended September 30, 2008, was restated upon the adoption of EITF 03-6-1, as discussed in Note 1. The adoption of FSP EITF 03-6-1 resulted in a change to the nine months ended September 30, 2008, reported diluted earnings per share amount of $0.01. There was no change to the three months ended September 30, 2008, figures.

     See Note 10, “Share-based Compensation,” for a summary of share awards outstanding under the company’s share-based payment programs. These programs could result in the issuance of common shares that would affect the measurement of basic and diluted earnings per share.

     Options to purchase 12.9 million shares at a weighted average exercise price of 1,876 pence were outstanding for the nine months ended September 30, 2009 (nine months ended September 30, 2008: 13.8 million share options at a weighted average exercise price of 1,890 pence), but were not included in the computation of diluted earnings per share because the option’s exercise price was greater than the average market price of the shares and therefore their inclusion would have been anti-dilutive.

     The company excluded 1.6 million contingently issuable shares from the diluted earnings per share computation for the nine months ended September 30, 2009 (nine months ended September 30, 2008: 0.4 million contingently issuable shares), because the necessary performance conditions for the shares to be issuable had not yet been satisfied at the end of the respective period. There

21

were no contingently issuable shares that were excluded from the computation of diluted earnings per share during the nine months ended September 30, 2009 and 2008, due to their inclusion being anti-dilutive.

9. CONSOLIDATED INVESTMENT PRODUCTS

     The company provides investment management services to, and has transactions with, various private equity, real estate, fund-of-funds, CLOs and other investment entities sponsored by the company for the investment of client assets in the normal course of business. The company serves as the investment manager, making day-to-day investment decisions concerning the assets of the products. Certain of these investments are considered to be variable interest entities (VIEs). If the company is the primary beneficiary of the VIEs, then the investment products are consolidated into the company’s financial statements. Other partnership entities are consolidated under a voting interest entity (VOE) model where the company is the general partner and is presumed to have control, in the absence of simple majority kick-out rights to remove the general partner, simple majority liquidation rights to dissolve the partnership, or any substantive participating rights of the other limited partners.

     For investment products that are structured as partnerships and are determined to be VIEs, including private equity, real estate and fund-of-funds products, the company evaluates the structure of the partnership to determine if it is the primary beneficiary of the investment product. This evaluation includes assessing the rights of the limited partners to transfer their economic interests in the investment product. If the limited partners lack objective rights to transfer their economic interests, they are considered to be de facto agents of the company, resulting in the company determining that it is the primary beneficiary of the investment product. The company generally takes less than a 1% investment in these entities as the general partner. Interests in unconsolidated private equity, real estate and fund-of-funds products are classified as equity method investments in the company’s Condensed Consolidated Balance Sheets. The company’s risk with respect to each investment is limited to its equity ownership and any uncollected management fees. Therefore, gains or losses of consolidated investment products have not had a significant impact on the company’s results of operations, liquidity or capital resources. The company has no right to the benefits from, nor does it bear the risks associated with, these investments, beyond the company’s minimal direct investments in, and management fees generated from, the investment products. If the company were to liquidate, these investments would not be available to the general creditors of the company, and as a result, the company does not consider investments held by consolidated investment products to be company assets.

     For CLO entities, as discussed in Note 2, “Fair Value of Assets and Liabilities,” the company generally takes only a relatively small portion of the unrated, junior subordinated positions. The company’s investments in CLOs are generally subordinated to other interests in the entities and entitle the investors to receive the residual cash flows, if any, from the entities. Investors in CLOs have no recourse against the company for any losses sustained in the CLO structure. The company’s ownership interests, which are classified as available-for-sale investments on the company’s Condensed Consolidated Balance Sheets, combined with its other interests (management and incentive fees), are quantitatively assessed to determine if the company is the primary beneficiary of these entities. The company determined that it did not absorb the majority of the expected gains or losses from the CLOs and therefore is not their primary beneficiary. The company’s equity interest in the CLOs of $16.2 million at September 30, 2009 (December 31, 2008: $17.5 million), represents its maximum risk of loss.

     As discussed in Note 12, “Commitments and Contingencies,” the company has entered into contingent support agreements for two of its investment trusts to enable them to sustain a stable pricing structure, creating variable interests in these VIEs. The company earns management fees from the trusts and has a small investment in one of these trusts. The company was not deemed to be the primary beneficiary of these trusts after considering any explicit and implicit variable interests in relation to the total expected gains and losses of the trusts. The maximum committed amount under the support agreements, which represents the company’s maximum risk of loss, is equivalent to the amount of support that the trusts required as of September 30, 2009, to maintain the net asset value of the trusts at $1.00 per share. The recorded fair value of the guarantees related to these agreements at September 30, 2009, was estimated to be $2.5 million (December 31, 2008: $5.5 million), which was recorded as a guarantee obligation in the Condensed Consolidated Balance Sheet. The fair value of these agreements is lower than the maximum support amount reflecting management’s estimation that the likelihood of funding under the support agreement is low, as significant investor redemptions out of the trusts before the scheduled maturity of the underlying securities or significant credit default issues of the securities held within the trusts’ portfolios would be required to trigger funding by the company.

     In June 2009, the company invested in the initial public offering of Invesco Mortgage Capital Inc. (NYSE: IVR), a real estate investment trust which is managed by the company. The company purchased 75,000 common shares of IVR at $20.00 per share and 1,425,000 limited partner units at $20.00 per unit through private placements for a total of $30.0 million. The company determined that IVR is a VIE and that its investment represents a variable interest. The company’s ownership interests, which are classified as equity method investments on the company’s Condensed Consolidated Balance Sheets, combined with its other interests (management

22

fees), were quantitatively assessed to determine if the company is the primary beneficiary of IVR. The company determined that it did not absorb the majority of the expected gains or losses from IVR and therefore is not its primary beneficiary.

     At September 30, 2009, the company’s maximum risk of loss in significant VIEs in which the company is not the primary beneficiary is presented in the table below.

				Company’s Maximum
$ in millions	Carrying Value			Risk of Loss
CLOs		16.2			16.2
Partnership and trust investments		18.8			18.8
Investments in Invesco Mortgage Capital Inc.		30.0			30.0
Support agreements*		(2.5	)		20.0
Total					85.0

* As of September 30, 2009, the committed support under these agreements was $20.0 million with an internal approval mechanism to increase the maximum possible support to $65.0 million at the option of the company.

     The following tables reflect the impact of consolidation at fair value of investment products into the Condensed Consolidated Balance Sheets as of September 30, 2009, and December 31, 2008, and the Condensed Consolidated Statements of Income for the three and nine-month periods ended September 30, 2009, and 2008.

Balance Sheets

			Variable		Voting
	Before		Interest		Interest
$ in millions	Consolidation*		Entities		Entities		Eliminations			Total
As of September 30, 2009
Current assets		3,270.5		9.7		32.1		(0.5	)		3,311.8
Non-current assets		6,983.6		64.5		597.7		(8.0	)		7,637.8
Total assets		10,254.1		74.2		629.8		(8.5	)		10,949.6
Current liabilities		2,549.5		0.7		3.0		(0.5	)		2,552.7
Non-current liabilities		972.7		—		—		—			972.7
Total liabilities		3,522.2		0.7		3.0		(0.5	)		3,525.4
Total equity attributable to common shareholders		6,726.6		0.1		7.9		(8.0	)		6,726.6
Equity attributable to noncontrolling interests in consolidated entities		5.3		73.4		618.9		—			697.6
Total liabilities and equity		10,254.1		74.2		629.8		(8.5	)		10,949.6

			Variable		Voting
	Before		Interest		Interest
$ in millions	Consolidation*		Entities		Entities		Eliminations			Total
As of December 31, 2008
Current assets		2,301.7		13.6		64.1		(0.5	)		2,378.9
Non-current assets		6,550.5		141.9		701.9		(16.3	)		7,378.0
Total assets		8,852.2		155.5		766.0		(16.8	)		9,756.9
Current liabilities		2,098.3		1.1		4.5		(0.5	)		2,103.4
Non-current liabilities		1,057.3		—		—		—			1,057.3
Total liabilities		3,155.6		1.1		4.5		(0.5	)		3,160.7
Total equity attributable to common shareholders		5,689.5		0.9		15.4		(16.3	)		5,689.5
Equity attributable to noncontrolling interests in consolidated entities		7.1		153.5		746.1		—			906.7
Total liabilities and equity		8,852.2		155.5		766.0		(16.8	)		9,756.9

* The Before Consolidation column includes Invesco’s equity interest in the investment products, accounted for under the equity method.

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Statements of Income

				Variable			Voting
	Before			Interest			Interest
$ in millions	Consolidation*			Entities			Entities			Eliminations			Total
Three Months ended September 30, 2009
Total operating revenues		708.1			—			(0.4	)		(1.9	)		705.8
Total operating expenses		(553.3	)		(0.3	)		(2.5	)		1.9			(554.2	)
Operating income		154.8			(0.3	)		(2.9	)		—			151.6
Equity in earnings of unconsolidated affiliates		7.6			—			—			0.3			7.9
Interest income		1.7			—			—			—			1.7
Other investment income/(losses)		2.0			0.5			1.6			—			4.1
Interest expense		(16.9	)		—			—			—			(16.9	)
Income before income taxes, including gains and losses attributable to noncontrolling interests		149.2			0.2			(1.3	)		0.3			148.4
Income tax provision		(43.7	)		—			—			—			(43.7	)
Net income, including gains and losses attributable to noncontrolling interests		105.5			0.2			(1.3	)		0.3			104.7
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net		(0.3	)		(0.2	)		1.0			—			0.5
Net income attributable to common shareholders		105.2			—			(0.3	)		0.3			105.2

				Variable			Voting
	Before			Interest			Interest
$ in millions	Consolidation*			Entities			Entities			Eliminations		Total
Three Months ended September 30, 2008
Total operating revenues		827.2			—			—			—		827.2
Total operating expenses		(632.0	)		—			—			—		(632.0	)
Operating income		195.2			—			—			—		195.2
Equity in earnings of unconsolidated affiliates		6.8			—			—			1.2		8.0
Interest income		8.0			—			—			—		8.0
Other investment income/(losses)		(10.4	)		9.2			(6.4	)		—		(7.6	)
Interest expense		(18.3	)		—			—			—		(18.3	)
Income before income taxes, including gains and losses attributable to noncontrolling interests		181.3			9.2			(6.4	)		1.2		185.3
Income tax provision		(49.2	)		—			—			—		(49.2	)
Net income, including gains and losses attributable to noncontrolling interests		132.1			9.2			(6.4	)		1.2		136.1
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net		(0.3	)		(10.2	)		6.2			—		(4.3	)
Net income attributable to common shareholders		131.8			(1.0	)		(0.2	)		1.2		131.8

* The Before Consolidation column includes Invesco’s equity interest in the investment products, accounted for under the equity method.

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				Variable			Voting
	Before			Interest			Interest
$ in millions	Consolidation*			Entities			Entities			Eliminations			Total
Nine Months ended September 30, 2009
Total operating revenues		1,883.6			0.3			1.5			(5.9	)		1,879.5
Total operating expenses		(1,553.0	)		(1.3	)		(7.3	)		5.9			(1,555.7	)
Operating income		330.6			(1.0	)		(5.8	)		—			323.8
Equity in earnings of unconsolidated affiliates		15.4			—			—			2.5			17.9
Interest income		7.7			—			—			—			7.7
Other investment income/(losses)		7.8			(16.0	)		(116.8	)		—			(125.0	)
Interest expense		(49.3	)		—			—			—			(49.3	)
Income before income taxes, including gains and losses attributable to noncontrolling interests		312.2			(17.0	)		(122.6	)		2.5			175.1
Income tax provision		(100.0	)		—			—			—			(100.0	)
Net income/(loss), including gains and losses attributable to noncontrolling interests		212.2			(17.0	)		(122.6	)		2.5			75.1
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net		(0.6	)		17.0			120.1			—			136.5
Net income attributable to common shareholders		211.6			—			(2.5	)		2.5			211.6

				Variable			Voting
	Before			Interest			Interest
$ in millions	Consolidation*			Entities			Entities			Eliminations			Total
Nine Months ended September 30, 2008
Total operating revenues		2,669.6			0.1			5.5			(2.0	)		2,673.2
Total operating expenses		(2,006.0	)		(0.7	)		(5.2	)		2.0			(2,009.9	)
Operating income		663.6			(0.6	)		0.3			—			663.3
Equity in earnings of unconsolidated affiliates		34.6			—			—			0.9			35.5
Interest income		30.0			—			—			—			30.0
Other investment income/(losses)		(18.0	)		24.0			(25.2	)		—			(19.2	)
Interest expense		(59.1	)		—			—			—			(59.1	)
Income before income taxes , including gains and losses attributable to noncontrolling interests		651.1			23.4			(24.9	)		0.9			650.5
Income tax provision		(200.2	)		—			—			—			(200.2	)
Net income, including gains and losses attributable to noncontrolling interests		450.9			23.4			(24.9	)		0.9			450.3
(Gains)/losses attributable to noncontrolling interests in consolidated entities, net		(1.1	)		(23.4	)		24.0			—			(0.5	)
Net income attributable to common shareholders		449.8			—			(0.9	)		0.9			449.8

* The Before Consolidation column includes Invesco’s equity interest in the investment products, accounted for under the equity method.

     During the nine months ended September 30, 2009, the company deconsolidated $53.3 million of investments held by consolidated investment products and related noncontrolling interests in consolidated entities as a result of determining that the company is no longer the primary beneficiary. The amounts deconsolidated from the Condensed Consolidated Balance Sheet is illustrated in the table below. There was no net impact to the Condensed Consolidated Statement of Income for the nine months ended September 30, 2009, from the deconsolidation of these investment products.

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Balance Sheet

	VIEs
$ in millions	deconsolidated
Nine months ended September 30, 2009
Current assets		—
Non-current assets		53.3
Total assets		53.3
Current liabilities		—
Non-current liabilities		—
Total liabilities
Total equity attributable to common shareholders		—
Equity attributable to noncontrolling interests in consolidated entities		53.3
Total liabilities and equity		53.3

     As a result of amendments made to limited partnership agreements of certain real estate partnerships in the six months ended June 30, 2008, the company determined that it no longer controlled certain real estate partnerships. Accordingly, amounts reflected in the VOEs deconsolidated column of the table below were deconsolidated effective April 1, 2008. Amendments were made to other limited partnership agreements to add objective transfer criteria, whereby the limited partners have the ability to transfer their economic interests in the funds to other investors without restrictive consent of the general partner. As a result of the addition of objective transfer criteria, a reconsideration event, the non-affiliated limited partner investors are now no longer deemed de facto agents of the general partner. Accordingly, amounts reflected in the VIEs deconsolidated column of the table below were deconsolidated effective April 1, 2008. This reconsideration event also triggered the consolidation at April 1, 2008, under the VOE consolidation model, of $148.1 million of net assets of consolidated investment products and $146.6 million of related minority interest. There was no net impact to the Condensed Consolidated Statement of Income for the nine months ended September 30, 2008, from the consolidation or deconsolidation of these investment products.

	VOEs		VIEs		VOEs
$ in millions	consolidated*		deconsolidated*		deconsolidated
Nine months ended September 30, 2008
Current assets		5.4		0.4		2.4
Non-current assets		142.8		—		398.0
Total assets		148.2		0.4		400.4
Current liabilities		—		—		—
Non-current liabilities		0.1		—		136.2
Total liabilities		0.1		—		136.2
Equity attributable to common shareholders		1.5		0.4		8.1
Equity attributable to noncontrolling interests in consolidated entities		146.6		—		256.1
Total liabilities and equity		148.2		0.4		400.4

* The company changed the basis of consolidation of $610.5 million in net assets of consolidated investment products and the related minority interest of $600.5 million effective April 1, 2008, from a VOE consolidation model to a VIE consolidation model, which is not reflected in these columns. This change did not impact our Consolidated Financial Statements, as the amounts were already being consolidated.

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     The carrying value of investments held by consolidated investment products is also their fair value. The following table presents the fair value hierarchy levels of investments held by consolidated investment products, which are measured at fair value as of September 30, 2009:

	As of September 30, 2009
			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair Value		for Identical		Observable		Unobservable
$ in millions	Measurements		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
Assets:
Equity securities		109.9		6.8		—		103.1
Investments in other private equity funds		536.8		—		—		536.8
Debt securities issued by in U.S. Treasury		15.5		15.5		—		—
Investments held by consolidated investment products		662.2		22.3		—		639.9

     The following table presents the fair value hierarchy levels of the carrying value of investments held by consolidated investment products, which are measured at fair value as of December 31, 2008:

	As of December 31, 2008
			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair Value		for Identical		Observable		Unobservable
$ in millions	Measurements		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
Assets:
Investments held by consolidated investment products		843.8		82.8		—		761.0

     The following table shows a reconciliation of the beginning and ending fair value measurements for level 3 assets using significant unobservable inputs:

	Three Months		Nine Months
	Ended Sept 30,		Ended Sept 30,
$ in millions	2009		2009
Beginning balance		632.4		761.0
Purchases and sales, net		6.1		12.3
Gains and losses included in the Condensed Consolidated Statement of Income*		1.4		(133.4	)
Ending balance		639.9		639.9

* Included in gains and losses in the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2009, are $1.1 million and $126.4 million, respectively, in net unrealized losses attributable to investments held at September 30, 2009, by consolidated investment products.

     Consolidated investment products are generally structured as partnerships. For private equity partnerships, fair value is determined by reviewing each investment for the sale of additional securities of an issuer to sophisticated investors or for investee financial conditions and fundamentals. Publicly traded portfolio investments are carried at market value as determined by their most recent quoted sale, or if there is no recent sale, at their most recent bid price. For these investments held by consolidated investment products, level 1 classification indicates that fair values have been determined using unadjusted quoted prices in active markets for identical assets that the partnership has the ability to access. Level 2 classification may indicate that fair values have been determined using quoted prices in active markets but give effect to certain lock-up restrictions surrounding the holding period of the underlying investments.

     The fair value of level 3 investments held by consolidated investment products are derived from inputs that are unobservable and which reflect the limited partnerships’ own determinations about the assumptions that market participants would use in pricing the investments, including assumptions about risk. These inputs are developed based on the partnership’s own data, which is adjusted if information indicates that market participants would use different assumptions. The partnerships which invest directly into private equity portfolio companies (direct private equity funds) take into account various market conditions, subsequent rounds of financing,

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liquidity, financial condition, purchase multiples paid in other comparable third-party transactions, the price of securities of other companies comparable to the portfolio company, and operating results and other financial data of the portfolio company, as applicable.

     The partnerships which invest into other private equity funds (funds of funds) take into account information received from those underlying funds, including their reported net asset values and evidence as to their fair value approach, including consistency of their fair value application. These investments do not trade in active markets and represent illiquid long-term investments that generally require future capital commitments. While the partnerships’ reported share of the underlying net asset values of the underlying funds is usually the most significant input in arriving at fair value and is generally representative of fair value, other information may also be used to value such investments at a premium or discount to the net asset values as reported by the funds, including allocations of priority returns within the funds as well as any specific conditions and events affecting the funds.

     Unforeseen events might occur that would subsequently change the fair values of these investments, but such changes would be inconsequential to the company due to its minimal investments in these products (and the large offsetting noncontrolling interests resulting from their consolidation). Any gains or losses resulting from valuation changes in these investments are substantially offset by resulting changes in gains and losses attributable to noncontrolling interests in consolidated entities and therefore do not have a material effect on the financial condition, operating results (including earnings per share), liquidity or capital resources of the company’s common shareholders.

10. SHARE-BASED COMPENSATION

     The company recognized total share-based compensation expenses of $68.1 million in the nine months ended September 30, 2009 (September 30, 2008: $89.7 million). The total income tax benefit recognized in the Consolidated Statements of Income for share-based compensation arrangements was $21.9 million for the nine months ended September 30, 2009 (September 30, 2008: $27.6 million).

     Cash received from the exercise of share options and sharesave plan awards granted under share-based compensation arrangements was $40.5 million in the nine months ended September 30, 2009 (September 30, 2008: $68.5 million). The excess tax benefit realized from share option exercises was $0.1 million in the nine months ended September 30, 2009 (September 30, 2008: $18.9 million).

Share Awards

     Share awards are broadly classified into two categories: time-vested and performance-vested share awards. Share awards are measured at fair value at the date of grant and are expensed on a straight-line or accelerated basis over the vesting period, based on the company’s estimate of shares that will eventually vest.

     Time-vested awards vest ratably over or cliff-vest at the end of a period of continued employee service. Performance-vested awards cliff-vest at the end of or vest ratably over a defined vesting period of continued employee service upon the company’s attainment of certain performance criteria, generally the attainment of cumulative earnings per share growth targets at the end of the vesting period reflecting a compound annual growth rate of between 10.0% and 15.0% per annum during a three-year period. Time-vested and performance-vested share awards are granted in the form of restricted share awards (RSAs) or restricted share units (RSUs). Dividends accrue directly to the employee holder of RSAs, and cash payments in lieu of dividends are made to employee holders of certain RSUs. There is therefore no discount to the fair value of these share awards at their grant date. Movements on share awards priced in Pounds Sterling prior to the company’s primary share listing moving to the New York Stock Exchange from the London Stock Exchange, which occurred on December 4, 2007, in connection with the redomicile of the company from the U.K. to Bermuda, are detailed below:

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	Nine months ended September 30, 2009								Nine months ended September 30, 2008
							Weighted Average
	Time-			Performance-			Grant Date		Time-			Performance-
Millions of shares, except fair values	Vested			Vested			Fair Value (pence)		Vested			Vested
Unvested at the beginning of period		10.2			6.0			9.62		15.2			6.2
Forfeited during the period		(0.3	)		(0.1	)		8.90		(0.6	)		(0.1	)
Modification of share-based payment awards*		—			(1.4	)		9.37		—			—
Vested and distributed during the period		(1.9	)		(2.2	)		8.31		(1.5	)		—
Unvested at the end of the period		8.0			2.3			10.22		13.1			6.1

* During the nine months ended September 30, 2009, the company modified the terms of 1.4 million equity-settled share-based payment awards such that the awards are now deferred cash awards. As a result of this modification, $13.0 million was reclassified out of additional paid in capital and into other current and non-current liabilities on the Condensed Consolidated Balance Sheet during the period. There was no impact to the Condensed Consolidated Statement of Income or earnings per share as a result of this modification.

     Subsequent to the company’s primary share listing moving to the New York Stock Exchange, shares are now priced in U.S. dollars. Movements on share awards priced in U.S. dollars are detailed below:

	Nine months ended September 30, 2009					Nine months ended September 30, 2008
				Weighted Average					Weighted Average
	Time-			Grant Date		Time-			Grant Date
Millions of shares, except fair values	Vested			Fair Value ($)		Vested			Fair Value ($)
Unvested at the beginning of period		3.5			26.67		—			—
Granted during the period		8.9			11.49		3.6			26.96
Forfeited during the period		(0.1	)		22.94		(0.1	)		27.01
Vested and distributed during the period		(0.6	)		26.25		—			—
Unvested at the end of the period		11.7			15.24		3.5			26.96

     Share awards outstanding at September 30, 2009, had a weighted average remaining contractual life of 1.35 years.

Share Options

     The company has not granted awards of share options since 2005. The company maintains two historical option plans with outstanding share options: the 2000 Share Option Plan and the No. 3 Executive Share Option Scheme.

     The share option plans provided for a grant price equal to the quoted market price of the company’s shares on the date of grant. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the company before the options vest. The share option programs were valued using a stochastic model (a lattice model) at grant date.

     Changes in outstanding share option awards are as follows:

						Nine months ended
	Nine months ended September 30, 2009					September 30, 2008
				Weighted Average
	Options			Exercise Price		Options
	(millions of shares)			(£ Sterling)		(millions of shares)
Outstanding at the beginning of the period		23.1			14.06		29.7
Forfeited during the period		(0.8	)		17.41		(1.1	)
Exercised during the period		(2.5	)		9.02		(4.5	)
Outstanding at the end of the period		19.8			14.56		24.1
Exercisable at the end of the period		19.5			14.74		21.3

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     The share option exercise prices are denominated in Pounds Sterling. Upon exercise, the Pound Sterling exercise price will be converted to U.S. dollars using the foreign exchange rate in effect on the exercise date. The options outstanding at September 30, 2009, had a range of exercise prices from 50 pence to 3,360 pence, and a weighted average remaining contractual life of 2.72 years (for options exercisable at September 30, 2009, the weighted average remaining contractual life is 2.69 years). The total intrinsic value of options exercised during the nine months ended September 30, 2009 and 2008, was $13.2 million and $41.3 million, respectively. At September 30, 2009, the aggregate intrinsic value of options outstanding and options exercisable was $86.7 million and $81.2 million, respectively. The market price of the company’s common stock at September 30, 2009, was $22.76.

11. RETIREMENT BENEFIT PLANS

Defined Contribution Plans

     The company operates defined contribution retirement benefit plans for all qualifying employees. The assets of the plans are held separately from those of the company in funds under the control of trustees. When employees leave the plans prior to vesting fully in the contributions, the contributions payable by the company are reduced by the amount of forfeited contributions.

     The total amounts charged to the Condensed Consolidated Statements of Income for the nine months ended September 30, 2009 and 2008, of $32.5 million and $35.2 million, respectively, represent contributions payable or paid to these plans by the company at rates specified in the rules of the plans. As of September 30, 2009, accrued contributions of $13.7 million (December 31, 2008: $21.0 million) for the current year will be paid to the plans when due.

Defined Benefit Plans

     The company maintains legacy defined benefit pension plans for qualifying employees of its subsidiaries in the U.K., Ireland, Germany, Taiwan, and the U.S. All defined benefit plans are closed to new participants, and the U.S. plan benefits have been frozen. The company also maintains a post-retirement medical plan in the U.S., which was closed to new participants in 2005. In 2006, the plan was amended to eliminate benefits for all participants who will not meet retirement eligibility by 2008. The assets of all defined benefit schemes are held in separate trustee-administered funds. Under the plans, the employees are generally entitled to retirement benefits based on final salary at retirement.

     The components of net periodic benefit cost in respect of these defined benefit plans are as follows:

	Three Months Ended September 30,												Nine Months Ended September 30,
	Retirement Plans						Medical Plan						Retirement Plans						Medical Plan
$ in millions	2009			2008			2009			2008			2009			2008			2009			2008
Service cost		1.6			1.8			0.1			0.2			8.3			5.5			0.3			0.2
Interest cost		4.8			4.8			0.6			0.6			14.6			14.5			1.9			1.9
Expected return on plan assets		(5.3	)		(5.4	)		(0.1	)		(0.1	)		(15.8	)		(16.7	)		(0.3	)		(0.4	)
Amortization of prior service cost		—			—			(0.5	)		(0.5	)		—			—			(1.5	)		(1.5	)
Amortization of net actuarial (loss)/gain		0.3			2.7			1.1			1.2			0.8			3.7			3.2			3.1
Net periodic benefit cost		1.4			3.9			1.2			1.4			7.9			7.0			3.6			3.3

     The estimated amounts of contributions expected to be paid to the plans during 2009 is $6.3 million for retirement plans, with no expected contribution to the medical plan.

12. COMMITMENTS AND CONTINGENCIES

     Commitments and contingencies may arise in the ordinary course of business.

     The company has transactions with various private equity, real estate and other investment entities sponsored by the company for the investment of client assets in the normal course of business. Many of the company’s investment products are structured as limited partnerships. The company’s investment may take the form of the general partner or a limited partner, and the entities are structured such that each partner makes capital commitments that are to be drawn down over the life of the partnership as investment opportunities are identified. At September 30, 2009, the company’s undrawn capital commitments were $85.5 million (December 31, 2008: $36.5 million).

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     The volatility and valuation dislocations that occurred from 2007 to the date of this Report in certain sectors of the fixed income market have generated pricing issues in many areas of the market. As a result of these valuation dislocations, during the fourth quarter of 2007, Invesco elected to enter into contingent support agreements for two of its investment trusts to enable them to sustain a stable pricing structure. These two trusts are unregistered trusts that invest in fixed income securities and are available only to accredited investors. In June 2009, the agreements were amended to extend the term through December 31, 2009. As of September 30, 2009, the committed support under these agreements was $20.0 million with an internal approval mechanism to increase the maximum possible support to $65.0 million at the option of the company. The recorded fair value of the guarantees related to these agreements at September 30, 2009, was estimated to be $2.5 million (December 31, 2008: $5.5 million), which was recorded in other current liabilities on the Condensed Consolidated Balance Sheet. No payments have been made under either agreement nor has Invesco realized any losses from the support agreements through the date of this Report. These trusts were not consolidated because the company was not deemed to be the primary beneficiary.

     A subsidiary of the company has received an assessment from the Canada Revenue Agency (CRA) for goods and services tax (GST) related to various taxation periods from November 1999 to December 2003 in the amount of $19.9 million related to GST on sales charges collected from investors upon the redemption of certain mutual funds. Management believes that the CRA’s claims are unfounded and that this assessment is unlikely to stand, and accordingly no provision has been recorded in the Condensed Consolidated Financial Statements.

Acquisition Contingencies

     Contingent consideration related to acquisitions includes the following:

• Earn-outs relating to the Invesco PowerShares acquisition. A contingent payment of up to $500.0 million could be due in October 2011, five years after the date of acquisition, based on compound annual growth in management fees (as defined and adjusted pursuant to the acquisition agreement) from an assumed base of $17.5 million at closing. The Year 5 management fees will be reduced by $50.0 million, for purposes of the calculation, since the second contingent payment was earned. For a compound annual growth rate (CAGR) in Year 5 below 15%, no additional payment will be made. For a CAGR in Year 5 between 15% and 75%, $5.0 million for each CAGR point above 15%, for a maximum payment of $300.0 million for a 75% CAGR. For a CAGR in Year 5 between 75% and 100%, $300.0 million, plus an additional $8.0 million for each CAGR point above 75%, for a maximum total payment of $500.0 million for a 100% CAGR.

• Earn-outs relating to the WL Ross acquisition. Contingent payments of up to $55.0 million are due each year for the five years following the October 2006 date of acquisition based on the size and number of future fund launches in which W.L. Ross & Co. is integrally involved. The maximum remaining contingent payments of $165.0 million would require annual fund launches to total $4.0 billion. The April 3, 2009, earn-out calculation resulted in an addition to goodwill and a non-interest bearing note payable to the sellers of $6.5 million, payable at the next measurement date, October 3, 2009. See Note 14, “Subsequent Events,” for details of the October 3, 2009, measurement date adjustment.

Legal Contingencies

     Following the industry-wide regulatory investigations in 2003 and 2004, multiple lawsuits based on market timing allegations were filed against various parties affiliated with Invesco. These lawsuits were consolidated in the United States District Court for the District of Maryland, together with market timing lawsuits brought against affiliates of other mutual fund companies, and on September 29, 2004, three amended complaints were filed against company-affiliated parties: (1) a putative shareholder class action complaint brought on behalf of shareholders of AIM funds formerly advised by Invesco Funds Group, Inc.; (2) a derivative complaint purportedly brought on behalf of certain AIM funds and the shareholders of such funds; and (3) an ERISA complaint purportedly brought on behalf of participants in the company’s 401(k) plan. The company and plaintiffs have reached settlements in principle of these lawsuits. The proposed settlements, which are subject to court approval, call for a payment by the company of $9.8 million, recorded in general and administrative expenses in the Consolidated Statement of Income during the three months ended December 31, 2007, in exchange for dismissal with prejudice of all pending claims. In addition, under the terms of the proposed settlements, the company may incur certain costs in connection with providing notice of the proposed settlements to affected shareholders. Based on information currently available, it is not believed that any such incremental notice costs will have any material effect on the consolidated financial position or results of operations of the company.

31

     The asset management industry also is subject to extensive levels of ongoing regulatory oversight and examination. In the United States and other jurisdictions in which the company operates, governmental authorities regularly make inquiries, hold investigations and administer market conduct examinations with respect to compliance with applicable laws and regulations. Additional lawsuits or regulatory enforcement actions arising out of these inquiries may in the future be filed against the company and related entities and individuals in the U.S. and other jurisdictions in which the company and its affiliates operate. Any material loss of investor and/or client confidence as a result of such inquiries and/or litigation could result in a significant decline in assets under management, which would have an adverse effect on the company’s future financial results and its ability to grow its business.

     In the normal course of its business, the company is subject to various litigation matters. Although there can be no assurances, at this time management believes, based on information currently available to it, that it is not probable that the ultimate outcome of any of these actions will have a material adverse effect on the consolidated financial condition or results of operations of the company.

13. GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

     Prior to the December 4, 2007, redomicile of the company from the United Kingdom to Bermuda and the relisting of the company from the London Stock Exchange to the New York Stock Exchange, INVESCO PLC (now known as Invesco Holding Company Limited), the Issuer, issued 4.5% $300.0 million senior notes due 2009, 5.625% $300.0 million senior notes due 2012, 5.375% $350.0 million senior notes due 2013 and 5.375% $200.0 million senior notes due 2014. These senior notes, are fully and unconditionally guaranteed as to payment of principal, interest and any other amounts due thereon by Invesco Ltd. (the Parent), together with the following wholly owned subsidiaries: Invesco Aim Management Group, Inc., Invesco Aim Advisors, Inc., Invesco North American Holdings, Inc., and Invesco Institutional (N.A.), Inc. (the Guarantors). On June 9, 2009, in connection with the new credit facility agreement discussed in Note 4, “Long-term Debt,” IVZ, Inc. also became a guarantor of the senior notes. The company’s remaining consolidated subsidiaries do not guarantee this debt. The guarantees of each of the Guarantors are joint and several. Presented below are Condensed Consolidating Balance Sheets as of September 30, 2009, and December 31, 2008, Condensed Consolidating Statements of Income for the three and nine months ended September 30, 2009 and 2008, and Condensed Consolidating Statements of Cash Flows for the nine months ended September 30, 2009 and 2008.

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Condensed Consolidating Balance Sheets

			Non-
$ in millions	Guarantors		Guarantors			Issuer		Parent			Eliminations			Consolidated
As of September 30, 2009
Assets held for policyholders		—		1,190.4			—		—			—			1,190.4
Other current assets		535.5		1,545.9			7.7		32.3			—			2,121.4
Total current assets		535.5		2,736.3			7.7		32.3			—			3,311.8
Goodwill		2,302.8		3,620.4			455.5		—			—			6,378.7
Investments in subsidiaries		729.1		5.7			4,645.7		6,281.1			(11,661.6	)		—
Other non-current assets		156.0		1,101.8			1.3		—			—			1,259.1
Total assets		3,723.4		7,464.2			5,110.2		6,313.4			(11,661.6	)		10,949.6
Policyholder payables		—		1,190.4			—		—			—			1,190.4
Other current liabilities		20.1		1,034.7			307.0		0.5			—			1,362.3
Total current liabilities		20.1		2,225.1			307.0		0.5			—			2,552.7
Intercompany balances		1,417.5		(1,418.4	)		414.6		(413.7	)		—			—
Non-current liabilities		31.3		195.7			745.7		—			—			972.7
Total liabilities		1,468.9		1,002.4			1,467.3		(413.2	)		—			3,525.4
Total equity attributable to common shareholders		2,254.5		5,764.2			3,642.9		6,726.6			(11,661.6	)		6,726.6
Equity attributable to noncontrolling interests in consolidated entities		—		697.6			—		—			—			697.6
Total equity		2,254.5		6,461.8			3,642.9		6,726.6			(11,661.6	)		7,424.2
Total liabilities and equity		3,723.4		7,464.2			5,110.2		6,313.4			(11,661.6	)		10,949.6

			Non-
$ in millions	Guarantors		Guarantors			Issuer		Parent			Eliminations			Consolidated
As of December 31,2008
Assets held for policyholders		—		840.2			—		—			—			840.2
Other current assets		96.9		1,406.7			10.7		24.4			—			1,538.7
Total current assets		96.9		2,246.9			10.7		24.4			—			2,378.9
Goodwill		2,302.8		3,236.8			427.2		—			—			5,966.8
Investments in subsidiaries		718.2		2,201.7			4,081.3		5,658.5			(12,659.7	)		—
Other non-current assets		94.4		1,305.6			11.2		—			—			1,411.2
Total assets		3,212.3		8,991.0			4,530.4		5,682.9			(12,659.7	)		9,756.9
Policyholder payables		—		840.2			—		—			—			840.2
Other current liabilities		38.2		933.2			291.4		0.4			—			1,263.2
Total current liabilities		38.2		1,773.4			291.4		0.4			—			2,103.4
Intercompany balances		385.0		(768.7	)		390.8		(7.1	)		—			—
Non-current liabilities		33.2		162.1			862.0		—			—			1,057.3
Total liabilities		456.4		1,166.8			1,544.2		(6.7	)		—			3,160.7
Total equity attributable to common shareholders		2,755.9		6,917.5			2,986.2		5,689.6			(12,659.7	)		5,689.5
Equity attributable to noncontrolling interests in consolidated entities		—		906.7			—		—			—			906.7
Total equity		2,755.9		7,824.2			2,986.2		5,689.6			(12,659.7	)		6,596.2
Total liabilities and equity		3,212.3		8,991.0			4,530.4		5,682.9			(12,659.7	)		9,756.9

33

Condensed Consolidating Statements of Income

				Non-
$ in millions	Guarantors			Guarantors			Issuer			Parent			Eliminations			Consolidated
For the three months ended September 30, 2009
Total operating revenues		148.9			556.9			—			—			—			705.8
Total operating expenses		110.0			440.5			0.3			3.4			—			554.2
Operating income/(loss)		38.9			116.4			(0.3	)		(3.4	)		—			151.6
Equity in earnings of unconsolidated affiliates		0.3			6.9			32.8			99.8			(131.9	)		7.9
Other income/(expense)		(28.8	)		20.4			(11.5	)		8.8			—			(11.1	)
Income/(loss) before income taxes, including gains and losses attributable to noncontrolling interests		10.4			143.7			21.0			105.2			(131.9	)		148.4
Income tax provision		11.7			(62.3	)		6.9			—			—			(43.7	)
Net income, including gains and losses attributable to noncontrolling interests		22.1			81.4			27.9			105.2			(131.9	)		104.7
Losses attributable to the noncontrolling interests in consolidated entities, net		—			0.5			—			—			—			0.5
Net income attributable to common shareholders		22.1			81.9			27.9			105.2			(131.9	)		105.2

				Non-
$ in millions	Guarantors			Guarantors			Issuer			Parent			Eliminations			Consolidated
For the three months ended September 30, 2008
Total operating revenues		178.0			649.2			—			—			—			827.2
Total operating expenses		129.2			492.4			3.3			7.1			—			632.0
Operating income/(loss)		48.8			156.8			(3.3	)		(7.1	)		—			195.2
Equity in earnings of unconsolidated affiliates		21.6			47.4			78.2			138.4			(277.6	)		8.0
Other income/(expense)		(0.4	)		1.3			(19.3	)		0.5			—			(17.9	)
Income/(loss) before income taxes, including gains and losses attributable to noncontrolling interests		70.0			205.5			55.6			131.8			(277.6	)		185.3
Income tax provision		(8.6	)		(45.3	)		4.7			—			—			(49.2	)
Net income, including gains and losses attributable to noncontrolling interests		61.4			160.2			60.3			131.8			(277.6	)		136.1
Gains attributable to the noncontrolling interests in consolidated entities, net		—			(4.3	)		—			—			—			(4.3	)
Net income attributable to common shareholders		61.4			155.9			60.3			131.8			(277.6	)		131.8

34

				Non-
$ in millions	Guarantors			Guarantors			Issuer			Parent			Eliminations			Consolidated
For the nine months ended September 30, 2009
Total operating revenues		394.2			1,485.3			—			—			—			1,879.5
Total operating expenses		304.5			1,240.3			1.0			9.9			—			1,555.7
Operating income/(loss)		89.7			245.0			(1.0	)		(9.9	)		—			323.8
Equity in earnings of unconsolidated affiliates		15.0			47.0			83.9			214.8			(342.8	)		17.9
Other income/(expense)		(30.4	)		(128.7	)		(14.1	)		6.6			—			(166.6	)
Income/(loss) before income taxes, including gains and losses attributable to noncontrolling interests		74.3			163.3			68.8			211.5			(342.8	)		175.1
Income tax provision		(6.7	)		(81.1	)		(12.2	)		—			—			(100.0	)
Net income, including gains and losses attributable to noncontrolling interests		67.6			82.2			56.6			211.5			(342.8	)		75.1
Losses attributable to the noncontrolling interests in consolidated entities, net		—			136.5			—			—			—			136.5
Net income attributable to common shareholders		67.6			218.7			56.6			211.5			(342.8	)		211.6

				Non-
$ in millions	Guarantors			Guarantors			Issuer			Parent			Eliminations			Consolidated
For the nine months ended September 30, 2008
Total operating revenues		551.2			2,122.0			—			—			—			2,673.2
Total operating expenses		391.6			1,591.8			5.3			21.2			—			2,009.9
Operating income/(loss)		159.6			530.2			(5.3	)		(21.2	)		—			663.3
Equity in earnings of unconsolidated affiliates		54.5			119.5			259.3			471.0			(868.8	)		35.5
Other income/(expense)		(2.8	)		(9.9	)		(35.6	)		—			—			(48.3	)
Income/(loss) before income taxes, including gains and losses attributable to noncontrolling interests		211.3			639.8			218.4			449.8			(868.8	)		650.5
Income tax provision		(71.1	)		(127.1	)		(2.0	)		—			—			(200.2	)
Net income, including gains and losses attributable to noncontrolling interests		140.2			512.7			216.4			449.8			(868.8	)		450.3
Gains attributable to the noncontrolling interests in consolidated entities, net		—			(0.5	)		—			—			—			(0.5	)
Net income attributable to common shareholders		140.2			512.2			216.4			449.8			(868.8	)		449.8

Condensed Consolidating Statements of Cash Flows

				Non-
$ in millions	Guarantors			Guarantors		Issuer			Parent			Eliminations			Consolidated
For the nine months ended September 30, 2009
Net cash provided by operating activities		21.3			175.5		119.2			80.5			(262.5	)		134.0
Net cash used in investing activities		(12.4	)		28.5		—			(28.5	)		—			(12.4	)
Net cash provided by financing activities		—			112.4		(119.4	)		(52.1	)		262.5			203.4
Increase in cash and cash equivalents		8.9			316.4		(0.2	)		(0.1	)		—			325.0

				Non-
$ in millions	Guarantors			Guarantors			Issuer			Parent			Eliminations			Consolidated
For the nine months ended September 30, 2008
Net cash provided by operating activities		139.2			112.9			25.1			451.8			(391.0	)		338.0
Net cash used in investing activities		(142.7	)		136.8			81.8			(44.5	)		(81.9	)		(50.5	)
Net cash used in financing activities		—			(438.6	)		(57.5	)		(413.2	)		472.9			(436.4	)
Decrease in cash and cash equivalents		(3.5	)		(188.9	)		49.4			(5.9	)		—			(148.9	)

35

14. SUBSEQUENT EVENTS

     On October 16, 2009, the company declared a third quarter 2009 dividend of 10.25 cents per share, payable on December 2, 2009, to shareholders of record at the close of business on November 18, 2009.

     On October 19, 2009, the company announced that it entered into a definitive agreement to acquire Morgan Stanley’s retail asset management business, including Van Kampen Investments. The transaction was initially valued at $1.5 billion, including $500.0 million in cash and 44.1 million common shares, which will result in Morgan Stanley obtaining a 9.4% equity interest in the company. The transaction has been approved by the boards of directors of both companies and is expected to close in mid-2010, subject to customary regulatory, client and fund shareholder approvals.

     On October 29, 2009, a $33.8 million acquisition earn-out was paid to the former owners of W.L. Ross & Co., consisting of $6.5 million calculated at the April 3, 2009, earn-out measurement date and $27.3 million calculated at the October 3, 2009, earn-out measurement date. As a result of the transaction, goodwill was increased by this amount. The transaction also resulted in the remaining maximum contingent payment being reduced to $110 million.

     The company has evaluated its subsequent events through October 30, 2009, which represents the date the financial statements were issued.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

     The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes thereto, which appear elsewhere in this Report. Except for the historical financial information, this Report may include statements that constitute “forward-looking statements” under the United States securities laws. Forward-looking statements include information concerning possible or assumed future results of our operations, expenses, earnings, liquidity, cash flows and capital expenditures, industry or market conditions, assets under management, acquisition activities and the effect of completed acquisitions, debt levels and our ability to obtain additional financing or make payments on our debt, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, when used in this Report, the documents incorporated by reference herein or such other documents or statements, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” and any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

     Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission.

References

     In this Report, unless otherwise specified, the terms “we,” “our,” “us,” “company,” “Invesco,” and “Invesco Ltd.” refer to Invesco Ltd., a company incorporated in Bermuda, and its subsidiaries.

Executive Overview

     The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this management’s discussion and analysis supplements, and should be read in conjunction with, the Condensed Consolidated Financial Statements of Invesco Ltd. and its subsidiaries and the notes thereto contained elsewhere in this Report.

     Invesco is a leading independent global investment manager with offices in 20 countries. As of September 30, 2009, we managed $416.9 billion in assets for retail, institutional and high-net-worth investors around the world. By delivering the combined power of our distinctive worldwide investment management capabilities, Invesco provides a comprehensive array of enduring solutions for our clients. We have a significant presence in the institutional and retail segments of the investment management industry in North America, Europe and Asia-Pacific, with clients in more than 100 countries.

36

     Global equity markets improved in the three months ended September 30, 2009, with most major indices generating positive returns for the three months and year-to-date as illustrated in the table below:

	Three months ended			Nine months ended
Index	September 30, 2009			September 30, 2009
Dow Jones Industrial Average		15.82	%		13.49	%
S&P 500		15.61	%		19.26	%
NASDAQ Composite Index		15.91	%		35.59	%
S&P/TSX Composite (Canada)		10.61	%		30.04	%
FTSE 100		22.01	%		20.40	%
FTSE World Europe		18.57	%		26.82	%
Nikkei 225		2.29	%		16.11	%
MSCI Emerging Market Index		20.9	%		64.45	%
China SE Shanghai Composite		(5.75	%)		54.86	%
Barclays Capital U.S. Aggregate Bond Index		3.74	%		5.72	%

     After a very weak start to the year, global equity markets continued the rally that began in the final weeks of March. Leading economic indicators continued to suggest emersion from the recession and most equity markets around the world posted gains in each of July, August, and September, finishing the quarter with solid double digit returns. Share prices benefited from not only steady boosts in earnings estimates but also from improving risk tolerance lifting equity valuation multiples. Emerging markets continued to show some of the strongest growth with the MSCI Emerging Market Index returning 20.9% during the quarter.

     During the quarter, credit market conditions continued to strengthen as investors moved into riskier assets. Central bank commitments to keep official interest rates low exerted additional pressure on money market yields. Holders of U.S. Government debt overcame worries that foreign central banks would scale back purchases as strong demand from overseas investors for Treasury securities kept Government bond yields from rising. As a result, investors began to move out the yield curve in an effort to boost returns.

     Summary operating information is presented in the table below:

	Three months ended Sept 30,						Nine months ended Sept 30,
	2009			2008			2009			2008
Operating revenues	$	705.8m		$	827.2m		$	1,879.5m		$	2,673.2m
Net revenues(1)	$	534.8m		$	618.0m		$	1,414.7m		$	2,007.6m
Operating margin		21.5	%		23.6	%		17.2	%		24.8	%
Net operating margin(2)		29.9	%		32.7	%		24.4	%		34.7	%
Net income attributable to common shareholders	$	105.2m		$	131.8m		$	211.6m		$	449.8m
Diluted EPS	$	0.24		$	0.33		$	0.51		$	1.12
Average assets under management (in billions)	$	406.9		$	448.3		$	378.2		$	468.6

(1)	Net revenues are operating revenues less third-party distribution, service and advisory expenses plus our proportional share of the net revenues of our joint venture investments. See “Schedule of Non-GAAP Information” for the reconciliation of operating revenues to net revenues.
(2)	Net operating margin is net operating income divided by net revenues. See “Schedule of Non-GAAP Information” for the reconciliation of operating income to net operating income.

     On October 19, 2009, the company announced that it entered into a definitive agreement to acquire Morgan Stanley’s retail asset management business, including Van Kampen Investments. The transaction was initially valued at $1.5 billion, including $500.0 million in cash and 44.1 million common shares, which will result in Morgan Stanley obtaining a 9.4% equity interest in the company. The transaction has been approved by the boards of directors of both companies and is expected to close in mid-2010, subject to customary regulatory, client and fund shareholder approvals.

37

Investment Capabilities Performance Overview

     Invesco’s first strategic priority is to achieve strong investment performance over the long-term for our clients. Performance in our equities capabilities, as measured by the percentage of AUM ahead of benchmark and ahead of peer median, has generally been strong with some pockets of outstanding performance and some areas where we have been challenged. Within our equity asset class, U.S. Core, Continental European, and Global ex-U.S. and Emerging Markets have generally had strong relative performance versus competitors and versus benchmark over one-, three- and five-year periods. Investment performance in our U.S. Growth equities has lagged, while our one-year U.S. Value Equity performance improved significantly versus both benchmark and peers. On a one-year basis, U.K. equity performance has lagged against both competitors and benchmarks; however long-term performance remains strong. Within our fixed income asset class, the global fixed income products have had at least 62% of AUM ahead of benchmark and peers over one-, three-, and five-year periods. Our money market capability had at least 89% of AUM ahead of peers on a one-, three-, and five-year basis, while performance versus benchmark showed some improvement over the prior quarter.

		Benchmark Comparison									Peer Group Comparison
		% of AUM Ahead of									% of AUM In Top Half of
		Benchmark									Peer Group
		1yr			3yr			5yr			1yr			3yr			5yr
Equities	U.S. Core		70	%		96	%		96	%		89	%		85	%		90	%
	U.S. Growth		18	%		35	%		68	%		20	%		19	%		32	%
	U.S. Value		100	%		94	%		23	%		88	%		7	%		7	%
	Sector		88	%		77	%		73	%		57	%		60	%		57	%
	U.K.		7	%		91	%		93	%		7	%		89	%		94	%
	Canadian		59	%		2	%		25	%		57	%		23	%		23	%
	Asian		43	%		87	%		89	%		51	%		76	%		81	%
	Continental European		75	%		66	%		85	%		61	%		62	%		62	%
	Global		40	%		60	%		77	%		60	%		37	%		13	%
	Global Ex U.S. and Emerging Markets		94	%		95	%		95	%		95	%		98	%		98	%
Balanced	Balanced		75	%		50	%		60	%		72	%		41	%		47	%
Fixed Income	Money Market		73	%		74	%		71	%		89	%		95	%		95	%
	U.S. Fixed Income		65	%		59	%		69	%		48	%		63	%		63	%
	Global Fixed Income		70	%		62	%		80	%		74	%		76	%		77	%

Note: For most products the rankings are as of 9/30/09. Exceptions include institutional products (6/30/09) and Australian retail (8/31/09). Includes assets with a minimum one-year composite track record and populated benchmark return (for % assets ahead of benchmark) or peer group (for % assets in top half of peer group). AUM measured in the one-, three-, and five-year peer group rankings represents 68%, 67%, and 65% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one-, three-, and five-year basis represents 85%, 82%, and 76% of total Invesco AUM, respectively, as of 9/30/09. Excludes Invesco PowerShares, W.L. Ross & Co., Invesco Private Capital, non-discretionary direct real estate products and CLOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

38

  Results of Operations for the three months ended September 30, 2009, Compared with the three months ended September 30, 2008

  Assets Under Management

     AUM at September 30, 2009, were $416.9 billion (June, 30, 2009: $388.7 billion; September 30, 2008: $409.6 billion). The increase in AUM during the three months ended September 30, 2009, was due to increased market values, and a favorable movement in foreign exchange rates. Average AUM during the three months ended September 30, 2009, were $406.9 billion, compared to $448.3 billion for the three months ended September 30, 2008. Market gains led to a $27.4 billion increase in AUM during the period compared to a reduction of $29.6 billion in the comparative 2008 period. Foreign exchange rate movements led to an $0.8 billion increase in AUM during the period compared to an $11.0 billion decrease in the comparative 2008 period. Long-term net inflows during the period were $2.6 billion compared to long-term net outflows of $3.0 billion in the comparative 2008 period. Institutional money market net outflows were $2.6 billion during the period compared to $8.1 billion in the comparative 2008 period.

     Net revenue yield on AUM declined 2.5 basis points to 52.6 basis points in the three months ended September 30, 2009, from the three months ended September 30, 2008, level of 55.1 basis points, resulting from a 13.5% decline in net revenues and a 9.2% decline in average AUM from the three months ended September 30, 2008. Market driven changes in our asset mix significantly impact our net revenue yield calculation. Our equity AUM generally earn a higher net revenue rate than money market AUM. At September 30, 2009, equity AUM comprised 39.2% of our total AUM, a decline of 7.1% from 42.2% at September 30, 2008. During the three months ended September 30, 2009, our equity AUM increased in line with the increases in equity markets globally from June 30, 2009, whereas our institutional money market AUM decreased from June 30, 2009. Gross revenue yield on AUM declined 4.4 basis points to 70.1 basis points in the three months ended September 30, 2009, from the three months ended September 30, 2008, level of 74.5 basis points. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues (gross revenues) to net revenues.

     Changes in AUM were as follows:

$ in billions	2009			2008
June 30		388.7			461.3
Long-term inflows		19.4			16.8
Long-term outflows		(16.8	)		(19.8	)
Long-term net flows		2.6			(3.0	)
Net flows in money market funds		(2.6	)		(8.1	)
Market gains and losses/reinvestment		27.4			(29.6	)
Foreign currency translation		0.8			(11.0	)
September 30		416.9			409.6
Average long-term AUM		317.1			364.4
Average institutional money market AUM		89.8			83.9
Average AUM		406.9			448.3
Gross revenue yield on AUM(1)		70.1	bps		74.5	bps
Gross revenue yield on AUM before performance fees(1)		69.6	bps		72.8	bps
Net revenue yield on AUM(2)		52.6	bps		55.1	bps
Net revenue yield on AUM before performance fees(2)		52.1	bps		53.5	bps

(1)

Gross revenue yield on AUM is equal to annualized total operating revenues divided by average AUM, excluding joint venture (JV) AUM. Our share of the average AUM in the third quarter for our JVs in China was $3.9 billion (second quarter 2009: $3.6 billion; third quarter 2008: $3.9 billion). It is appropriate to exclude the average AUM of our JVs for purposes of computing gross revenue yield on AUM, because the revenues resulting from these AUM are not presented in our operating revenues. Under U.S. GAAP, our share of the pre-tax earnings of the JVs is recorded as equity in earnings of unconsolidated affiliates on our Condensed Consolidated Statements of Income.

(2)

Net revenue yield on AUM is equal to annualized net revenues divided by average AUM. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues.

39

  Our AUM by channel, by asset class, and by client domicile were as follows:

  AUM by Channel

										Private
										Wealth
$ in billions	Total			Retail			Institutional			Management
June 30, 2009 AUM(1)		388.7			169.0			205.9			13.8
Long-term inflows		19.4			14.5			3.7			1.2
Long-term outflows		(16.8	)		(10.1	)		(5.6	)		(1.1	)
Long-term net flows		2.6			4.4			(1.9	)		0.1
Net flows in money market funds		(2.6	)		—			(2.6	)		—
Market gains and losses/reinvestment		27.4			23.6			2.7			1.1
Foreign currency translation		0.8			0.1			0.7			—
September 30, 2009 AUM		416.9			197.1			204.8			15.0
June 30, 2008 AUM(1)		461.3			220.6			224.2			16.5
Long-term inflows		16.8			12.0			3.7			1.1
Long-term outflows		(19.8	)		(14.2	)		(4.6	)		(1.0	)
Long-term net flows		(3.0	)		(2.2	)		(0.9	)		0.1
Net flows in money market funds		(8.1	)		0.1			(8.2	)		—
Market gains and losses/reinvestment		(29.6	)		(23.2	)		(5.2	)		(1.2	)
Foreign currency translation		(11.0	)		(7.3	)		(3.7	)		—
September 30, 2008 AUM		409.6			188.0			206.2			15.4

  AUM by Asset Class

							Fixed						Money
$ in billions	Total			Equity			Income			Balanced			Market			Alternatives(2)
June 30, 2009 AUM(1)		388.7			141.1			68.4			36.3			94.4			48.5
Long-term inflows		19.4			10.5			5.0			2.1			0.3			1.5
Long-term outflows		(16.8	)		(8.5	)		(3.0	)		(1.9	)		(0.6	)		(2.8	)
Long-term net flows		2.6			2.0			2.0			0.2			(0.3	)		(1.3	)
Net flows in money market funds		(2.6	)		—			—			—			(2.6	)		—
Market gains and losses/reinvestment		27.4			20.1			2.9			3.2			—			1.2
Foreign currency translation		0.8			0.1			—			0.6			0.1			—
September 30, 2009 AUM		416.9			163.3			73.3			40.3			91.6	(3)		48.4
June 30, 2008 AUM(1)		461.3			207.1			71.2			35.1			89.8			58.1
Long-term inflows		16.8			9.2			3.1			2.0			0.8			1.7
Long-term outflows		(19.8	)		(12.4	)		(2.4	)		(2.2	)		(0.7	)		(2.1	)
Long-term net flows		(3.0	)		(3.2	)		0.7			(0.2	)		0.1			(0.4	)
Net flows in money market funds		(8.1	)		—			—			—			(8.1	)		—
Market gains and losses/reinvestment		(29.6	)		(23.9	)		(2.8	)		(2.5	)		—			(0.4	)
Foreign currency translation		(11.0	)		(7.2	)		(1.1	)		(1.7	)		(0.1	)		(0.9	)
September 30, 2008 AUM		409.6			172.8			68.0			30.7			81.7			56.4

(1)	The beginning balances were adjusted to reflect certain asset reclassifications.
(2)	The alternatives asset class includes financial structures, absolute return, real estate, private equity, asset allocation, portable alpha and multiple asset strategies.
(3)	Ending Money Market AUM includes $87.2 billion in institutional money market AUM and $4.4 billion in retail money market AUM.

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  AUM by Client Domicile

													Continental
$ in billions	Total			U.S.			Canada			U.K.			Europe			Asia
June 30, 2009 AUM(1)		388.7			243.6			25.3			68.3			26.7			24.8
Long-term inflows		19.4			8.8			0.3			5.6			2.6			2.1
Long-term outflows		(16.8	)		(8.2	)		(1.2	)		(2.4	)		(3.1	)		(1.9	)
Long-term net flows		2.6			0.6			(0.9	)		3.2			(0.5	)		0.2
Net flows in money market funds		(2.6	)		(1.1	)		(0.1	)		(0.2	)		(0.1	)		(1.1	)
Market gains and losses/reinvestment		27.4			11.1			2.3			9.3			2.4			2.3
Foreign currency translation		0.8			—			2.0			(2.1	)		0.3			0.6
September 30, 2009 AUM		416.9			254.2			28.6			78.5			28.8			26.8
June 30, 2008 AUM(1)		461.3			280.2			38.9			80.2			31.0			31.0
Long-term inflows		16.8			8.8			0.5			4.4			1.9			1.2
Long-term outflows		(19.8	)		(10.5	)		(2.1	)		(2.6	)		(2.8	)		(1.8	)
Long-term net flows		(3.0	)		(1.7	)		(1.6	)		1.8			(0.9	)		(0.6	)
Net flows in money market funds		(8.1	)		(7.3	)		—			(0.4	)		—			(0.4	)
Market gains and losses/reinvestment		(29.6	)		(15.1	)		(2.4	)		(5.1	)		(3.6	)		(3.4	)
Foreign currency translation		(11.0	)		—			(1.8	)		(7.0	)		(1.6	)		(0.6	)
September 30, 2008 AUM		409.6			256.1			33.1			69.5			24.9			26.0

(1) The beginning balances were adjusted to reflect certain asset reclassifications.

  Operating Revenues and Net Revenues

     Operating revenues decreased by $121.4 million (14.7%) in the three months ended September 30, 2009, to $705.8 million (September 30, 2008: $827.2 million). Net revenues decreased by $83.2 million (13.5%) in the three months ended September 30, 2009, to $534.8 million (September 30, 2008: $618.0 million). Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of net revenues from joint venture arrangements. See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues. A significant portion of our business and managed AUM are based outside of the U.S. The strengthening of the U.S. dollar against other currencies, primarily the Pound Sterling, Canadian Dollar and Euro, have impacted our reported revenues for the three months ended September 30, 2009, as compared to the three months ended September 30, 2008. The impact of foreign exchange rate movements resulted in $36.9 million (30.4%) of the decline in operating revenues during the three months ended September 30, 2009. Additionally, our revenues are directly influenced by the level and composition of our AUM as more fully discussed below. Movements in global capital market levels, net new business inflows (or outflows) and changes in the mix of investment products between asset classes and geographies may materially affect our revenues from period to period.

     The main categories of revenues, and the dollar and percentage change between the periods, were as follows:

	Three months ended
	September 30,
$ in millions	2009			2008			$ Change			% Change
Investment management fees		570.3			664.9			(94.6	)		(14.2	)%
Service and distribution fees		111.8			129.4			(17.6	)		(13.6	)%
Performance fees		4.3			18.1			(13.8	)		(76.2	)%
Other		19.4			14.8			4.6			31.1	%
Total operating revenues		705.8			827.2			(121.4	)		(14.7	)%
Third-party distribution, service and advisory expenses		(183.5	)		(220.9	)		(37.4	)		(16.9	)%
Proportional share of revenues, net of third-party distribution expenses, from joint venture investments		12.5			11.7			0.8			6.8	%
Net revenues		534.8			618.0			(83.2	)		(13.5	)%

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  Investment Management Fees

     Investment management fees are derived from providing professional services to manage client accounts and include fees earned from retail mutual funds, unit trusts, investment companies with variable capital (ICVCs), exchange-traded funds, investment trusts and institutional and private wealth management advisory contracts. Investment management fees for products offered in the retail distribution channel are generally calculated as a percentage of the daily average asset balances and therefore vary as the levels of AUM change resulting from inflows, outflows and market movements. Investment management fees for products offered in the institutional and private wealth management distribution channels are calculated in accordance with the underlying investment management contracts and also vary in relation to the level of client assets managed.

     Investment management fees decreased by $94.6 million (14.2%) in the three months ended September 30, 2009, to $570.3 million (September 30, 2008: $664.9 million) due to decreases in average AUM, changes in the mix of AUM between asset classes and foreign exchange rate movement. Average AUM for the three months ended September 30, 2009, were $406.9 billion (September 30, 2008: $448.3 billion). Average long-term AUM, which generally earn higher fee rates than money market AUM, for the three months ended September 30, 2009, were $317.1 billion (September 30, 2008: $364.4 billion), while average institutional money market AUM increased 7.0% to $89.8 billion at September 30, 2009, from $83.9 billion for the three months ended September 30, 2008.

  Service and Distribution Fees

     Service fees are generated through fees charged to cover several types of expenses, including fund accounting fees and other maintenance costs for mutual funds, unit trusts and ICVCs, and administrative fees earned from closed-ended funds. Service fees also include transfer agent fees, which are fees charged to cover the expense of processing client share purchases and redemptions, call center support and client reporting. U.S. distribution fees can include 12b-1 fees earned from certain mutual funds to cover allowable sales and marketing expenses for those funds and also include asset-based sales charges paid by certain mutual funds for a period of time after the sale of those funds. Distribution fees typically vary in relation to the amount of client assets managed. Generally, retail products offered outside of the U.S. do not generate a separate distribution fee, as the quoted management fee rate is inclusive of these services.

     In the three months ended September 30, 2009, service and distribution fees decreased by $17.6 million (13.6%) to $111.8 million (September 30, 2008: $129.4 million) due to decreases in average AUM during the period.

  Performance Fees

     Performance fee revenues are generated on certain management contracts when performance hurdles are achieved. Such fee revenues are recorded in operating revenues as of the performance measurement date, when the contractual performance criteria have been met and when the outcome of the transaction can be measured reliably in accordance with Method 1 of ASC Topic 605-20-S99, “Revenue Recognition — Services — SEC Materials.” Cash receipt of earned performance fees occurs after the measurement date. The performance measurement date is defined in each contract in which incentive and performance fee revenue agreements are in effect, and therefore we have performance fee arrangements that include monthly, quarterly and annual measurement dates. Given the uniqueness of each transaction, performance fee contracts are evaluated on an individual basis to determine if revenues can and should be recognized. Performance fees are not recorded if there are any future performance contingencies. If performance arrangements require repayment of the performance fee for failure to perform during the contractual period, then performance fee revenues are recognized no earlier than the expiration date of these terms. Performance fees will fluctuate from period to period and may not correlate with general market changes, since most of the fees are driven by relative performance to the respective benchmark rather than by absolute performance.

     In the three months ended September 30, 2009, performance fees decreased by $13.8 million (76.2%) to $4.3 million (September 30, 2008: $18.1 million). The performance fees generated during the three months ended September 30, 2009, arose primarily in the U.K. and in our real estate group. Over half of the performance fees recognized in the three months ended September 30, 2008, were generated by our quantitative strategies group. The remaining amount came from several other areas of the company.

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  Other Revenues

     Other revenues include fees derived primarily from transaction commissions earned upon the sale of new investments into certain of our retail funds and fees earned upon the completion of transactions in our real estate and private equity assets groups. Real estate transaction fees are derived from commissions earned through the buying and selling of properties. Private equity transaction fees include commissions associated with the restructuring of and fees from providing advice to portfolio companies held by the funds. The measurement date in which these transaction fees are recorded is the date on which the transaction is legally closed. Other revenues also include the revenues of consolidated investment products.

     In the three months ended September 30, 2009, other revenues increased by $4.6 million (31.1%) to $19.4 million (September 30, 2008: $14.8 million) driven by increases in transaction fees within our real estate operations.

  Third-Party Distribution, Service and Advisory Expenses

     Third-party distribution, service and advisory expenses include renewal commissions paid to independent financial advisors for as long as the clients’ assets are invested and are payments for the servicing of client accounts. Renewal commissions are calculated based upon a percentage of the AUM value. Third-party distribution expenses also include the amortization of upfront commissions paid to broker-dealers for sales of fund shares with a contingent deferred sales charge (a charge levied to the investor for client redemption of AUM within a certain contracted period of time). The distribution commissions are amortized over the redemption period. Also included in third-party distribution, service and advisory expenses are sub-transfer agency fees that are paid to third parties for processing client share purchases and redemptions, call center support and client reporting. Third-party distribution, service and advisory expenses may increase or decrease at a rate different from the rate of change in service and distribution fee revenues due to the inclusion of distribution, service and advisory expenses for the U.K. and Canada, where the related revenues are recorded as investment management fee revenues, as noted above.

     Third-party distribution, service and advisory expenses decreased by $37.4 million (16.9%) in the three months ended September 30, 2009, to $183.5 million (September 30, 2008: $220.9 million), consistent with the declines in investment management and service and distribution fee revenues.

Proportional share of revenues, net of third-party distribution expenses, from joint venture investments

     Management believes that the addition of our proportional share of revenues, net of third-party distribution expenses, from joint venture arrangements should be added to operating revenues to arrive at net revenues, as it is important to evaluate the contribution to the business that our joint venture arrangements are making. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of net revenues. The company’s most significant joint venture arrangement is our 49.0% investment in Invesco Great Wall Fund Management Company Limited (the “Invesco Great Wall” joint venture).

     Our proportional share of revenues, net of third-party distribution expenses increased by $0.8 million (6.8%) to $12.5 million in the three months ended September 30, 2009 (September 30, 2008: $11.7 million), driven by the timing of the positive changes in average AUM during the period in the Invesco Great Wall joint venture. Our share of the Invesco Great Wall joint venture’s average AUM in the three months ended September 30, 2009, was $3.9 billion (September 30, 2008: $3.9 billion).

  Operating Expenses

     During the three months ended September 30, 2009, operating expenses decreased by $77.8 million (12.3%) to $554.2 million (September 30, 2008: $632.0 million). As discussed above, a significant portion of our business and managed AUM are based outside of the U.S. The strengthening of the U.S. dollar against other currencies during the quarter, primarily the Pound Sterling, Canadian dollar and Euro, have impacted our reported operating expenses in the three months ended September 30, 2009, as compared to the three months ended September 30, 2008. The impact of foreign exchange rate movements resulted in $23.5 million (30.2%) of the decline in operating expenses during the three months ended September 30, 2009.

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     The main categories of operating expenses, and the dollar and percentage changes between periods, are as follows:

	Three months ended
	September 30,
$ in millions	2009		2008		$ Change			% Change
Employee compensation		238.9		264.1		(25.2	)		(9.5	)%
Third-party distribution, service and advisory		183.5		220.9		(37.4	)		(16.9	)%
Marketing		27.7		34.8		(7.1	)		(20.4	)%
Property, office and technology		63.0		50.5		12.5			24.8	%
General and administrative		41.1		61.7		(20.6	)		(33.4	)%
Total operating expenses		554.2		632.0		(77.8	)		(12.3	)%

     The table below sets forth these cost categories as a percentage of total operating expenses and operating revenues, which we believe provides useful information as to the relative significance of each type of cost:

Three months ended:

			% of Total			% of					% of Total			% of
	Sept 30,		Operating			Operating			Sept 30,		Operating			Operating
$ in millions	2009		Expenses			Revenues			2008		Expenses			Revenues
Employee compensation		238.9		43.1	%		33.8	%		264.1		41.8	%		31.9	%
Third-party distribution, service and advisory		183.5		33.1	%		26.0	%		220.9		35.0	%		26.7	%
Marketing		27.7		5.0	%		3.9	%		34.8		5.5	%		4.2	%
Property, office and technology		63.0		11.4	%		8.9	%		50.5		8.0	%		6.1	%
General and administrative		41.1		7.4	%		5.8	%		61.7		9.8	%		7.5	%
Total operating expenses		554.2		100.0	%		78.5	%		632.0		100.0	%		76.4	%

  Employee Compensation

     Employee compensation includes salary, cash bonuses and share-based payment plans designed to attract and retain the highest caliber employees. Employee compensation decreased $25.2 million (9.5%) to $238.9 million in the three months ended September 30, 2009, (September 30, 2008: $264.1 million) due to decreases in base salaries, staff bonuses, payroll taxes, and the impact of foreign exchange rate movement. Headcount at September 30, 2009, was 4,908 (September 30, 2008: 5,354).

  Third-Party Distribution, Service and Advisory Expenses

     Third-party distribution, service and advisory expenses are discussed above in the operating and net revenues section.

  Marketing

     Marketing expenses include marketing support payments, which are payments made to distributors of certain of our retail products over and above the 12b-1 distribution payments. These fees are contracted separately with each distributor. Marketing expenses also include the cost of direct advertising of our products through trade publications, television and other media, and public relations costs, such as the marketing of the company’s products through conferences or other sponsorships, and the cost of marketing-related employee travel.

     Marketing expenses decreased by $7.1 million (20.4%) in the three months ended September 30, 2009, to $27.7 million (September 30, 2008: $34.8 million) primarily due to reductions in marketing support payments, advertising and promotional expenses as compared to the three months ended September 30, 2008.

  Property, Office and Technology

     Property, office and technology expenses include rent and utilities for our various leased facilities, depreciation of company-owned property and capitalized computer equipment costs, minor non-capitalized computer equipment and software purchases and related maintenance payments, and costs related to externally provided operations, technology, and other back office management services.

44

     Property, office and technology expenses increased by $12.5 million (24.8%) to $63.0 million in the three months ended September 30, 2009 (September 30, 2008: $50.5 million), due primarily to $12.0 million in charges relating to vacating leased property, including our Denver property. The three months ended September 30, 2008, included a downward adjustment in rent costs for sublet office property totaling $3.3 million.

  General and Administrative

     General and administrative expenses include professional services costs, such as information service subscriptions, consulting fees, professional insurance costs, audit, tax and legal fees, non-marketing related employee travel expenditures, recruitment and training costs, and the amortization of certain intangible assets.

     General and administrative expenses decreased by $20.6 million (33.4%) to $41.1 million in the three months ended September 30, 2009 (September 30, 2008: $61.7 million), due primarily to reduced travel and entertainment expenses and general expense management measures during the three months ended September 30, 2009.

  Operating Income, Net Operating Income, Operating Margin and Net Operating Margin

     Operating income decreased by $43.6 million (22.3%) to $151.6 million in the three months ended September 30, 2009 (September 30, 2008: $195.2 million). Operating margin (operating income divided by operating revenues) was 21.5% in the three months ended September 30, 2009, down from 23.6% in the three months ended September 30, 2008. Net operating income (operating income plus our proportional share of the operating income from joint venture arrangements) decreased by $42.4 million (21.0%) to $159.8 million in the three months ended September 30, 2009, from $202.2 million in the three months ended September 30, 2008. Net operating margin is equal to net operating income divided by net revenues. Net revenues are equal to operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of the net revenues from our joint venture arrangements. Net operating margin decreased to 29.9% in the three months ended September 30, 2009, from 32.7% in the three months ended September 30, 2008. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues, a reconciliation of operating income to net operating income and additional important disclosures regarding net revenues, net operating income and net operating margins.

  Other Income and Expenses

     Equity in earnings of unconsolidated affiliates decreased by $0.1 million (1.3%) to $7.9 million in the three months ended September 30, 2009 (September 30, 2008: $8.0 million), resulting primarily from declines in our share of the pre-tax losses of our partnership investments.

     Interest income decreased by $6.3 million (78.8%) to $1.7 million in the three months ended September 30, 2009 (September 30, 2008: $8.0 million), as a result of significantly lower interest rates during the period. The decrease in yields was consistent with market direction during the period. Interest expense decreased by $1.4 million (7.7%) to $16.9 million in the three months ended September 30, 2009 (September 30, 2008: $18.3 million), resulting from a lower average debt balance during the three months ended September 30, 2009, versus the comparative period.

     Other gains and losses, net were a net gain of $2.0 million in the three months ended September 30, 2009, as compared to a net loss of $10.4 million in the three months ended September 30, 2008. Included in other gains and losses is a net gain of $2.3 million realized upon the disposal of other investments (2008: $1.1 million net gain). In the three months ended September 30, 2009, we benefited from $0.5 million in net foreign exchange gains; whereas in the three months ended September 30, 2008 we incurred $2.1 million in net foreign exchange losses. Included in other losses are $0.8 million of credit-related other-than-temporary impairment charges related to the company’s investments in CLO products (2008: $9.4 million). The CLO impairment arose principally from adverse changes in the timing of estimated cash flows used in the valuation models.

     Included in other income and expenses are gains and losses of consolidated investment products, net, which are driven by realized and unrealized gains and losses of underlying investments held by consolidated funds. The consolidation of investment products during the three months ended September 30, 2009, resulted in a decline in operating income of $3.2 million, non-operating gains of $2.1 million, and losses attributable to noncontrolling interests of $0.8 million.

     Net gains of consolidated investment products for the three months ended September 30, 2008, were $2.8 million, and are largely offset by noncontrolling interests of consolidated entities, net of tax, of $4.3 million.

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  Income Tax Expense

     Our subsidiaries operate in several taxing jurisdictions around the world, each with its own statutory income tax rate. As a result, our effective tax rate will vary from year to year depending on the mix of the profits and losses of our subsidiaries. The majority of our profits are earned in the U.S., Canada and the U.K. The current U.K. statutory tax rate is 28%, the Canadian statutory tax rate is 33% and the U.S. Federal statutory tax rate is 35%.

     Our effective tax rate, excluding noncontrolling interests in consolidated entities, for the three months ended September 30, 2009, was 29.3%, up from 27.2% for the three months ended September 30, 2008. The rate increase was primarily due to the mix of pre-tax income and additional tax expense necessary to reconcile the provision to the tax returns as filed, partially offset by the release of an unremitted earnings deferred tax liability as a result of a change in U.K. tax law during the quarter. The rate increase was also partially offset by the release of $11.9 million of provisions for uncertain tax positions during the three months ended September 30, 2009 (September 30, 2008: release of $9.9 million).

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  Results of Operations for the Nine months ended September 30, 2009, Compared with the Nine months ended September 30, 2008

  Assets Under Management

     AUM at September 30, 2009, were $416.9 billion (September 30, 2008: $409.6 billion). The increase in AUM during the nine months ended September 30, 2009, was due increased market values, a favorable movement in foreign exchange rates, and net inflows in long-term and institutional money market funds. Average AUM during the nine months ended September 30, 2009, were $378.2 billion, compared to $468.6 billion for the nine months ended September 30, 2008. Market gains led to a $35.9 billion increase in AUM during the period compared to a reduction of $69.1 billion in the comparative 2008 period. Foreign exchange rate movements led to a $9.8 billion increase in AUM during the period compared to a $9.9 billion decrease in the comparative 2008 period. Long-term net inflows during the period were $6.3 billion compared to long-term net outflows of $17.5 billion in the comparative 2008 period. Institutional money market net inflows were $7.7 billion during the period compared to $6.0 billion in the comparative 2008 period.

     Net revenue yield on AUM declined 7.2 basis points to 49.9 basis points in the nine months ended September 30, 2009, from the nine months ended September 30, 2008, level of 57.1 basis points, resulting from a 29.5% decline in net revenues and a 19.3% decline in average AUM. Market driven changes in our asset mix significantly impact our net revenue yield calculation. Our equity AUM generally earn a higher net revenue rate than money market AUM. At September 30, 2009, equity AUM comprised 39.2% of our total AUM, a decline of 7.1% from 42.2% at September 30, 2008. During the nine months ended September 30, 2009, our equity AUM decreased in line with the decline in equity markets globally from September 30, 2008, whereas our institutional money market AUM increased from September 30, 2008. Gross revenue yield on AUM declined 10.0 basis points to 66.9 basis points in the nine months ended September 30, 2009, from the nine months ended September 30, 2008, level of 76.9 basis points. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues (gross revenues) to net revenues.

     Changes in AUM were as follows:

$ in billions	2009			2008
December 31		357.2			500.1
Long-term inflows		51.8			57.2
Long-term outflows		(45.5	)		(74.7	)
Long-term net flows		6.3			(17.5	)
Net flows in money market funds		7.7			6.0
Market gains and losses/reinvestment		35.9			(69.1	)
Foreign currency translation		9.8			(9.9	)
September 30		416.9			409.6
Average long-term AUM		289.4			387.5
Average institutional money market AUM		88.8			81.1
Average AUM		378.2			468.6
Gross revenue yield on AUM(1)		66.9	bps		76.9	bps
Gross revenue yield on AUM before performance fees(1)		66.1	bps		75.4	bps
Net revenue yield on AUM(2)		49.9	bps		57.1	bps
Net revenue yield on AUM before performance fees(2)		49.1	bps		55.7	bps

(1)

Gross revenue yield on AUM is equal to annualized total operating revenues divided by average AUM, excluding joint venture (JV) AUM. Our share of the average AUM in the first nine months of 2009 for our JVs in China was $3.6 billion (first nine months of 2008: $5.0 billion). It is appropriate to exclude the average AUM of our JVs for purposes of computing gross revenue yield on AUM, because the revenues resulting from these AUM are not presented in our operating revenues. Under U.S. GAAP, our share of the pre-tax earnings of the JVs is recorded as equity in earnings of unconsolidated affiliates on our Condensed Consolidated Statements of Income.

(2)

Net revenue yield on AUM is equal to annualized net revenues divided by average AUM. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenue.

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     Our AUM by channel, by asset class, and by client domicile were as follows:

     AUM by Channel

										Private
										Wealth
$ in billions	Total			Retail			Institutional			Management
December 31, 2008 AUM(1)		357.2			149.3			194.6			13.3
Long-term inflows		51.8			36.5			11.1			4.2
Long-term outflows		(45.5	)		(27.5	)		(14.0	)		(4.0	)
Long-term net flows		6.3			9.0			(2.9	)		0.2
Net flows in money market funds		7.7			(0.2	)		7.9			—
Market gains and losses/reinvestment		35.9			30.7			3.7			1.5
Foreign currency translation		9.8			8.3			1.5			—
September 30, 2009 AUM		416.9			197.1			204.8			15.0
December 31, 2007 AUM(1)		500.1			259.5			223.1			17.5
Long-term inflows		57.2			40.2			13.4			3.6
Long-term outflows		(74.7	)		(50.2	)		(21.0	)		(3.5	)
Long-term net flows		(17.5	)		(10.0	)		(7.6	)		0.1
Net flows in money market funds		6.0			0.2			5.8			—
Market gains and losses/reinvestment		(69.1	)		(53.8	)		(13.1	)		(2.2	)
Foreign currency translation		(9.9	)		(7.9	)		(2.0	)		—
September 30, 2008 AUM		409.6			188.0			206.2			15.4

     AUM by Asset Class

							Fixed						Money
$ in billions	Total			Equity			Income			Balanced			Market			Alternatives(2)
December 31, 2008 AUM(1)		357.2			127.6			61.5			32.8			84.2			51.1
Long-term inflows		51.8			24.6			14.3			6.5			1.9			4.5
Long-term outflows		(45.5	)		(22.0	)		(8.9	)		(6.2	)		(2.5	)		(5.9	)
Long-term net flows		6.3			2.6			5.4			0.3			(0.6	)		(1.4	)
Net flows in money market funds		7.7			—			—			—			7.7			—
Market gains and losses/reinvestment		35.9			27.2			5.1			5.2			0.1			(1.7	)
Foreign currency translation		9.8			5.9			1.3			2.0			0.2			0.4
September 30, 2009 AUM		416.9			163.3			73.3			40.3			91.6	(3)		48.4
December 31, 2007 AUM(1)		500.1			249.6			75.0			38.4			75.1			62.0
Long-term inflows		57.2			31.4			10.4			6.8			2.8			5.8
Long-term outflows		(74.7	)		(43.1	)		(14.3	)		(7.5	)		(2.6	)		(7.2	)
Long-term net flows		(17.5	)		(11.7	)		(3.9	)		(0.7	)		0.2			(1.4	)
Net flows in money market funds		6.0			—			—			—			6.0			—
Market gains and losses/reinvestment		(69.1	)		(58.0	)		(2.3	)		(5.6	)		0.5			(3.7	)
Foreign currency translation		(9.9	)		(7.1	)		(0.8	)		(1.4	)		(0.1	)		(0.5	)
September 30, 2008 AUM		409.6			172.8			68.0			30.7			81.7			56.4

(1)	The beginning balances were adjusted to reflect certain asset reclassifications.
(2)	The alternatives asset class includes financial structures, absolute return, real estate, private equity, asset allocation, portable alpha and multiple asset strategies.
(3)	Ending Money Market AUM includes $87.2 billion in institutional money market AUM and $4.4 billion in retail money market AUM.

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  AUM by Client Domicile

													Continental
$ in billions	Total			U.S.			Canada			U.K.			Europe			Asia
December 31, 2008 AUM(1)		357.2			232.5			24.1			56.7			22.4			21.5
Long-term inflows		51.8			25.0			1.5			13.6			6.4			5.3
Long-term outflows		(45.5	)		(23.9	)		(3.7	)		(5.4	)		(7.1	)		(5.4	)
Long-term net flows		6.3			1.1			(2.2	)		8.2			(0.7	)		(0.1	)
Net flows in money market funds		7.7			5.2			—			(0.1	)		3.2			(0.6	)
Market gains and losses/reinvestment		35.9			15.4			3.4			8.7			3.0			5.4
Foreign currency translation		9.8			—			3.3			5.0			0.9			0.6
September 30, 2009 AUM		416.9			254.2			28.6			78.5			28.8			26.8
December 31, 2007 AUM(1)		500.1			290.5			46.6			90.0			36.1			36.9
Long-term inflows		57.2			27.8			2.1			14.3			7.7			5.3
Long-term outflows		(74.7	)		(35.6	)		(8.0	)		(7.8	)		(13.8	)		(9.5	)
Long-term net flows		(17.5	)		(7.8	)		(5.9	)		6.5			(6.1	)		(4.2	)
Net flows in money market funds		6.0			2.4			0.1			(0.1	)		0.8			2.8
Market gains and losses/reinvestment		(69.1	)		(29.0	)		(4.9	)		(19.7	)		(5.8	)		(9.7	)
Foreign currency translation		(9.9	)		—			(2.8	)		(7.2	)		(0.1	)		0.2
September 30, 2008 AUM		409.6			256.1			33.1			69.5			24.9			26.0

(1) The beginning balances were adjusted to reflect certain asset reclassifications.

  Operating Revenues and Net Revenues

     Operating revenues decreased by $793.7 million (29.7%) in the nine months ended September 30, 2009, to $1,879.5 million (September 30, 2008: $2,673.2 million). Net revenues decreased by $592.9 million (29.5%) in the nine months ended September 30, 2009, to $1,414.7 million (September 30, 2008: $2,007.6 million). Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of net revenues from joint venture arrangements. See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues. A significant portion of our business and managed AUM are based outside of the U.S. The strengthening of the U.S. dollar against other currencies, primarily the Pound Sterling, Canadian Dollar, and Euro have impacted our reported revenues for the nine months ended September 30, 2009, as compared to the nine months ended September 30, 2008. The impact of foreign exchange rate movements resulted in $184.8 million (23.3%) of the decline in operating revenues during the nine months ended September 30, 2009. Additionally, our revenues are directly influenced by the level and composition of our AUM as more fully discussed below. Movements in global capital market levels, net new business inflows (or outflows) and changes in the mix of investment products between asset classes and geographies may materially affect our revenues from period to period.

     The main categories of revenues, and the dollar and percentage change between the periods, were as follows:

	Nine months ended
	September 30,
$ in millions	2009			2008			$ Change%			Change
Investment management fees		1,508.4			2,139.3			(630.9	)		(29.5	)%
Service and distribution fees		301.2			411.1			(109.9	)		(26.7	)%
Performance fees		23.2			51.3			(28.1	)		(54.8	)%
Other		46.7			71.5			(24.8	)		(34.7	)%
Total operating revenues		1,879.5			2,673.2			(793.7	)		(29.7	)%
Third-party distribution, service and advisory expenses		(498.0	)		(712.9	)		(214.9	)		(30.1	)%
Proportional share of revenues, net of third-party distribution expenses, from joint venture investments		33.2			47.3			(14.1	)		(29.8	)%
Net revenues		1,414.7			2,007.6			(592.9	)		(29.5	)%

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  Investment Management Fees

     Investment management fees decreased by $630.9 million (29.5%) in the nine months ended September 30, 2009, to $1,508.4 million (September 30, 2008: $2,139.3 million) due to decreases in average AUM, changes in the mix of AUM between asset classes and foreign exchange rate movement. Average AUM for the nine months ended September 30, 2009, were $378.2 billion (September 30, 2008: $468.6 billion). Average long-term AUM, which generally earn higher fee rates than money market AUM, for the nine months ended September 30, 2009, were $289.4 billion (September 30, 2008: $387.5 billion), while average institutional money market AUM increased (9.5%) to $88.8 billion at September 30, 2009, from $81.1 billion for the nine months ended September 30, 2008.

  Service and Distribution Fees

     In the nine months ended September 30, 2009, service and distribution fees decreased by $109.9 million (26.7%) to $301.2 million (September 30, 2008: $411.1 million) due to decreases in average AUM during the period.

  Performance Fees

     In the nine months ended September 30, 2009, performance fees decreased by $28.1 million (54.8%) to $23.2 million (September 30, 2008: $51.3 million). The performance fees generated during the nine months ended September 30, 2009, arose primarily in the U.K. and in the U.S. quantitative equities group. The performance fees generated during the nine months ended September 30, 2008, arose primarily in the U.S. quantitative equities and U.S. real estate groups and in the U.K.

  Other Revenues

     In the nine months ended September 30, 2009, other revenues decreased by $24.8 million (34.7%) to $46.7 million (September 30, 2008: $71.5 million) driven by decreases in sales volumes of funds subject to front-end commissions and lower transaction fees within our real estate and private equity business.

  Third-Party Distribution, Service and Advisory Expenses

     Third-party distribution, service and advisory expenses decreased by $214.9 million (30.1%) in the nine months ended September 30, 2009, to $498.0 million (September 30, 2008: $712.9 million), consistent with the declines in investment management and service and distribution fee revenues.

  Proportional share of revenues, net of third-party distribution expenses, from joint venture investments

     Our proportional share of revenues, net of third-party distribution expenses decreased by $14.1 million (29.8%) to $33.2 million in the nine months ended September 30, 2009 (September 30, 2008: $47.3 million), driven by the decline in average AUM during the period in the Invesco Great Wall joint venture. Our proportional share of the Invesco Great Wall joint venture’s average AUM at September 30, 2009, was $3.6 billion (September 30, 2008: $5.0 billion). The decline from prior period reflects the increased volatility of equity markets in this region during the nine months ended September 30, 2009.

  Operating Expenses

     During the nine months ended September 30, 2009, operating expenses decreased by $454.2 million (22.6%) to $1,555.7 million (September 30, 2008: $2,009.9 million). As discussed above, a significant portion of our business and managed AUM are based outside of the U.S. The strengthening of the U.S. dollar against other currencies, primarily the Pound Sterling, Canadian dollar, and Euro have impacted our reported operating expenses in the nine months ended September 30, 2009, as compared to the nine months ended September 30, 2008. The impact of foreign exchange rate movements resulted in $133.0 million (29.3%) of the decline in operating expenses during the nine months ended September 30, 2009.

     The company continued to apply a disciplined approach to expense management consistent with previously announced expense guidance. Through the nine months ended September 30, 2009, despite the impact of foreign exchange and market movements, we are running approximately $27 million under our total expenses discussed in the guidance. We forecasted $2,110 million in operating expenses for 2009, assuming flat markets from December 31, 2008, and no change in foreign exchange rates. Total operating expenses for the nine months ended September 30, 2009, were $1,555.7 million, versus a forecasted $1,583 million in expenses for the nine

50

months ended September 30, 2009. Despite changes in market valuations and foreign exchange, we are generally tracking to this original expense guidance. Any variance from this guidance would largely be due to market-related distribution expenses. Additionally, we may incur acquisition-related fees of approximately $5 million in the three months ended December 31, 2009.

     Although markets have somewhat improved, expense management will be a continued focus for our firm. Consistent with our strategy of building a global operating platform, we have taken steps to reallocate certain transfer agency work from Denver to both our Houston and Prince Edward Island locations. As a result, we incurred a non-cash charge in property, office and technology costs of $12.0 million due to vacating leased office space, including in Denver as well as other locations, which is expected to be largely offset throughout the remainder of the year by lower property and compensation expenses.

     The main categories of operating expenses, and the dollar and percentage changes between periods, are as follows:

	Nine months ended
	September 30,
$ in millions	2009		2008		$ Change			% Change
Employee compensation		703.7		819.8		(116.1	)		(14.2	)%
Third-party distribution, service and advisory		498.0		712.9		(214.9	)		(30.1	)%
Marketing		78.5		116.9		(38.4	)		(32.8	)%
Property, office and technology		157.5		156.3		1.2			0.8	%
General and administrative		118.0		204.0		(86.0	)		(42.2	)%
Total operating expenses		1,555.7		2,009.9		(454.2	)		(22.6	)%

     The table below sets forth these cost categories as a percentage of total operating expenses and operating revenues, which we believe provides useful information as to the relative significance of each type of cost:

Nine months ended:

			% of Total			% of					% of Total			% of
	Sept 30,		Operating			Operating			Sept 30,		Operating			Operating
$ in millions	2009		Expenses			Revenues			2008		Expenses			Revenues
Employee compensation		703.7		45.2	%		37.4	%		819.8		40.8	%		30.7	%
Third-party distribution, service and advisory		498.0		32.0	%		26.5	%		712.9		35.5	%		26.7	%
Marketing		78.5		5.0	%		4.2	%		116.9		5.8	%		4.4	%
Property, office and technology		157.5		10.1	%		8.4	%		156.3		7.8	%		5.8	%
General and administrative		118.0		7.6	%		6.3	%		204.0		10.1	%		7.6	%
Total operating expenses		1,555.7		100.0	%		82.8	%		2,009.9		100.0	%		75.2	%

  Employee Compensation

     Employee compensation includes salary, cash bonuses and share-based payment plans designed to attract and retain the highest caliber employees. Employee compensation decreased $116.1 million (14.2%) to $703.7 million in the nine months ended September 30, 2009, (September 30, 2008: $819.8 million) due to decreases in base salaries and staff bonuses, offset partially by an increase of $8.0 million in costs related to savings initiatives, and the impact of foreign exchange rate movement. Headcount at September 30, 2009, was 4,908 (September 30, 2008: 5,354).

  Third-Party Distribution, Service and Advisory Expenses

     Third-party distribution, service and advisory expenses are discussed above in the operating and net revenues section.

  Marketing

     Marketing expenses decreased by $38.4 million (32.8%) in the nine months ended September 30, 2009, to $78.5 million (September 30, 2008: $116.9 million) primarily due to reductions in marketing support payments, advertising and promotional expenses as compared to the nine months ended September 30, 2008.

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  Property, Office and Technology

     Property, office and technology expenses increased by $1.2 million (0.8%) to $157.5 million in the nine months ended September 30, 2009 (September 30, 2008: $156.3 million). Decreases in technology costs resulting from general disciplined expense management measures and foreign exchange rate movement were offset by increases in property and office costs during the period. Property and office expenses include $12.0 million in charges relating to vacating leased property, including our Denver property. Additionally, a downward adjustment in rent costs for sublet office property totaling $8.2 million was recorded in the nine months ended September 30, 2008.

  General and Administrative

     General and administrative expenses decreased by $86.0 million (42.2%) to $118.0 million in the nine months ended September 30, 2009 (September 30, 2008: $204.0 million), due to several factors including an insurance recovery of $9.5 million in the nine months ended September 30, 2009, related to legal costs associated with the market-timing regulatory settlement, foreign exchange, general disciplined expense management measures, including reduced travel and entertainment expenses and professional services expenses recorded during the nine months ended September 30, 2009.

  Operating Income, Net Operating Income, Operating Margin and Net Operating Margin

     Operating income decreased by $339.5 million (51.2%) to $323.8 million in the nine months ended September 30, 2009 (September 30, 2008: $663.3 million). Operating margin (operating income divided by operating revenues) was 17.2% in the nine months ended September 30, 2009, down from 24.8% in the nine months ended September 30, 2008. Net operating income (operating income plus our proportional share of the operating income from joint venture arrangements) decreased by $350.4 million (50.4%) to $345.5 million in the nine months ended September 30, 2009, from $695.9 million in the nine months ended September 30, 2008. Net operating margin is equal to net operating income divided by net revenues. Net revenues are equal to operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of the net revenues from our joint venture arrangements. Net operating margin decreased to 24.4% in the nine months ended September 30, 2009, from 34.7% in the nine months ended September 30, 2008. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues, a reconciliation of operating income to net operating income and additional important disclosures regarding net revenues, net operating income and net operating margins.

  Other Income and Expenses

     Equity in earnings of unconsolidated affiliates decreased by $17.6 million (49.6%) to $17.9 million in the nine months ended September 30, 2009 (September 30, 2008: $35.5 million), resulting from declines in our share of the pre-tax earnings of our joint venture investments in China as well as net losses in certain of our partnership investments.

     Interest income decreased by $22.3 million (74.3%) to $7.7 million in the nine months ended September 30, 2009 (September 30, 2008: $30.0 million), as a result of lower average cash and cash equivalents balances and significantly lower interest rates during the period. The decrease in yields was consistent with market direction during this period. Interest expense decreased by $9.8 million (16.6%) to $49.3 million in the nine months ended September 30, 2009 (September 30, 2008: $59.1 million), resulting from a lower average debt balance during the nine months ended September 30, 2009, versus the prior year comparative period.

     Other gains and losses, net were a net gain of $7.8 million in the nine months ended September 30, 2009, as compared to net loss of $18.0 million in the nine months ended September 30, 2008. Included in these amounts is a gross gain generated upon the debt tender offer of $4.3 million ($3.3 million net of related expenses) and net gain of $4.0 million realized upon the disposal of other investments (2008: $7.4 million gain generated on sale of CLO and $1.2 million gain on sale of investment, offset by $4.1 million loss realized upon the disposal of a private equity investment). In the nine months ended September 30, 2009, we benefited from $8.3 million in net foreign exchange gains; whereas in the nine months ended September 30, 2008, we incurred $5.3 million in net foreign exchange losses. Included in other losses are $5.2 million and $2.7 million in other-than-temporary impairment charges related to CLO products and seed money, respectively, during the nine months ended September 30, 2009 (2008: $16.8 million related to CLO products and $0 million related to seed money). The CLO impairment arose principally from adverse changes in the timing of estimated cash flows used in the valuation models.

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     Included in other income and expenses are gains and losses of consolidated investment products, net, which are driven by realized and unrealized gains and losses of underlying investments held by consolidated funds. The consolidation of investment products during the nine months ended September 30, 2009, resulted in a decline in operating income of $6.8 million, non-operating losses of $132.8 million, and losses attributable to noncontrolling interests of $137.1 million. There was no net impact on our net income attributable to common shareholders from consolidated investment products during the nine months ended September 30, 2009. Net losses of consolidated investment products for the nine months ended September 30, 2008, were $1.2 million, which were offset within noncontrolling interests of consolidated entities.

  Income Tax Expense

     Our subsidiaries operate in several taxing jurisdictions around the world, each with its own statutory income tax rate. As a result, our effective tax rate will vary from year to year depending on the mix of the profits and losses of our subsidiaries. The majority of our profits are earned in the U.S., Canada and the U.K. The current U.K. statutory tax rate is 28%, the Canadian statutory tax rate is 33% and the U.S. Federal statutory tax rate is 35%.

     Our effective tax rate, excluding noncontrolling interests in consolidated entities, for the nine months ended September 30, 2009, was 32.1%, up from 30.8% for the nine months ended September 30, 2008. The rate increase was primarily due to the mix of pre-tax income, investment write-downs and partnership losses that occurred in zero or low tax rate jurisdictions, which provided no associated tax benefits and increased valuation allowances for subsidiary operating losses. The rate increase was partially offset by the release of an unremitted earnings deferred tax liability as a result of a change in U.K. tax law during the third quarter and by the release of $11.9 million of provisions for uncertain tax positions during the three and nine months ended September 30, 2009 (September 30, 2008: release of $9.9 million).

Schedule of Non-GAAP Information

     Net revenues (and by calculation, net revenue yield on AUM), net operating income and net operating margin are non-GAAP financial measures. The most comparable U.S. GAAP measures are operating revenues (and by calculation, gross revenue yield on AUM), operating income and operating margin. Management believes that the deduction of third-party distribution, service and advisory expenses from operating revenues in the computation of net revenues and the related computation of net operating margin provides useful information to investors because the distribution, service and advisory fee amounts represent costs that are passed through to external parties who perform functions on behalf of the company’s managed funds, which essentially are a share of the related revenues. Third-party distribution, service and advisory expenses include renewal commissions paid to independent financial advisors for as long as the clients’ assets are invested and are payments for the servicing of client accounts. Renewal commissions are calculated based upon a percentage of the AUM value. Third party distribution expenses also include the amortization of upfront commissions paid to broker-dealers for sales of fund shares with a contingent deferred sales charge (a charge levied to the investor for client redemption of AUM within a certain contracted period of time). The distribution commissions are amortized over the redemption period. Also included in third-party distribution, service and advisory expenses are sub-transfer agency fees that are paid to third parties for processing client share purchases and redemptions, call center support and client reporting. Since the company has been deemed to be the principal in the third-party arrangements, the company must reflect these expenses gross of operating revenues under U.S. GAAP. We believe that it is useful information to investors to show these expenses net of operating revenues, because net presentation more appropriately reflects the nature of these expenses as revenue-sharing activities. Additionally, management evaluates net revenue yield on AUM, which is equal to net revenues divided by average AUM during the reporting period. This metric is an indicator of the basis point net revenues we receive for each dollar of AUM we manage and is useful when evaluating the company’s performance relative to industry competitors.

     Management also believes that the addition of our proportional share of revenues, net of distribution expenses, from joint venture investments in the computation of net revenues and the addition of our proportional share of operating income in the related computations of net operating income and net operating margin also provide useful information to investors, as management considers it appropriate to evaluate the contribution of its joint venture to the operations of the business. The company has two joint venture investments in China. The Invesco Great Wall joint venture was one of the largest long-term Sino-foreign managers in China, with ending AUM of approximately $7.5 billion as of September 30, 2009. Enhancing our operations in China is one effort that we believe could improve our competitive position over time. Accordingly, we believe that it is appropriate to evaluate the contribution of our joint venture investments to the operations of the business.

53

     Net revenues (and by calculation net revenue yield on AUM), net operating income, and net operating margin should not be considered as substitutes for any measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

     The following is a reconciliation of operating revenues, operating income and operating margin on a U.S. GAAP basis to net revenues, net operating income and net operating margin:

	Three months ended Sept 30,						Nine months ended Sept 30,
$ in millions	2009			2008			2009			2008
Operating revenues, GAAP basis		705.8			827.2			1,879.5			2,673.2
Third-party distribution, service and advisory expenses		(183.5	)		(220.9	)		(498.0	)		(712.9	)
Proportional share of net revenues from joint venture arrangements		12.5			11.7			33.2			47.3
Net revenues		534.8			618.0			1,414.7			2,007.6
Operating income, GAAP basis		151.6			195.2			323.8			663.3
Proportional share of operating income from joint venture investments		8.2			7.0			21.7			32.6
Net operating income		159.8			202.2			345.5			695.9
Operating margin*		21.5	%		23.6	%		17.2	%		24.8	%
Net operating margin**		29.9	%		32.7	%		24.4	%		34.7	%

*	Operating margin is equal to operating income divided by operating revenues.
**	Net operating margin is equal to net operating income divided by net revenues.

Balance Sheet Discussion

     The following table presents a comparative analysis of significant balance sheet line items:

	September 30,		December 31,
$ in millions	2009		2008		$ Change			% Change
Cash and cash equivalents		923.8		585.2		338.6			57.9	%
Unsettled fund receivables		505.8		303.7		202.1			66.5	%
Current investments		174.2		123.6		50.6			40.9	%
Assets held for policyholders		1,190.4		840.2		350.2			41.7	%
Non-current investments		136.9		121.3		15.6			12.9	%
Investments of consolidated investment products		662.2		843.8		(181.6	)		(21.5	)%
Goodwill		6,378.7		5,966.8		411.9			6.9	%
Policyholder payables		1,190.4		840.2		350.2			41.7	%
Current maturities of long-term debt		294.2		297.2		(3.0	)		(1.0	)%
Long-term debt		745.7		862.0		(116.3	)		(13.5	)%
Equity attributable to common shareholders		6,726.6		5,689.5		1,037.1			18.2	%
Equity attributable to noncontrolling interests in consolidated entities		697.6		906.7		(209.1	)		(23.1	)%

     Cash and Cash Equivalents

     Cash and cash equivalents increased by $338.6 million from $585.2 million at December 31, 2008, to $923.8 million at September 30, 2009, primarily due to $441.8 million of cash received from the equity issuance, $134.0 million net cash generated from operating activities, offset by $103.0 million used to retire debt through the tender offer transaction and $124.2 million used to pay the quarterly dividends.

     Invesco has local capital requirements in several jurisdictions, as well as regional requirements for entities that are part of the European sub-group. These requirements mandate the retention of liquid resources in those jurisdictions, which we meet in part by holding cash and cash equivalents. This retained cash can be used for general business purposes in the European sub-group or in the countries where it is located. Due to the capital restrictions, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences that may substantially limit such activity. At September 30, 2009, the European sub-group had cash and cash equivalent balances of $368.6 million, much of which is used to satisfy these regulatory requirements. We are in compliance with all regulatory minimum net capital requirements.

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  Unsettled Fund Receivables

     Unsettled fund receivables increased by $202.1 million from $303.7 million at December 31, 2008, to $505.8 million at September 30, 2009, due to higher transaction activity between funds and investors in late September 2009 when compared to late December 2008. Unsettled fund receivables are created by the normal settlement periods on transactions initiated by certain clients of our U.K. and offshore funds. We are legally required to establish a receivable and a substantially offsetting payable at trade date with both the investor and the fund for normal purchases and sales.

  Investments (Non-current and current)

     As of September 30, 2009, we had $311.1 million in investments, of which $174.2 million were current investments and $136.9 million were non-current investments. Included in current investments are $71.6 million of seed money investments in affiliated funds used to seed funds as we launch new products, and $80.8 million of investments related to assets held for deferred compensation plans, which are also held primarily in affiliated funds, and which increased during the nine months ended September 30, 2009, due to new investments purchased to economically hedge new deferred compensation liabilities that arose from both the modification of certain share-based awards during the period (discussed in Part I. Financial Statements — Note 10, “Share-Based Compensation”) and the establishment of a new deferred compensation plan for certain employees of the company. Included in non-current investments are $111.8 million in equity method investments in our Chinese joint ventures and in certain of the company’s private equity, real estate and other investments. A $30.0 million increase in equity method investments during the period due to the new investment in a managed real estate investment trust product (discussed in Part I. Financial Statements — Note 9, “Consolidated Investment Products”) was partially offset by the receipt of a $25.8 million dividend from our Great Wall joint venture. Additionally, non-current investments include $16.2 million of investments in collateralized loan obligation structures managed by Invesco. Our investments in collateralized loan obligation structures are generally in the form of a relatively small portion of the unrated, junior subordinated position. As such, these positions would share in the first losses to be incurred if the structures were to experience significant increases in default rates of underlying investments above historical levels.

  Assets Held for Policyholders and Policyholder Payables

     One of our subsidiaries, Invesco Perpetual Life Limited, is an insurance company that was established to facilitate retirement savings plans in the U.K. The entity holds assets that are managed for its clients on its balance sheet with an equal and offsetting liability. The increasing balance in these accounts from $840.2 million at December 31, 2008, to $1,190.4 million at September 30, 2009, was the result of foreign exchange movements, the increase in the market values of these assets, and net flows into the funds.

  Investments of consolidated investment products

     The primary beneficiary of variable interest entities (VIEs) consolidate the VIEs. A VIE is an entity that does not have sufficient equity to finance its operations without additional subordinated financial support, or an entity for which the risks and rewards of ownership are not directly linked to voting interests. Generally, limited partnership entities where the general partner does not have substantive equity investment at risk and where the other limited partners do not have substantive (greater than 50%) rights to remove the general partner or to dissolve the limited partnership are also VIEs. The primary beneficiary is the party to the VIE who absorbs a majority of the losses or absorbs the majority of the rewards generated by the VIE. Additionally, under the voting interest entity (VOE) consolidation model, the general partner in a partnership that is not a VIE consolidates the partnership because the general partner is deemed to control the partnership where the other limited partner do not have substantive kick-out, liquidation or participation rights. Investments of consolidated investment products include the investments of both consolidated VIEs and VOEs.

     As of September 30, 2009, investments of consolidated investment products totaled $662.2 million (December 31, 2008: $843.8 million). These investments are offset primarily in noncontrolling interests in consolidated entities on the Condensed Consolidated Balance Sheets, as the company’s equity investment in these structures is very small. The decrease from December 31, 2008, reflects the impact of declining market values and the deconsolidation during the period ended September 30, 2009, of $53.3 million of investments held by consolidated investment products and related noncontrolling interests in consolidated entities, as a result of determining that it is no longer the primary beneficiary.

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  Goodwill

     Goodwill increased by $411.9 million from $5,966.8 million at December 31, 2008, to $6,378.7 million at September 30, 2009, primarily due to the impact of foreign currency translation for certain subsidiaries whose functional currency differs from that of the parent. The weakening of the U.S. dollar during the quarter, mainly against the Pound Sterling, Canadian Dollar, and Euro resulted in a $405.4 million increase in goodwill, upon consolidation, with a corresponding increase to equity. Additional goodwill of $6.5 million was recorded in 2009 related to the earn-out associated with the acquisition of W.L. Ross & Co.

  Long-term Debt

     The current balance of long-term debt represents $294.2 million 4.5% senior notes that mature on December 15, 2009. During the nine months ended September 30, 2009, $3.0 million of the 4.5% senior notes was repurchased.

     The non-current portion of our total long-term debt decreased from $862.0 million at December 31, 2008, to $745.7 million at September 30, 2009, as $12.0 million borrowings under the floating rate credit facility were repaid and $104.3 million in long-term debt was retired through the tender offer transaction described below in “Debt.”

  Noncontrolling interests in consolidated entities

     Noncontrolling interests in consolidated entities decreased by $209.1 million from $906.7 million at December 31, 2008, to $697.6 million at September 30, 2009, primarily due to $132.8 million of losses recorded by many of the consolidated investment products during the year and the deconsolidation during the period ended September 30, 2009, of $53.3 million of investments held by consolidated investment products and related noncontrolling interests in consolidated entities, as a result of determining that the company is no longer the primary beneficiary.

     The noncontrolling interests in consolidated entities are generally offset by the net assets of consolidated investment products, as the company’s equity investment in the investment products is not significant.

  Equity attributable to common shareholders

     Equity attributable to common shareholders increased from $5,689.5 million at December 31, 2008, to $6,726.6 million at September 30, 2009, an increase of $1,037.1 million. An issue of new shares raised a net $441.8 million and the changes in foreign currency rates added $422.4 million to equity. Other increases to equity included net income attributable to common shareholders of $211.6 million, share issuances upon employee option exercises of $40.5 million, and the share based payment credit to capital of $68.1 million. The increases to equity were partially offset by $124.2 million in dividend payments, $13.0 million related to the modification of a share-based payment program into a cash-settled award, $12.6 million in shares acquired from staff to meet withholding tax obligations on share award vestings, and an $8.9 million deduction arising on the purchase of the remaining noncontrolling interest in Invesco Real Estate GmbH.

Liquidity and Capital Resources

     On June 9, 2009, we replaced our existing $900.0 million credit facility, which was never fully utilized, with a $500.0 million credit facility, the amount of which was based upon our past and projected working capital needs; however, we are able to increase the new credit facility to $750.0 million, subject to certain conditions. Additionally, on May 26, 2009, we issued 32.9 million common shares in a public offering that produced gross proceeds of $460.5 million ($441.8 million net of related expenses). These two transactions confirmed our ability to access the capital markets in a timely manner. As such, we believe that our capital structure, together with available cash balances, cash flows generated from operations, existing capacity under our credit facility, proceeds from the public offering of our shares and further capital market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating, debt and other obligations as they come due and anticipated future capital requirements. Future obligations include the maturity of the remaining $294.2 million 4.5% senior notes due December 15, 2009. We currently expect to use available cash and/or a draw down (borrowing) under our credit facility to repay this amount. Additionally, we expect to use available cash balances to satisfy the $500.0 million cash consideration related to acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This transaction is expected to close in mid-2010.

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     Our ability to access the capital markets in a timely manner depends on a number of factors including our credit rating, the condition of the global economy, investors’ willingness to purchase our securities, interest rates, credit spreads and the valuation levels of equity markets. If we are unable to access capital markets in a timely manner, our business could be adversely impacted.

     Invesco has local capital requirements in several jurisdictions, as well as regional requirements for entities that are part of the European sub-group. These requirements require the retention of liquid resources in those jurisdictions, which we meet in part by holding cash and cash equivalents. This retained cash can be used for general business purposes in the European sub-group or in the countries where it is located. Due to the capital restrictions, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences that may substantially limit such activity. At September 30, 2009, the European sub-group had cash and cash equivalent balances of $368.6 million, much of which is used to satisfy these regulatory requirements. We are in compliance with all regulatory minimum net capital requirements.

  Cash Flows

     The ability to consistently generate cash from operations in excess of capital expenditures and dividend payments is one of our company’s fundamental financial strengths. Operations continue to be financed from current earnings and borrowings. Our principal uses of cash, other than for operating expenses, include dividend payments, capital expenditures, acquisitions, purchase of our shares in the open market and investments in certain new investment products.

     Cash flows of consolidated investment products (discussed in Item 1, Financial Statements — Note 9, “Consolidated Investment Products”) are reflected in Invesco’s cash used in operating activities, provided by investing activities and provided by financing activities. Cash held by consolidated investment products is not available for general use by Invesco, nor is Invesco cash available for general use by its consolidated investment products.

     Cash flows for the nine months ended September 30, 2009 and 2008, are summarized as follows:

	For the Nine months ended
	September 30,
$ in millions	2009			2008
Net cash (used in)/provided by:
Operating activities		134.0			338.0
Investing activities		(12.4	)		(50.5	)
Financing activities		203.4			(436.4	)
Increase/(decrease) in cash and cash equivalents		325.0			(148.9	)
Foreign exchange		13.6			(26.3	)
Cash and cash equivalents, beginning of period		585.2			915.8
Cash and cash equivalents, end of period		923.8			740.6

  Operating Activities

     Net cash provided by operating activities is generated by the receipt of investment management and other fees generated from AUM, offset by operating expenses and changes in operating assets and liabilities. Although some receipts and payments are seasonal, particularly bonus payments, in general our operating cash flows move in the same direction as our operating income. The reduced operating income for the nine months ended September 30, 2009, when compared to the prior comparative period is a significant factor in the reduced operating cash flows.

     Net cash provided by operating activities for the nine months ended September 30, 2009, was $134.0 million. Changes in operating assets and liabilities used $212.6 million of cash while the combined cash generated from other operating items was $346.6 million. The change in operating assets and liabilities was driven by the funding of annual bonuses, related payroll taxes and annual pension contributions together with higher trade receivables inline with increases in revenues. The company funded the annual bonus payments in the first quarter from cash balances rather than through increased debt levels.

     Net cash provided by operating activities for the nine months ended September 30, 2008, was $338.0 million. Changes in operating assets and liabilities used $208.9 million of cash, whereas net income contributed $450.3 million in cash flows provided by operating activities. The change in operating assets and liabilities was driven by the funding of annual bonuses and related payroll taxes.

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  Investing Activities

     With the reduction in cash generated from operating activities and desire to keep our debt levels low, investing activity was reduced in the nine months ended September 30, 2009, when compared to prior periods. Both capital expenditure and the seeding of new investment products were reduced. During the nine months ended September 30, 2009, we recaptured $91.8 million net in cash from redemption of prior investments, including seed and partnership investments. We also received $27.4 million in dividends from unconsolidated affiliates.

     In the nine months ended September 30, 2008, we received $2.3 million in return of capital from seed investments. We also made investments in affiliated funds to assist in the launch of new funds. During the nine months ended September 30, 2008, we invested $71.2 million in new funds. We collected proceeds of $94.6 million from sales of investments in the nine months ended September 30, 2008.

     During the nine months ended September 30, 2009 and 2008, our capital expenditures were $23.3 million and $69.5 million, respectively. Expenditures related principally in each year to technology initiatives, including new platforms from which we maintain our portfolio management systems and fund accounting systems, improvements in computer hardware and software desktop products for employees, new telecommunications products to enhance our internal information flow, and back-up disaster recovery systems. Also, in each year, a portion of these costs related to leasehold improvements made to the various buildings and workspaces used in our offices. These projects have been funded with proceeds from our operating cash flows. During the nine months ended September 30, 2009 and 2008, our capital divestitures were not significant relative to our total fixed assets.

     A payment of $130.9 million was made in nine months ended September 30, 2008, related to contingent consideration for the 2006 acquisition of PowerShares. There were no payments made in the nine months ended September 30, 2009, related to acquisition earn-out arrangements.

Financing Activities

     Net cash received in financing activities totaled $203.4 million for the nine months ended September 30, 2009, which was driven by the equity issuance proceeds of $441.8 million. These inflows were offset by the purchase of outstanding debt of $103.0 million, repayments of our credit facility of $12.0 million together with proceeds from the exercise of options of $40.5 million, and the $124.2 million payment of dividends declared in January, April, and July 2009. Financing cash flows also include a payment of $10.3 million to purchase of the remaining 24.9% of Invesco Real Estate GmbH not already held by the company, the controlling interest having been acquired in December 2003. As the company funded the annual bonus payments (paid first quarter) from available cash balances, debt levels did not increase during the quarter at a time of the year where our debt normally peaks.

     Net cash used in financing activities totaled $436.4 million the nine months ended September 30, 2008, which was primarily used for the purchase of treasury shares totaling $313.3 million and dividend payments of $168.4 million. Net borrowings under our credit facility and proceeds from the exercise of share options provided $45.6 million and $68.5 million in cash, respectively.

  Dividends

     Invesco declares and pays dividends on a quarterly basis. On April 22, 2009, the company declared a first quarter 2009 cash dividend of $0.1025 per Invesco Ltd. common share, which was paid on June 3, 2009, to shareholders of record as of May 20, 2009. On July 23, 2009, the company declared a second quarter 2009 cash dividend of $0.1025 per Invesco Ltd. common share, which was paid on September 2, 2009, to shareholders of record as of August 19, 2009.

  Share Repurchase Plan

     On April 23, 2008, the board of directors authorized a share repurchase program of up to $1.5 billion with no stated expiration date. During the nine months ended September 30, 2009, the company did not purchase any shares in the open market or directly from current executives (nine months ended September 30, 2008: 12.3 million shares at a cost of $313.3 million). An aggregate of 1.1 million shares were withheld on vesting events during the nine months ended September 30, 2009, to meet employees’ withholding tax obligations. The value of these shares withheld was $12.6 million (nine months ended September 30, 2008: $0).

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  Debt

     Our total indebtedness at September 30, 2009, was $1,039.9 million (December 31, 2008 is $1,159.2 million) and was comprised of the following:

	September 30,		December 31,
$ in millions	2009		2008
Unsecured Senior Notes:
4.5% — due December 15, 2009		294.2		297.2
5.625% — due April 17, 2012		215.1		300.0
5.375% — due February 27, 2013		333.5		350.0
5.375% — due December 15, 2014		197.1		200.0
Floating rate credit facility expiring March 31, 2010		—		12.0
Floating rate credit facility expiring June 9, 2012		—		—
Total long-term debt		1,039.9		1,159.2
Less: current maturities of long-term debt		294.2		297.2
Long-term debt		745.7		862.0

     For the nine months ended September 30, 2009, the company’s weighted average cost of debt was 5.18% (nine months ended September 30, 2008: 4.85%). Long-term debt decreased from $862.0 million at December 31, 2008, to $745.7 million at September 30, 2009, due to net repayments under our floating rate credit facility and retirement of debt through the tender offer.

     On June 2, 2009, the company commenced a tender offer for the maximum aggregate principal amount of the outstanding 5.625% senior notes due 2012, the 5.375% senior notes due 2013, and the 5.375% senior notes due 2014 (collectively, the “Notes”) that it could purchase for $100.0 million at a purchase price per $1,000 principal amount determined in accordance with the procedures of a modified “Dutch Auction” (tender offer). The tender offer expired at midnight on June 29, 2009, and on June 30, 2009, $104.3 million of the Notes had been retired, generating a gross gain of $4.3 million upon the retirement of debt at a discount.

     A summary of the Notes tendered is presented below:

											Percent of
	Accepted Tender				Total		Tender Offer		Accrued		Outstanding
$ in millions	Amount		Base Price		Consideration (1)		Consideration (2)		Interest (3)		Amount Tendered
5.625% — due April 17, 2012	$	84,897,000	$	920.00	$	970.00	$	940.00	$	11.41		28.3	%
5.375% — due February 27, 2013	$	16,532,000	$	870.00	$	920.00	$	890.00	$	18.36		4.7	%
5.375% — due December 15, 2014	$	2,874,000	$	800.00	$	850.00	$	820.00	$	2.24		1.4	%
	$	104,303,000

(1)	Consideration paid per $1,000 principal amount of Notes tendered on or prior to an Early Participation Date (as defined in the Offer to Purchase), which includes a $30.00 early participation amount. The total consideration was determined based on the formula consisting of the base price plus a clearing premium.
(2)	Consideration paid per $1,000 principal amount of Notes tendered after the Early Participation Date and on or prior to the Expiration Date (as defined in the Offer to Purchase).
(3)	Accrued interest paid per $1,000 principal amount of Notes.

     On June 9, 2009, the company completed a new three-year $500.0 million revolving bank credit facility. The new facility replaces the $900.0 million credit facility that was scheduled to expire on March 31, 2010, but was terminated concurrent with the entry into the new credit facility. Financial covenants under the new credit facility include: (i) the quarterly maintenance of a debt/EBITDA ratio, as defined in the credit agreement, of not greater than 3.25:1.00 through December 31, 2010, and not greater than 3.00:1.00 thereafter, (ii) a coverage ratio (EBITDA, as defined in the credit agreement/interest payable for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00, and (iii) maintenance on a monthly basis of consolidated long term assets under management (as defined in the credit agreement) of not less than $194.8 billion, which amount is subject to a one-time reset by the company under certain conditions. As of September 30, 2009, we were in compliance with our debt covenants. At

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September 30, 2009, our leverage ratio was 1.77:1.00 (December 31, 2008: 1.28:1.00), and our interest coverage ratio was 9.12:1.00 (December 31, 2008: 12.20:1.00), and our long-term AUM were $329.7 billion.

The September 30, 2009, coverage ratio calculations are as follows:

$ millions	Total		Q3 2009			Q2 2009		Q1 2009		Q4 2008
Net income attributable to common shareholders		243.5		105.2			75.7		30.7		31.9
Tax expense		135.8		43.7			36.0		20.3		35.8
Amortization/depreciation		69.9		20.0			16.7		16.0		17.2
Interest expense		67.1		16.9			16.5		15.9		17.8
Share-based compensation expense		73.9		24.3			20.2		23.7		5.7
Unrealized losses from investments		20.8		(1.4	)		1.0		6.6		14.6
EBITDA*		611.0		208.7			166.1		113.2		123.0
Adjusted debt*	$	1,083.9
Leverage ratio (Debt/EBITDA — maximum 3.25:1.00)		1.77
Interest coverage (EBITDA/Interest Expense — minimum 4.00:1.00)		9.12
September 30, 2009, long-term AUM (in billions — minimum $194.8 billion)	$	329.7

* EBITDA and Adjusted debt are non-GAAP financial measures; however management does not use these measures for anything other than these debt covenant calculations. The calculation of EBTIDA above (a reconciliation from net income attributable to common shareholders) is defined by our credit agreement, and therefore net income attributable to common shareholders is the most appropriate GAAP measure from which to reconcile to EBITDA. The calculation of adjusted debt is defined in our credit facility and equals total long-term debt of $1,039.9 million plus $43.8 million in letters of credit and $0.2 million in capital leases.

  Off Balance Sheet Commitments

     The company has transactions with various private equity, real estate and other investment entities sponsored by the company for the investment of client assets in the normal course of business. Many of the company’s investment products are structured as limited partnerships. The company’s investment may take the form of the general partner or a limited partner, and the entities are structured such that each partner makes capital commitments that are to be drawn down over the life of the partnership as investment opportunities are identified. At September 30, 2009, the company’s undrawn capital commitments were $85.5 million (December 31, 2008: $36.5 million).

     The volatility and valuation dislocations that occurred from 2007 to the date of this Report in certain sectors of the fixed income market have generated pricing issues in many areas of the market. As a result of these valuation dislocations, during the fourth quarter of 2007, Invesco elected to enter into contingent support agreements for two of its investment trusts to enable them to sustain a stable pricing structure. These two trusts are unregistered trusts that invest in fixed income securities and are available only to accredited investors. In June 2009, the agreements were amended to extend the term through December 31, 2009. As of September 30, 2009, the committed support under these agreements was $20.0 million with an internal approval mechanism to increase the maximum possible support to $65.0 million at the option of the company. The recorded fair value of the guarantees related to these agreements at September 30, 2009, was estimated to be $2.5 million (December 31, 2008: $5.5 million), which was recorded in other current liabilities on the Condensed Consolidated Balance Sheet. No payments have been made under either agreement nor has Invesco realized any losses from the support agreements through the date of this Report. These trusts were not consolidated because the company was not deemed to be the primary beneficiary.

  Contractual Obligations

     We have future obligations under various contracts relating to debt and interest payments, financing and operating leases, long-term defined benefit pension and post-retirement medical plans, and acquisition contracts. During the nine months ended September 30, 2009, there were no significant changes, except for the credit facility and debt tender offer transactions discussed in the “Debt” section above, to these obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2008.

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Critical Accounting Policies and Estimates

     Our significant accounting policies are disclosed in our most recent Form 10-K for the year ended December 31, 2008. The accounting policies and estimates that we believe are the most critical to an understanding of our results of operations and financial condition are those that require complex management judgment regarding matters that are highly uncertain at the time policies were applied and estimates were made. Our accounting policies and estimates regarding goodwill, investments and consolidated investment products are discussed below. Different estimates could have been used in the current period that would have had a material effect on these financial statements, and changes in these estimates are likely to occur from period-to-period in the future.

     Goodwill. Goodwill represents the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed and is recorded in the functional currency of the acquired entity. Goodwill is tested for impairment at the single reporting unit level on an annual basis, or more often if events or circumstances indicate that impairment may exist. If the carrying amount of goodwill at the reporting unit exceeds its implied fair value (the first step of the goodwill impairment test), then the second step is performed to determine if goodwill is impaired and to measure the amount of the impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to that excess.

     We have determined that we have one reportable segment. The company evaluated the components of its business and has determined that it has one reporting unit for purposes of goodwill impairment testing. The company’s components, business units one level below the operating segment level, include Invesco Worldwide Institutional, Invesco North American Retail, Invesco Perpetual, Invesco Continental Europe and Invesco Asia Pacific. These components have been aggregated and deemed a single reporting unit because they are all economically similar due to the common nature of products and services offered, type of clients, methods of distribution, regulatory environments, manner in which each component is operated, extent to which they share assets and resources, and the extent to which they support and benefit from common product development efforts. Complete operating results are not available separately for each component.

     The principal method of determining fair value of the reporting unit is an income approach where future cash flows are discounted to arrive at a single present value amount. The discount rate used is derived based on the time value of money and the risk profile of the stream of future cash flows. Recent results and projections based on expectation regarding revenues, expenses, capital expenditures and acquisition earn out payments produce a present value for the reporting unit. While the company believes all assumptions utilized in our assessment are reasonable and appropriate, changes in these estimates could produce different fair value amounts and therefore different goodwill impairment assessments. The most sensitive of these assumptions are the estimated cash flows and the use of a weighted average cost of capital as the discount rate to determine present value. The present value produced for the reporting unit is the fair value of the reporting unit. This amount is reconciled to the company’s market capitalization to determine an implied control premium, which is compared to an analysis of historical control premiums experienced by peer companies over a long period of time to assess the reasonableness of the fair value of the reporting unit.

     The company also utilizes a market approach to provide a secondary and corroborative fair value of the reporting unit by using comparable company and transaction multiples to estimate values for our single reporting unit. Discretion and judgment is required in determining whether the transaction data available represents information for companies of comparable nature, scope and size. The results of the secondary market approach to provide a fair value estimate are not combined or weighted with the results of the income approach described above but are used to provide an additional basis to determine the reasonableness of the income approach fair value estimate.

     The company cannot predict the occurrence of future events that might adversely affect the reported value of goodwill that totaled $6,378.7 million and $5,966.8 million at September 30, 2009, and December 31, 2008, respectively. Such events include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on the company’s assets under management, or any other material negative change in assets under management and related management fees. The company’s annual goodwill impairment review is performed as of October 1 of each year. Our goodwill impairment testing conducted during 2008, at October 1 and interim impairment tests at October 31, 2008, and March 31, 2009, indicated that the fair value of the reporting unit exceeded its carrying value, indicating that step two of the goodwill impairment test was not necessary. In addition to the fact that general market conditions did not deteriorate during the three months ended June 30, 2009, or September 30, 2009, as they had at the beginning of 2009, the company determined that no indicators of impairment existed and did not conduct an interim goodwill impairment test at those dates.

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     Investments. Most of our investments are carried at fair value on our balance sheet with the periodic mark-to-market recorded either in accumulated other comprehensive income in the case of available-for-sale investments or directly to earnings in the case of trading assets. Fair value is generally determined by reference to an active trading market, using quoted close or bid prices as of each reporting period end. When a readily ascertainable market value does not exist for an investment (such as our collateralized loan obligations, or CLOs, discussed below) the fair value is calculated based on the expected cash flows of its underlying net asset base, taking into account applicable discount rates and other factors. Since assumptions are made in determining the fair values of investments for which active markets do not exist, the actual value that may be realized upon the sale or other disposition of these investments could differ from the current carrying values. Fair value calculations are also required in association with our quarterly impairment testing of investments. The accuracy of our other-than-temporary impairment assessments is dependent upon the extent to which we are able to accurately determine fair values. Of our $311.1 million total investments at September 30, 2009, those most susceptible to impairment include $71.6 million seed money investments in our affiliated funds and $16.2 million invested in managed CLO products. Seed money investments are investments held in Invesco managed funds with the purpose of providing capital to the funds during their development periods. These investments are recorded at fair value using quoted market prices in active markets; there is no modeling or additional information needed to arrive at the fair values of these investments.

     The value of investments may decline for various reasons. The market price may be affected by general market conditions which reflect prospects for the economy as a whole or by specific information pertaining to an industry or individual company. Such declines require further investigation by management, which considers all available evidence to evaluate the realizable value of the investment, including, but not limited to, the following factors:

• The probability that the company will be unable to collect all amounts due according to the contractual terms of a debt security not impaired at acquisition;

• The length of time and the extent to which the market value has been less than cost;

• The financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a component of the business that may affect the future earnings potential;

• The intent and ability of the company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value;

• The decline in the security’s value due to an increase in market interest rates or a change in foreign exchange rates since acquisition;

• Determination that the security is not realizable; or

• An adverse change in estimated cash flows of a beneficial interest.

     Our other-than-temporary impairment analysis of seed money holdings includes a review of the market returns required for each fund portfolio to enable us to recover our original investment. As part of the review, we analyze several scenarios to project the anticipated recovery period of our original investments based on one-, three-, and five-year historical index returns and historical trends in the equity markets. We also analyze the absolute amount of any loss to date, the trend of the losses, and percent declines in values of the seed money investments. Along with intent and ability to hold, all of these scenarios are considered as part of our other-than-temporary impairment analysis of seed money holdings.

     The company provides investment management services to a number of CLOs. These entities are investment vehicles created for the sole purpose of issuing CLO instruments that offer investors the opportunity for returns that vary with the risk level of their investment. The notes issued by the CLOs are backed by diversified portfolios consisting primarily of loans or structured debt. For managing the collateral for the CLO entities, the company earns investment management fees, including in some cases subordinated management fees, as well as in certain cases contingent incentive fees. The company has invested in certain of the entities, generally taking a relatively small portion of the unrated, junior subordinated position. At September 30, 2009, the company held $16.2 million of investment in these CLOs (December 31, 2008: $17.5 million), which represents its maximum risk of loss. Our investments in CLOs are generally subordinated to other interests in the entity and entitle the investor to receive the residual cash flows, if any, from the entity. As a result, the company’s investment is sensitive to changes in the credit quality of the issuers of the collateral securities, including changes in forecasted default rates and declines in anticipated recovery rates. Investors in CLOs have no recourse against the company for any losses sustained in the CLO structure.

62

     The company has recorded its investments at fair value primarily using an income approach. Fair value is determined using current information, notably market yields and projected cash flows based on forecasted default and recovery rates that a market participant would use in determining the current fair value of the equity interest. Market yields, default rates and recovery rates used in the company’s estimate of fair value vary based on the nature of the investments in the underlying collateral pools. In periods of rising market yields, default rates and lower debt recovery rates, the fair value, and therefore carrying value, of the company’s investments in these CLO entities may be adversely affected. The current liquidity constraints within the market for CLO products require the use of unobservable inputs for CLO valuation. The excess of actual and anticipated future cash flows over the initial investment at the date of purchase is recognized as interest income over the life of the investment using the effective yield method. The company reviews cash flow estimates throughout the life of each CLO entity. Cash flow estimates are based on the underlying pool of securities and take into account the overall credit quality of the issuers, the forecasted default rate of the securities and the company’s past experience in managing similar securities. If the updated estimate of future cash flows (taking into account both timing and amounts) is less than the last revised estimate, an impairment loss is recognized based on the excess of the carrying amount of the investment over the updated estimate of future cash flows and is recorded through the income statement. As discussed in Part I, Financial Information, Item 1, Financial Statements — Note 1, “Accounting Policies,” the company adopted FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (FSP FAS 115-2), now encompassed in ASC Topic 320, on April 1, 2009. As a result of FSP FAS 115-2, credit-related impairment is recorded through the Statement of Income, and non-credit related impairment is recorded through other comprehensive income. Upon adoption, the company recorded a cumulative effect adjustment of $1.5 million to the April 1, 2009, opening balance of retained earnings with a corresponding adjustment to accumulated other comprehensive income representing the non-credit component of previously recognized other-than-temporary impairment. During the three months ended September 30, 2009, an additional $0.8 million was recorded as a charge to earnings representing the credit-related other-than-temporary impairment during the period, and $0.3 million was recorded as a charge to other comprehensive income from other-than-temporary impairment related to non-credit related factors, primarily the change in discount rates during the period. An increase or decrease in the discount rate of 1.0% would change the valuation of the CLOs by $0.6 million as of September 30, 2009.

     Consolidated Investment Products. The primary beneficiary of variable interest entities (VIEs) consolidate the VIEs. A VIE is an entity that does not have sufficient equity to finance its operations without additional subordinated financial support, or an entity for which the risks and rewards of ownership are not directly linked to voting interests. Generally, limited partnership entities where the general partner does not have substantive equity investment at risk and where the other limited partners do not have substantive (greater than 50%) rights to remove the general partner or to dissolve the limited partnership are also VIEs. The primary beneficiary is the party to the VIE who absorbs a majority of the losses or retains the majority of the rewards generated by the VIE. Additionally, certain investment products are voting interest entities (VOEs) and are structured as limited partnerships of which the company is the general partner and is deemed to have control with the lack of substantive kick-out, liquidation or participation rights of the other limited partners. These investment products are also consolidated into the company’s financial statements.

     Assessing if an entity is a VIE or VOE involves judgment and analysis on a structure-by-structure basis. Factors included in this assessment include the legal organization of the entity, the company’s contractual involvement with the entity and any related party or de facto agent implications of the company’s involvement with the entity. Determining if the company is the primary beneficiary of a VIE also requires significant judgment, as the calculation of expected losses and residual returns involves estimation and probability assumptions. If current financial statements are not available for consolidated VIEs or VOEs, estimation of investment valuation is required, which includes assessing available quantitative and qualitative data. Significant changes in these estimates could impact the reported value of the investments held by consolidated investment products and the related offsetting equity attributable to noncontrolling interests in consolidated entities on the Condensed Consolidated Balance Sheets and the other gains and losses of consolidated investment products, net, and related offsetting gains and losses attributable to noncontrolling interests in consolidated entities, net, amounts on the Condensed Consolidated Statements of Income. As of September 30, 2009, the company consolidated VIEs that held investments of $64.5 million (December 31, 2008: $141.9 million) and VOE partnership investments of $597.7 million (December 31, 2008: $701.9 million). As circumstances supporting estimates and factors change, the determination of VIE and primary beneficiary status may change, as could the determination of the necessity of consolidation of VOEs.

Recent Accounting Standards

     See Part I, Item 1, “Financial Statements — Note 1, Accounting Policies — Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements.”

63

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     In the normal course of its business, the company is primarily exposed to market risk in the form of securities market risk, interest rate risk, and foreign exchange rate risk.

AUM Market Price Risk

     The company’s investment management revenues are comprised of fees based on a percentage of the value of AUM. Declines in equity or fixed income security market prices could cause revenues to decline because of lower investment management fees by:

     • Causing the value of AUM to decrease.

     • Causing the returns realized on AUM to decrease (impacting performance fees).

     • Causing clients to withdraw funds in favor of investments in markets that they perceive to offer greater opportunity and that the company does not serve.

     • Causing clients to rebalance assets away from investments that the company manages into investments that the company does not manage.

     • Causing clients to reallocate assets away from products that earn higher revenues into products that earn lower revenues.

Underperformance of client accounts relative to competing products could exacerbate these factors.

Securities Market Risk

     The company has investments in sponsored investment products that invest in a variety of asset classes. Investments are generally made to establish a track record or to hedge exposure to certain deferred compensation plans. The company’s exposure to market risk arises from its investments. A 20% increase or decrease in the fair value of investments exposed to market risk is not material to the operating results of the company.

Interest Rate Risk

     Interest rate risk relates to the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company is exposed to interest rate risk primarily through its external debt and cash and cash equivalent investments. On September 30, 2009, the interest rates on 100.0% of the company’s borrowings were fixed for an average period of 2.7 years. Borrowings under the credit facility will have floating interest rates. A 1% change in the level of interest rates would not have a material impact on the ability of the company to continue to service its indebtedness.

Foreign Exchange Rate Risk

     The company has transactional currency exposures that occur when any of the company’s subsidiaries receives or pays cash in a currency different from its functional currency. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency. These exposures are not actively managed.

     The company also has certain investments in foreign operations, whose net assets and related goodwill are exposed to foreign currency translation risk. The company does not hedge these exposures.

     The company is exposed to foreign exchange revaluation into the income statement on monetary assets and liabilities that are held by subsidiaries in different functional currencies than the subsidiaries’ functional currencies. Net foreign exchange revaluation gains were $8.2 million for the nine months ended September 30, 2009, and $6.3 million in losses in the comparable prior year period, and are included in general and administrative and other gains and losses, net on the Condensed Consolidated Statements of Income. We continue to monitor our exposure to foreign exchange revaluation.

64

Item 4. Controls and Procedures

     Our management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information the company is required to disclose in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

     We have evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures as of September 30, 2009. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

     We have evaluated any change in our internal control over financial reporting that occurred during the nine months ended September 30, 2009, and have concluded that there was no change that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

65

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     Following the industry-wide regulatory investigations in 2003 and 2004, multiple lawsuits based on market timing allegations were filed against various parties affiliated with Invesco. These lawsuits were consolidated in the United States District Court for the District of Maryland, together with market timing lawsuits brought against affiliates of other mutual fund companies, and on September 29, 2004, three amended complaints were filed against company-affiliated parties: (1) a putative shareholder class action complaint brought on behalf of shareholders of AIM funds formerly advised by Invesco Funds Group, Inc.; (2) a derivative complaint purportedly brought on behalf of certain AIM funds and the shareholders of such funds; and (3) an ERISA complaint purportedly brought on behalf of participants in the company’s 401(k) plan. The company and plaintiffs have reached settlements in principle of these lawsuits. The proposed settlements, which are subject to court approval, call for a payment by the company of $9.8 million, recorded in general and administrative expenses in the Consolidated Statement of Income during the six months ended December 31, 2007, in exchange for dismissal with prejudice of all pending claims. In addition, under the terms of the proposed settlements, the company may incur certain costs in connection with providing notice of the proposed settlements to affected shareholders. Based on information currently available, it is not believed that any such incremental notice costs will have any material effect on the consolidated financial position or results of operations of the company.

     The asset management industry also is subject to extensive levels of ongoing regulatory oversight and examination. In the United States and other jurisdictions in which the company operates, governmental authorities regularly make inquiries, hold investigations and administer market conduct examinations with respect to compliance with applicable laws and regulations. Additional lawsuits or regulatory enforcement actions arising out of these inquiries may in the future be filed against the company and related entities and individuals in the U.S. and other jurisdictions in which the company and its affiliates operate. Any material loss of investor and/or client confidence as a result of such inquiries and/or litigation could result in a significant decline in assets under management, which would have an adverse effect on the company’s future financial results and its ability to grow its business.

     In the normal course of its business, the company is subject to various litigation matters. Although there can be no assurances, at this time management believes, based on information currently available to it, that it is not probable that the ultimate outcome of any of these actions will have a material adverse effect on the consolidated financial condition or results of operations of the company.

Item 1A. Risk Factors

     The company has had no significant changes in its risk factors from those previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2008.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

     The following table sets forth information regarding purchases of our common shares by us and any affiliated purchases during the three months ended September 30, 2009:

							Maximum Number at end of
							period (or Approximate
					Total Number of		Dollar Value) of Shares
					Shares Purchased as		that
					Part of Publicly		May Yet Be Purchased
	Total Number of		Average Price		Announced Plans		Under the Plans
Month	Shares Purchased (1)		Paid Per Share		or Programs (2)		or Programs (2)
July 1-31, 2009		5,812	$	17.48		—	$	1,360,608,682
August 1-31, 2009		466	$	20.52		—	$	1,360,608,682
September 1-30, 2009		—		—		—	$	1,360,608,682

(1)	An aggregate of 6,278 shares were surrendered to us to satisfy tax withholding obligation or loan repayment in connection with the vesting of equity awards.
(2)	On April 23, 2008, our board of directors authorized a new share repurchase authorization of up to $1.5 billion of our common shares with no stated expiration date.

66

Item 3. Defaults upon Senior Securities

     None.

Item 4. Submission of Matters to a Vote of Security Holders

     None.

67

Item 6. Exhibits

Exhibit Index

3.1	Memorandum of Association of Invesco Ltd., incorporating amendments up to and including December 4, 2007, incorporated by reference to exhibit 3.1 to Invesco’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 12, 2007
3.2	Amended and Restated Bye-Laws of Invesco Ltd., incorporating amendments up to and including December 4, 2007, incorporated by reference to exhibit 3.2 to Invesco’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 12, 2007
10.1	Transaction Agreement, dated as of October 19, 2009, between Invesco Ltd. and Morgan Stanley.
31.1	Certification of Martin L. Flanagan pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Loren M. Starr pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Martin L. Flanagan pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Loren M. Starr pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

68

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	INVESCO LTD.
October 30, 2009	By:	/s/ MARTIN L. FLANAGAN
		Martin L. Flanagan
		President and Chief Executive Officer
October 30, 2009	By:	/s/ LOREN M. STARR
		Loren M. Starr
		Senior Managing Director and Chief Financial Officer

69

EX-10.1

Exhibit 10.1

TRANSACTION AGREEMENT

dated as of

October 19, 2009

between

MORGAN STANLEY

and

INVESCO LTD.

TABLE OF CONTENTS

	Page
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions		1
Section 1.02. Other Definitional and Interpretative Provisions		27
ARTICLE 2
Sale and Merger Transactions
Section 2.01. Sale and Purchase of the Purchased Assets		28
Section 2.02. Merger of Van Kampen Parent		28
Section 2.03. Purchase Price		29
Section 2.04. Closing		29
Section 2.05. Closing Revenue Run-Rate Purchase Price Adjustment		31
Section 2.06. True-Up		33
Section 2.07. Allocation of Purchase Price		35
Section 2.08. Assignment of Contracts and Rights		36
Section 2.09. Certain Adjustments		36
Section 2.10. Post-Closing Cash Cap		36
ARTICLE 3
Representations and Warranties of Seller
Section 3.01. Organization and Qualification		38
Section 3.02. Ownership		38
Section 3.03. Corporate Authority		39
Section 3.04. Binding Effect		39
Section 3.05. Governmental Consents and Approvals		39
Section 3.06. Non-Contravention		40
Section 3.07. Investment Purpose		41
Section 3.08. Legal Proceedings		42
Section 3.09. Organization and Qualification		42
Section 3.10. Capitalization		42
Section 3.11. Financial Information		43
Section 3.12. Absence of Undisclosed Liabilities		45
Section 3.13. Taxes		45
Section 3.14. Employee Benefits		47
Section 3.15. Permits		49
Section 3.16. Intellectual Property		50
Section 3.17. Labor		51
Section 3.18. Contracts		52
Section 3.19. Absence of Changes		55
Section 3.20. Compliance with Laws		55

i

	Page
Section 3.21. Assets Under Management; Investment Advisory Activities		58
Section 3.22. Funds		60
Section 3.23. Advisory Clients		65
Section 3.24. Product Performance Record		66
Section 3.25. ERISA Compliance		67
Section 3.26. Property		67
Section 3.27. Sufficiency of Assets		67
Section 3.28. Finders’ Fees		68
Section 3.29. Insurance		68
Section 3.30. Affiliate Arrangements		68
Section 3.31. Inspections; No Other Representations		68
Section 3.32. Filings		69
ARTICLE 4
Representations and Warranties of Buyer
Section 4.01. Organization and Qualification		69
Section 4.02. Capitalization		70
Section 4.03. Corporate Authorization		70
Section 4.04. Consents and Approvals		71
Section 4.05. Non-Contravention		71
Section 4.06. Binding Effect		72
Section 4.07. Aggregate Equity Consideration		72
Section 4.08. SEC Matters		72
Section 4.09. Absence of Undisclosed Liabilities		73
Section 4.10. Absence of Certain Changes		74
Section 4.11. Financial Capability		74
Section 4.12. Investment Purpose		74
Section 4.13. Investment Advisory Activities		74
Section 4.14. Information in Proxy and Consent Solicitation Materials		75
Section 4.15. Section 15(f) of the Investment Company Act		76
Section 4.16. Filings		76
Section 4.17. Compliance with Laws		76
Section 4.18. Finders’ Fees		76
Section 4.19. Legal Proceedings		77
Section 4.20. Material Contracts		77
Section 4.21. Antitakeover Statutes		77
Section 4.22. Certain Tax Matters		77
ARTICLE 5
Covenants of Seller
Section 5.01. Conduct of the Van Kampen Business		78
Section 5.02. Access to Information; Presentment of Audited and Unaudited Financial Statements		82
Section 5.03. Transfer Restrictions		85
Section 5.04. Standstill		87

ii

	Page
Section 5.05. Non-Solicitation of Alternative Transactions		88
Section 5.06. Resignations		89
Section 5.07. Non-Solicit		89
Section 5.08. Regulatory Capital; Other Cash in the Business		89
Section 5.09. Trademarks; Tradenames		93
ARTICLE 6
Covenants of Buyer
Section 6.01. Conduct of Business of Buyer		94
Section 6.02. Access to Information		95
Section 6.03. Trademarks; Tradenames		96
Section 6.04. Use of Confidential Information		96
Section 6.05. Stock Exchange Listing		96
Section 6.06. Shelf Registration		96
Section 6.07. Equivalent Buyer Preferred Stock		98
ARTICLE 7
Covenants of Buyer and Seller
Section 7.01. Reasonable Best Efforts; Further Assurances		98
Section 7.02. Certain Filings		100
Section 7.03. Public Announcements		100
Section 7.04. Intercompany Accounts and Agreements		100
Section 7.05. Fund and Advisory Client Consents		100
Section 7.06. Section 15(f)		108
Section 7.07. Certain Post-Closing Filings		109
Section 7.08. Information for Fund Boards		109
Section 7.09. Van Kampen Seed Capital		109
Section 7.10. Notices of Certain Events		110
Section 7.11. Alternative Transaction Structure		110
Section 7.12. WARN Act		111
Section 7.13. Confidentiality		111
Section 7.14. Conversion		113
Section 7.15. Restricted Activities		113
Section 7.16. Jersey City Facility		115
Section 7.17. Distribution Agreement		115
ARTICLE 8
Tax Matters
Section 8.01. Termination of Tax Sharing Agreements		115
Section 8.02. Seller Tax Covenants		116
Section 8.03. Buyer Tax Covenants		116
Section 8.04. Transfer Taxes		118
Section 8.05. Transferred Assets		118

iii

	Page
Section 8.06. Preparation and Filing of Tax Returns for Transferred Entities		119
Section 8.07. Cooperation		120
Section 8.08. 368 Reorganization		120
Section 8.09. Tax Indemnification with Respect to Transferred Entities, Purchased Assets and Assumed Liabilities		120
Section 8.10. Coordination and Survival		123
ARTICLE 9
Employee Matters and Benefits
Section 9.01. Van Kampen Business Employees		123
Section 9.02. Employee Matters		126
Section 9.03. Compliance with Applicable Law for Non-U.S. Employees		132
Section 9.04. Cooperation; Employee Communications		132
Section 9.05. Stock Options and Restricted Stock Units		133
Section 9.06. Cash Based Deferred Compensation		135
Section 9.07. Provision of Information; Reimbursement of Compensation Related Tax Benefit; Payment of Paying Agent Costs		137
Section 9.08. Additional Provisions Applicable to Seller Equity Awards and Cash Based Deferred Compensation		139
Section 9.09. No Amendment; No Third-Party Beneficiaries		141
ARTICLE 10
Conditions to Closing
Section 10.01. Conditions to Obligations of Buyer and Seller		141
Section 10.02. Conditions to Obligation of Buyer		141
Section 10.03. Conditions to Obligation of Seller		143
ARTICLE 11
Survival; Indemnification
Section 11.01. Survival		144
Section 11.02. Indemnification		145
Section 11.03. Third Party Claim Procedures		147
Section 11.04. Direct Claim Procedures		148
Section 11.05. Calculation of Damages		148
Section 11.06. Assignment of Claims		149
Section 11.07. Exclusivity		149
ARTICLE 12
Termination
Section 12.01. Grounds for Termination		149
Section 12.02. Effect of Termination		150

iv

	Page
ARTICLE 13
Miscellaneous
Section 13.01. Notices		150
Section 13.02. Amendments and Waivers		151
Section 13.03. Expenses		152
Section 13.04. Successors and Assigns		152
Section 13.05. Governing Law		152
Section 13.06. Jurisdiction		152
Section 13.07. WAIVER OF JURY TRIAL		153
Section 13.08. Counterparts; Effectiveness; Third Party Beneficiaries		153
Section 13.09. Entire Agreement		153
Section 13.10. Severability		154
Section 13.11. Disclosure Schedules		154
Section 13.12. Specific Performance		154

TABLE OF EXHIBITS

Exhibit A	Form of Agreement and Plan of Merger
Exhibit B	Form of Assignment and Assumption Agreement, Bill of Sale
Exhibit C	Certain Funds with Portfolio Managers to Be Replaced
Exhibit D	Form of Distribution Agreement
Exhibit E	Form of IP Matters Agreement
Exhibit F	Certain Real Property Assets
Exhibit G	Form of Temporary Investment Services Agreement
Exhibit H	Form of Transition Services Agreement
Exhibit I	Allocation of Consideration
Exhibit J	Base Revenue Schedule
Exhibit K	Conversion Plan
Exhibit L	Certain Permitted Buyer Transactions
Appendix A	Japan Appendix
Appendix B	United Kingdom Appendix

v

TRANSACTION AGREEMENT

     TRANSACTION AGREEMENT (this “Agreement”) dated as of October 19, 2009 between Invesco Ltd., a Bermuda corporation (“Buyer”), and Morgan Stanley, a Delaware corporation (“Seller”).

W I T N E S S E T H :

     WHEREAS, Seller owns, directly or indirectly, the Van Kampen Business and desires to sell the Van Kampen Business to Buyer, and Buyer desires to purchase the Van Kampen Business from Seller, pursuant to (i) a merger of Van Kampen Parent with and into Merger Subsidiary and (ii) a sale and purchase of the Purchased Assets, in each case upon the terms and subject to the conditions hereinafter set forth and pursuant to the Agreement and Plan of Merger; and

     WHEREAS, for U.S. federal income tax purposes, it is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code (a “368 Reorganization”), and that this Agreement shall constitute a “plan of reorganization” within the meaning of Section 1.368-2(g) of the Treasury regulations promulgated under the Code, unless Seller exercises an Alternative Transaction Structure Election pursuant to Section 7.11;

     ACCORDINGLY, in consideration of the promises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1
DEFINITIONS

     Section 1.01. Definitions. (A) As used herein, the following terms have the following meanings:

     “2010 Compensation Accrual” means the accrued amount (reflecting the period from January 1, 2010 through the day before the Closing Date) in respect of any Liabilities in respect of cash based bonus awards to be granted by Buyer in the ordinary course of business pursuant to the 2010 Incentive Compensation Programs.

     “’40 Act Fund” means any Fund registered under the Investment Company Act.

     “’40 Act Management Fund” means any ’40 Act Fund other than a UIT Fund.

     “Adjusted Assets Under Management” as of any date means the sum, for any Client investment management account (excluding, for purposes of this

1

Agreement, UIT Fund accounts) in question as of such date, of the amount, expressed in U.S. dollars, of assets under management of the Van Kampen Business for each such account as of such date valued as follows:

     (a) for purposes of calculating the Base Revenue Run-Rate as of the Base Date, in the same manner as provided for the calculation of base investment management fees payable in respect of each such Client account pursuant to the terms of the Investment Advisory Arrangements applicable to such account; and

     (b) for purposes of calculating the Closing Revenue Run-Rate as of the Closing Measurement Date or as of the Closing Date, as applicable, as the amount calculated pursuant to subsection (a) above, (i) increased by a positive amount equal to additions, contributions and reinvestments actually funded to such account after the Base Date and on or prior to the Closing Measurement Date or the Closing Date, as applicable, (ii) increased with respect to any new accounts opened after the Base Date and on or prior to the Closing Measurement Date or the Closing Date, as applicable, and any additions to such new accounts prior to the Closing Measurement Date or the Closing Date, as applicable, by the amount of additions, contributions and reinvestments actually funded to such account after the Base Date and on or prior to the Closing Measurement Date or the Closing Date, as applicable, (iii) decreased by terminations, withdrawals, redemptions and repurchases actually funded out of each such account after the Base Date and prior to the Closing Measurement Date or the Closing Date, as applicable, and (iv) decreased by the amount of any Contingent Account to the extent provided in the definition thereof;

provided, however, in the case of both clauses (a) and (b) hereof (other than clauses (D), (E) and (F) below, which shall relate solely to clause (b)):

(A)	additions, contributions and reinvestments shall be taken into account only when actually funded and withdrawals, redemptions and repurchases shall be taken into account when they are actually funded out of such account;
(B)	any assets under management for any account for which the Person in question acts as investment adviser and sub-adviser shall be counted only once;
(C)	any assets under management for any set of accounts one of which invests in the other shall be counted only once if the Person in question or an Affiliate thereof acts as investment adviser to both, except to the extent that an investment management fee is payable to one or more Persons in respect of each such multiple account (unless, in this latter case, the investment management fees on such assets that are so payable are otherwise aggregated

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	for purposes of calculating the Revenue Run-Rate for one such account);
(D)	to the extent any addition, contribution, reinvestment, withdrawal, redemption or repurchase after the Base Date is made in a currency other than U.S. dollars, for purposes of clause (b) hereof, such amount shall be converted to U.S. dollars at the currency exchange rate on the date of any such contribution, reinvestment, withdrawal, redemption or repurchase;
(E)	for the avoidance of doubt, the calculation of Adjusted Assets Under Management shall be made in a manner that excludes any increase or decrease in assets under management resulting from market appreciation or depreciation or currency fluctuations (except to the extent covered by clause (D) above) from and after the Base Date (or in the case of an account established after the Base Date, after the date such account is established);
(F)	in the event of a Fund Change Announcement in respect of any Fund or Client, then Adjusted Assets Under Management for any such Fund or Client shall be deemed to be fixed at the amount thereof immediately prior to any such announcement rather than as of the Closing Measurement Date or Closing Date;
(G)	the Adjusted Assets under Management of all of the Japanese Business Clients shall be deemed to be fixed at the amount thereof immediately prior to the date hereof; and
(H)	for the sake of clarity, the Adjusted Assets under Management shall exclude the Client accounts listed on Section 1.01(a) of the Seller Disclosure Schedule.

     “Adjustment Factor” means an amount equal to the Base Purchase Price divided by the Base Revenue Run-Rate.

     “Advisory Client” means a Client of the Van Kampen Business, other than a Fund.

     “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. Notwithstanding anything in this Agreement to the contrary, in no event shall any Fund of, or managed by, any Person be considered to be an Affiliate of such Person.

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     “Aggregate Cash Consideration” means $500,000,000.

     “Aggregate Equity Consideration” means 44,130,627 shares of Buyer Stock (as adjusted pursuant to the terms and conditions hereof); provided that if the Aggregate Equity Consideration would otherwise cause Seller’s beneficial ownership (as defined in Rule 13d of the Exchange Act) of Buyer Stock (as determined by Seller based on its reporting and compliance policies and procedures in respect thereof and discussed with Buyer) to exceed the Common Stock Cap, the Aggregate Equity Consideration shall consist of (i) the maximum number of shares of Buyer Stock that Seller can own without Seller’s beneficial ownership exceeding the Common Stock Cap plus (ii) a number of shares of Equivalent Buyer Preferred Stock that are convertible into a number of shares of Buyer Stock equal to (x) 44,130,627 shares of Buyer Stock less (y) the number of shares of Buyer Stock referred to in clause (i).

     “Aggregate Purchase Price” means, collectively, the Aggregate Cash Consideration and the Aggregate Equity Consideration.

     “Agreement and Plan of Merger” means the Agreement and Plan of Merger to be entered into by the parties in connection with the Merger substantially in the form of Exhibit A.

     “Ancillary Agreement” means each of the Agreement and Plan of Merger, the Assignment and Assumption Agreement, the Transition Services Agreement, the IP Matters Agreement, the Distribution Agreement and the Temporary Investment Services Agreement.

     “Antitrust Laws” mean all Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

     “Asset Consideration” means the portion of the Aggregate Cash Consideration allocated to the Purchased Assets.

     “Assignment and Assumption Agreement” means the Assignment and Assumption Agreement, Bill of Sale to be entered into by the parties related to the Purchased Assets and the Assumed Liabilities substantially in the form of Exhibit B.

     “Assignment Requirements” means, with respect to any Existing Advisory Contract, the necessary consents and approvals under applicable Law and under such Existing Advisory Contract (which consents and approvals may be obtained by negative consent to the extent contemplated by Section 7.05) to effect (A) the assignment or continuation of such Existing Advisory Contract (or if required by applicable Law, the replacement of such Existing Advisory Contract with a New Advisory Contract) (and shall not include an “interim contract” pursuant to Rule 15a-4 under the Investment Company Act), in connection with the transactions contemplated by this Agreement (whether via

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assignment, merger or otherwise), (B) a change of control of the adviser, sub-adviser, investment manager, trustee or similar such party in connection with the transactions contemplated by this Agreement, (C) a Fund Merger or (D) a Closed-End Fund Assignment Arrangement or a Client Assignment Arrangement, in each case as contemplated by Section 7.05.

     “Assumed Benefit and Compensation Arrangement” means any (i) Benefit and Compensation Arrangement or portion thereof that is sponsored, entered into or maintained by any Transferred Entity under which a Transferred Entity has any current or future obligation that is assumed by Buyer or one of its Affiliates pursuant to Section 9.02(j), (ii) employment agreement, offer letter or similar individual Contract that is assumed by Buyer or one of its Affiliates pursuant to Section 9.01(f) and (iii) 2009 Long-Term Incentive Award assumed by Buyer pursuant to Section 9.02(b), in each case, as identified on Section 3.14(a)(ii) of the Seller Disclosure Schedule.

     “Assumed Liabilities” means all obligations and liabilities of any kind, character or description (whether known or unknown, accrued, absolute, contingent or otherwise and whether arising before, on or after the Closing Date), and all Contracts validly assigned, in each case primarily relating to or arising from or under any of the Purchased Assets or the conduct of the Van Kampen Business to the extent relating to the Morgan Stanley-Branded Transferred Clients, except for (i) the Excluded Payables, (iii) those matters set forth on Section 11.02(a) of the Buyer Disclosure Schedule and (iv) as otherwise set forth in Article 9.

     “Base Date” means September 30, 2009.

     “Base Purchase Price” means $1,500,000,000.

     “Base Revenue Run-Rate” means the Revenue Run-Rate for all Clients of the Van Kampen Business calculated as of the Base Date, as set forth on the Base Revenue Schedule.

     “Benefit and Compensation Arrangement” means any employment (or form of employment), benefit and compensation agreement (including compensation guarantees), plan, Contract, program, arrangement or policy covering one or more (i) Van Kampen Business Employees or (ii) former employees of the Van Kampen Business (to the extent there is a current or future obligation to such former employee under such benefit and compensation arrangement for which a Transferred Entity is responsible or has any liability, contingent or otherwise), including any trust instruments and insurance Contracts forming a part thereof and any deferred compensation, stock purchase, equity or equity-based or other incentive, bonus, consulting, post-retirement insurance, workers’ compensation, disability, fringe or other benefit, vacation or severance or change in control agreement, plan, Contract, program, arrangement or policy, including any “employee benefit plan” within the meaning of Section 3(3) of

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ERISA, and all amendments thereto and any statutory or government obligations, plans or arrangements with respect to jurisdictions other than the United States, Japan and the United Kingdom.

     “BHC Act” means the United States Bank Holding Company Act of 1956.

     “Broker-Dealer” means Van Kampen Funds Inc., a Delaware corporation.

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

     “Buyer Deductible Compensatory Arrangements” means the Legacy Van Kampen Nonqualified Deferred Compensation Plans, the Buyer Deductible Seller Equity Awards, the Buyer Deductible Dividend Equivalent Amounts and the Buyer Deductible Cash Deferred Compensation Awards.

     “Buyer Disclosure Schedule” means the disclosure schedule dated the date hereof regarding this Agreement that has been provided by Buyer to Seller prior to execution of this Agreement.

     “Buyer Fund” means, as of any date, any pooled investment vehicle, investment trust, investment company, unit investment trust, collective fund, collective trust, commodity pool or other collective or commingled investment vehicle, unit-linked life insurance fund, unit trust or, where applicable, the corporation or trust of which it is a series, for which Buyer or one or more of its Affiliates acts or will, after a date prior to the Closing, act (i) as investment adviser, sub-adviser, trustee, manager, supervisor or sponsor or (ii) in a similar capacity under applicable Law, in each case, as of such date. Notwithstanding anything in this Agreement to the contrary, representations and warranties made by Buyer in this Agreement with respect to Buyer Funds (except, for the avoidance of doubt, with respect to representations relating to Buyer’s and its Affiliates’ actions with regard to the Buyer Funds) shall always be deemed to be made only with respect to, and only to the extent that, such Buyer Funds have been sponsored or created by, are 25% or more owned by, or have a majority of officers designated by Buyer or its Affiliates.

     “Buyer Material Adverse Effect” means a Material Adverse Effect in respect of Buyer and its Subsidiaries, taken as a whole.

     “Buyer Signing Price” means $22.66 per share.

     “Buyer Stock” means the common shares, $0.20 par value per share, of Buyer.

     “Client” of a Person or the Van Kampen Business means any other Person, including a Fund, to which such first Person provides investment

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management services (including, with respect to Funds, as general partner, managing member, or in a similar capacity), trustee services, supervisory services (in the case of UIT Funds), or investment advisory services, including any sub-advisory services, relating to securities or other financial instruments, commodities, real estate or any other type of asset, pursuant to an Investment Advisory Arrangement.

     “Client Assignment Arrangement” means, with respect to any Client, (i) the assignment of such Client’s Existing Advisory Contract to a Subsidiary of Buyer such that the Subsidiary may provide advisory services to such Client in accordance with such Existing Advisory Contract or otherwise on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees (it being understood that, in this case, and in every other case in this Agreement in which it is contemplated that the same advisory and same aggregate non-advisory fees will be maintained (or carried over to a New Advisory Contract), there is no obligation to eliminate any fee waivers in connection with the transactions contemplated hereby)) to those of the applicable Existing Advisory Contract in effect on the date hereof or (ii) if required by applicable Law, the replacement of such Client’s Existing Advisory Contract with a New Advisory Contract between such Client and a Subsidiary of Buyer, such New Advisory Contract to be on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract in effect on the date hereof.

     “Closed-End Fund Assignment Arrangement” means with respect to each ’40 Act Management Fund that is a closed-end Fund, (i) the replacement of the Existing Advisory Contract with a New Advisory Contract between such Fund and a Subsidiary of Buyer, such New Advisory Contract to be on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract in effect on the date hereof, (ii) the election or appointment, in accordance with applicable Law, as additional trustees or directors (as the case may be) of such Fund (to the extent not already directors or trustees (as the case may be) of such Fund) the persons set forth on Section 1.01(a) of the Buyer Disclosure Schedule and (iii) the resignation from the board of such Fund of all trustees or directors (as the case may be) not contemplated by the foregoing clause (ii), except for those trustees or directors elected pursuant to Section 18(a)(2)(C) of the Investment Company Act with respect to such Fund.

     “Closing Date” means the date of the Closing.

     “Closing Measurement Date” means such Business Day as close as practicable but in any event not more than 10 Business Days nor less than 5 Business Days prior to the date of the Closing.

     “Closing Revenue Run-Rate” means the Revenue Run-Rate for all Clients of the Van Kampen Business calculated in accordance with clause (b) of

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the definition of Adjusted Assets Under Management as of the Closing Measurement Date.

     “Closing Revenue Run-Rate Purchase Price Increase”, if any, means the product of (x) the Adjustment Factor multiplied by (y) the excess, if any, of (i) the Closing Revenue Run-Rate over (ii) 1.15 multiplied by the Base Revenue Run-Rate.

     “Closing Revenue Run-Rate Purchase Price Reduction”, if any, means the product of (x) the Adjustment Factor multiplied by (y) the excess, if any, of (i) 0.85 multiplied by the Base Revenue Run-Rate over (ii) the Closing Revenue Run-Rate.

     “COBRA Coverage” shall mean the continuation coverage requirements under Section 4980B of the Code and Part 6 of Title I of ERISA.

     “Code” means the United States Internal Revenue Code of 1986.

     “Commodity Exchange Act” means the United States Commodity Exchange Act of 1936.

     “Common Stock Cap” means 4.9% of the number of shares of outstanding Buyer Stock.

     “Confidentiality Agreement” means the Confidentiality Agreement between Buyer and Seller dated as of June 9, 2009.

     “Contingent Account” means (other than any Japanese Business Client, none of which can ever be a Contingent Account, and the Assignment Requirement for all such Clients shall be deemed to have been satisfied):

     (a) in respect of any Client account of the Van Kampen Business as of the Closing Measurement Date, (i) the portion (which may be 100%) of such account as to which the Client or any authorized representative of the Client has indicated orally or in writing to Seller or any of its Subsidiaries (if any Assignment Requirement applies to such Client account) or in writing (if no Assignment Requirement is applicable to such Client account) through any statement, notice or other communication (including an effective notice of termination that has been received (and not revoked) prior to the Closing Measurement Date) on or prior to the Closing Measurement Date that it intends to withdraw, and such indication has not been revoked, or that such portion is or will be under review for possible withdrawal, redemption or termination and as to which the Client or such representative has not withdrawn such indication, (ii) any Client account that has not satisfied any Assignment Requirement applicable to such account or (iii) that would not be a Contingent Account pursuant to the preceding clauses (i) or (ii), but with respect to which Client account such Client has provided prior to the Closing a written or oral indication to the Van Kampen Business that it plans to make additional investments in the relevant Client

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account, and such amounts are not actually funded on or prior to the Closing Measurement Date; provided that, in the case of this clause (iii), such Client account shall be considered a Contingent Account only to the extent of the unfunded additional investment amount previously indicated and only to the extent that such account together with such unfunded additional investment amount are set forth on a schedule provided by Seller to Buyer on or prior to the Closing Date; or

     (b) any new Client account of the Van Kampen Business that has not actually been funded on or prior to the Closing Measurement Date (even if such account has not been formally opened), but for which such Client has provided an oral or written indication on or prior to the Closing Measurement Date that it plans to fund; provided that such Client account shall be considered a Contingent Account only to the extent of such unfunded investment amount previously indicated and only to the extent that such account together with such unfunded investment amount are set forth on a schedule provided by Seller to Buyer on or prior to the Closing Date;

provided that, in either case, in the event of a Fund Change Announcement in respect of any Fund or Client (other than any Fund Change Announcement relating to a portfolio management team change for the Funds set forth on Exhibit C), then the applicable Client shall be deemed not to be a Contingent Account (and the Assignment Requirement for such Client shall be deemed to have been satisfied) at and after any such announcement.

     “Contract” means, any agreement, undertaking, lease, sublease, license, sublicense, contract, note, mortgage, indenture, power of attorney, guarantee, arrangement, commitment or other binding obligation, whether oral or written, express or implied, in each case as amended, supplemented, waived or otherwise modified.

     “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise (and “Controlled” and “Controlling” shall have a correlative meaning). For purposes of this definition, a general partner or managing member of a Person shall always be considered to Control such Person.

     “Controlled Group Liability” means any and all liabilities (i) under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the Code, (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, and (v) under corresponding or similar provisions of foreign Laws, in each case, other than such liabilities that arise solely out of, or relate solely to, the Assumed Benefit and Compensation Arrangements that are assumed by Buyer pursuant to Section 9.02(j).

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     “Covered Distribution Agreements” means each dealer, distribution, selling or other agreement under which a broker-dealer or other distribution agent, on the one hand, and Seller or one of its Subsidiaries, on the one hand, have agreed that such broker-dealer or agent will sell, market or otherwise distribute interests in one or more Morgan Stanley-Branded Transferred Clients and other Funds managed, advised or sub-advised by Seller or one of its Subsidiaries (other than the Transferred Entities).

     “Deferred Assets” means the deferred assets relating to the Van Kampen Business that represent distribution-related or shareholder servicing-related expenses with respect to a Fund that are of the type reflected on the Balance Sheet as “deferred charges.”

     “Delegation Period” means, with respect to any Non-Consenting Morgan Stanley Client, the period beginning on the Closing Date and ending on the earlier of (i) the satisfaction of the Assignment Requirements with respect to such Client or (ii) a date following the end of the True-Up Period that permits Seller a reasonable amount of time following the end of such period to wind up, or make other reasonable arrangements for Seller or its nominee to provide investment management services to, such Client (which date, in any event, shall not be less than three months following the end of the True-Up Period).

     “Distribution Agreement” means the Distribution Agreement between Morgan Stanley Smith Barney LLC and Invesco A ·I ·M Distributors, Inc., substantially in the form attached hereto as Exhibit D.

     “Economic Compensation” means the total amount of compensation that Seller expects to communicate to an applicable employee at fiscal year-end, which amount does not reflect amortization of prior year long-term incentive awards or mark-to-market adjustments of deferred compensation or other long-term incentives.

     “Encumbrances” means any lien, pledge, debt, charge, claim, encumbrance, security interest, option, mortgage, assessment, easement or any other similar restriction or limitation of any kind.

     “Equivalent Buyer Preferred Stock” means a series of preferred stock of Buyer which shall be substantially equivalent to the Buyer Stock other than by reason of not having voting rights and which shall automatically convert into Buyer Stock upon transfer by Seller or its Affiliates to any third party which is not an Affiliate of Seller.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

     “ERISA Affiliate” shall mean, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or

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business, or that is, or was at the relevant time, a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

     “Exchange Act” means the United States Securities Exchange Act of 1934.

     “Excluded Assets” means all accounts receivable for all management and incentive fees and distribution payments accrued before the Closing Date under each Covered Distribution Agreement and each Existing Advisory Contract in respect of the Morgan Stanley-Branded Transferred Clients and any other current assets (to be determined based on the accounting principles applied in preparation of the Balance Sheet) accrued before the Closing Date in respect of the Morgan Stanley-Branded Transferred Clients.

     “Excluded Fund Change Announcement” means any public announcement by Buyer (or, after Closing, by any Fund) (or by Seller, any of its Subsidiaries or (before Closing) any Fund to the extent described in clause (iv) of the definition of Fund Change Announcement) of any intention or proposal relating to (i) any matter that represents a continuation of any strategy or plan currently contemplated by Seller or its Affiliates and described on Section 3.22(h) of the Seller Disclosure Schedule, (ii) any Fund Merger contemplated by Section 7.05 or (iii) any re-branding of any Fund to reflect the change in ownership contemplated hereby as further described on Section 1.01(a) of the Buyer Disclosure Schedule.

     “Excluded Payables” means all accounts payable accrued before the Closing Date for sales commissions under the Covered Distribution Agreements in respect of the Morgan Stanley-Branded Transferred Clients and any other current liabilities (to be determined based on the accounting principles applied in preparation of the Balance Sheet) accrued before the Closing Date in respect of the Morgan Stanley-Branded Transferred Clients.

     “Existing Advisory Contract” means any existing investment advisory, sub-advisory, investment management, supervisory (in the case of UIT Funds), trust or similar Contract that the Van Kampen Business has with any Fund or Advisory Client as of the Closing or the date of this Agreement, as applicable.

     “FDIA” means the Federal Deposit Insurance Act of 1950.

     “FINRA” means the Financial Industry Regulatory Authority created in July 2007 through the consolidation of the National Association of Securities Dealers, Inc. and the member regulation, enforcement and arbitration functions of the NYSE.

     “Foreign Benefit Plan” means any Benefit and Compensation Arrangement that is governed by the Laws of a jurisdiction outside of the United

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States and maintained primarily for the benefit of one or more Foreign Employees.

     “Foreign Employee” means any (i) Van Kampen Business Employee who primarily resides or works in the United Kingdom or Japan, (ii) any former employee of the Van Kampen Business, who, while employed by the Van Kampen Business, primarily resided or worked in the United Kingdom or Japan or (iii) other Van Kampen Business Employee who primarily resides or works outside of the United States and who is added to Section 9.01(a) of the Seller Disclosure Schedule in accordance with the definition of Van Kampen Business Employees.

     “Fund” means, as of any date, any pooled investment vehicle, investment trust, investment company, unit investment trust, collective fund, collective trust, commodity pool or other collective or commingled investment vehicle, unit-linked life insurance fund, unit trust or where applicable, the corporation or trust of which it is a series, for which the Van Kampen Business acts or will, after a date prior to the Closing, act (i) as investment advisor, sub-advisor, trustee, manager, supervisor or sponsor or (ii) in a similar capacity under applicable Law, in each case, as of such date. Notwithstanding anything in this Agreement to the contrary, representations and warranties made by Seller in this Agreement with respect to Funds (except, for the avoidance of doubt, with respect to the calculation of Adjusted Assets Under Management and Revenue Run-Rate, and with respect to representations regarding Seller’s and its Affiliates actions with regard to the Funds) shall always be deemed to be made only with respect to, and only to the extent that, such Funds have been sponsored or created by, are 25% or more owned by, or have a majority of officers designated by Seller or its Affiliates.

     “Fund Change Announcement” means, other than an Excluded Fund Change Announcement, (i) any public announcement (whether before or after Closing, but prior to the date after which any applicable Assignment Requirement cannot be obtained in accordance with the terms of the applicable Existing Advisory Agreement or applicable law) by Buyer (or, after Closing, by any Fund) of any intention or proposal with respect to any particular Fund to effect any merger or closure of any Fund, (ii) in respect of any Fund branded “Van Kampen” or any derivative thereof, any public announcement (whether before or after Closing) by Buyer (or, after Closing, by any Fund) of any re-branding of the name of that Fund, (iii) any public announcement on or before Closing by Buyer of any intention or proposal with respect to any replacement of the portfolio management team (other than the replacement of any portfolio management team due to terminations by any such team members (unless such terminations result from such team members being informed by Buyer or its Subsidiaries that they will be terminated following the Closing) for any Fund or Advisory Client’s Investment Advisory Arrangement or (iv) any announcement by any Fund of any intention or proposal of Buyer to effect any of the changes described in any of the immediately preceding clauses (i), (ii) or (iii), which is announced during the

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respective time periods set forth in such immediately preceding clauses, but only to the extent that such intentions or proposals may be reasonably concluded to be required by Law to be disclosed in any filings required to be made by such Fund under the Investment Company Act, the Exchange Act or the Securities Act and subject to confirmation by Buyer regarding the accuracy of the description thereof.

     “Fund Merger” means (A) with respect to each ’40 Act Management Fund which is an open-end Fund, the merger or reorganization of such Fund with and into a newly created “shell” fund which is a series of one of the Delaware statutory trusts listed on Section 1.01(a) of the Buyer Disclosure Schedule, it being understood and agreed that as a result of such merger or reorganization, (i) the board of trustees of such surviving series fund shall consist of those persons set forth on Section 1.01(a) of the Buyer Disclosure Schedule and (ii) such surviving series fund shall become (or shall already be) party to a New Advisory Contract with a Subsidiary of Buyer, such New Advisory Contract to be on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of such Fund’s Existing Advisory Contract as in effect on the date hereof and (B) with respect to each Fund that is Registered with any Government Entity as an investment fund (or the equivalent) and is not a ’40 Act Management Fund, a Japan Fund or a UIT Fund, the merger of such Fund (or a similar appropriate conversion or consolidation of such Fund or its assets and liabilities) with and into a newly created “shell” fund, it being understood and agreed that such surviving fund shall become (or shall already be) party to a New Advisory Contract with a Subsidiary of Buyer, such New Advisory Contract to be on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract in effect on the date hereof.

     “GAAP” means generally accepted accounting principles in the United States as of the applicable reference date.

     “Government Entity” means any foreign or domestic, federal, state, provincial, county, city or local legislative, administrative or regulatory authority, agency, court, body or other governmental or quasi-governmental entity with competent jurisdiction, including any Self-Regulatory Organization and any such supranational body.

     “Home Owners’ Loan Act” means the Home Owners’ Loan Act of 1933.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     “IFRS” means the International Financial Reporting Standards adopted by the European Union.

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     “Indebtedness” means, with respect to any Person, without duplication, any of the following liabilities, whether secured (with or without limited recourse) or unsecured, contingent or otherwise: (i) all liabilities for borrowed money; (ii) all liabilities evidenced by bonds, debentures, notes or other similar instruments or under financing or capital leases; (iii) all liabilities for guarantees of another Person in respect of liabilities of the type set forth in clauses (i) and (ii); and (iv) all liabilities for accrued but unpaid interest expense and unpaid penalties, fees, charges and prepayment premiums that are payable, in each case, with respect to any of the obligations of a type described in clauses (i) through (iii) above.

     “Intellectual Property Rights” means all: (i) trademarks, service marks, domain names, logos, trade dress, and trade names, all applications and registrations for the foregoing, in any jurisdiction, and all goodwill associated therewith (collectively “Trademarks”); (ii) patents and patent applications registered or applied for in any jurisdiction (collectively “Patents”); (iii) trade secrets, confidential proprietary information, inventions and know-how (collectively, “Trade Secrets”); (iv) works of authorship and copyrights therein and thereto (including in software), and all registrations and applications therefor (collectively, “Copyrights”); and (v) any other similar type of proprietary intellectual property right to the extent entitled to legal protection as such.

     “Internal Revenue Service” or “IRS” means the Internal Revenue Service of the United States of America.

     “Investment Advisers Act” means the United States Investment Advisers Act of 1940.

     “Investment Advisory Arrangement” means a Contract under which a Person acts as (i) a trustee, an investment adviser or a sub-adviser to, or manages any investment or trading account of, any Client (including, with respect to Funds, as general partner, managing member or in a similar capacity) or (ii) a supervisor with respect to a UIT Fund.

     “Investment Company Act” means the United States Investment Company Act of 1940.

     “IP Matters Agreement” means the IP Matters Agreement between Seller (or Affiliates of Seller) and Buyer (or Affiliates of Buyer), substantially in the form attached hereto as Exhibit E.

     “Japanese Business Client” means any Client listed on Section 1.01(a) of the Seller Disclosure Schedule.

     “Japan Fund” means any Fund organized as, or as part of, a Japanese ITM structure.

     “Knowledge” means (i) when used with respect to Seller, the actual knowledge of the individuals listed on Section 1.01(a) of the Seller Disclosure

14

Schedule following reasonable inquiry under the circumstances (but without any obligation to notify any particular individuals of the transactions contemplated by this Agreement prior to the date hereof) and (ii) when used with respect to Buyer, the actual knowledge of the individuals listed on Section 1.01(a) of the Buyer Disclosure Schedule following reasonable inquiry under the circumstances (but without any obligation to notify any particular individuals of the transactions contemplated by this Agreement prior to the date hereof).

     “Law” means, with respect to any Person, any foreign, federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Government Entity that is binding upon or applicable to such Person or its properties or business, as amended unless expressly specified otherwise.

     “Legal Proceeding” means any judicial, legal, administrative, arbitral or other action, suit or other proceedings of any nature by or before any Government Entity.

     “Legacy Van Kampen Nonqualified Plans” means the Van Kampen Defined Contribution Equalization Plan f/k/a Defined Contribution Equalization Plan for Certain Employees of ACMR Profit Sharing and Savings Plan, the Van Kampen Investments Inc. Deferred Compensation Plan, the Retirement Benefit Equalization Plan for Certain Employees Participating in the American Capital Management & Research, Inc. Retirement Plan (VKBEP) and the Van Kampen Investments Inc. Long-Term Incentive Plan.

     “Material Adverse Effect” means, with respect to any Person or the Van Kampen Business, as applicable, a material adverse effect on (i) the condition (financial or otherwise), business, assets or results of operations of such Person and its Subsidiaries, taken as a whole, or the Van Kampen Business, taken as a whole, as applicable, excluding any effect to the extent resulting from (A) any change after the date hereof in Law or accounting standards, but only to the extent that such Person and its Subsidiaries, taken as a whole, or the Van Kampen Business, taken as a whole, as applicable, are not disproportionately adversely affected compared to other asset managers and providers of investment management products and services generally taking into account the relative mix of businesses of such Person or the Van Kampen Business (as applicable), on the one hand, and such other managers and providers, on the other hand; (B) any change arising after the date hereof in economic or business conditions locally or globally generally, but only to the extent that such Person and its Subsidiaries, taken as a whole, or the Van Kampen Business, taken as a whole, as applicable, are not disproportionately adversely affected compared to other asset managers and providers of investment management products and services generally taking into account the relative mix of businesses of such Person or the Van Kampen Business (as applicable), on the one hand, and such other managers and providers, on the other hand; (C) any events, conditions or trends in economic, business or

15

financial conditions generally affecting the investment management industry and arising after the date hereof, including changes occurring after the date hereof in prevailing interest rates, currency exchange rates and price levels or trading volumes in the United States or foreign securities markets, but only to the extent that such Person and its Subsidiaries, taken as a whole, or the Van Kampen Business, taken as a whole, as applicable, are not disproportionately adversely affected compared to other asset managers and providers of investment management products and services generally taking into account the relative mix of businesses of such Person or the Van Kampen Business (as applicable), on the one hand, and such other managers and providers, on the other hand; (D) any change in assets under management resulting from market changes in asset valuation or market price fluctuations generally; (E) acts of war, sabotage or terrorism or natural disasters occurring after the date hereof, and not specifically related to a Person or its Subsidiaries or the Van Kampen Business, as applicable; (F) the effects of the actions that are (i) expressly and specifically required by this Agreement, (ii) taken by such Person or its Subsidiaries (or Seller or its Subsidiaries in respect of the Van Kampen Business (as applicable)) with the prior written consent of the other party hereto or (iii) not taken by such Person or its Subsidiaries (or Seller or its Subsidiaries in respect of the Van Kampen Business (as applicable)) at the written request of the other party hereto or due to such other party’s refusal to provide its consent therefor if such consent was required hereunder; (G) in and of themselves, any changes in the trading price or trading volume of such Person’s common stock (to the extent such Person’s common stock is publicly traded) or the failure of such Person to meet estimates, projections, forecasts or earnings predictions (it being understood that this clause (G) shall not prevent a party from asserting that any fact, change, event, occurrence or effect that may have contributed to such change or failure independently constitutes or contributes to a Material Adverse Effect); or (H) the announcement or, other than in the case of any matter relating to requirements under Contracts or Law, consummation of the transactions contemplated by this Agreement; or (ii) such Person’s (or Seller’s or its Subsidiaries’ in respect of the Van Kampen Business (as applicable)) ability to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.

     “Merger Consideration” means the Aggregate Equity Consideration.

     “Merger Subsidiary” means Mollusk Corporation, a Delaware corporation and wholly owned Subsidiary of Buyer.

     “Morgan Stanley-Branded Transferred Client” means any Client of the Van Kampen Business whose respective investment manager or investment advisor is not a Transferred Entity, which Clients, as of the date hereof, are listed on Section 1.01(a) of the Seller Disclosure Schedule.

     “Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 3(37) of ERISA.

16

     “Multiple Employer Plan” means a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA.

     “Net Assets” means, with respect to a Fund, the sum of the assets of such Fund minus its liabilities.

     “New Advisory Contract” means, if required under applicable Law or the terms of the Investment Advisory Arrangement applicable thereto, with respect to a Fund or an Advisory Client, a new investment advisory, investment management, supervisory (in the case of a UIT Fund), trust or similar agreement with the Fund or the Advisory Client to be entered into as a result of the transactions contemplated by this Agreement pursuant to the Assignment Requirements. For a ’40 Act Management Fund, the term “New Advisory Contract” means a New Advisory Contract (either advisory or sub-advisory) approved in accordance with the requirements of Section 15 of the Investment Company Act (as such requirements may be modified by applicable Law, including any effective and applicable exemptive order issued by the SEC) excluding any “interim” new advisory contract (either advisory or sub-advisory) approved in reliance on Rule 15a-4 under the Investment Company Act.

     “NYSE” means the New York Stock Exchange.

     “Organizational Documents” means (i) with respect to any Person that is a corporation, its articles or certificate of incorporation or memorandum and articles of association, as the case may be, and bylaws, (ii) with respect to any Person that is a partnership, its certificate of partnership and partnership agreement, (iii) with respect to any Person that is a limited liability company, its certificate of formation and limited liability company or operating agreement, (iv) with respect to any Person that is a trust or other entity, its declaration or agreement of trust or other constituent document, and (v) with respect to any other Person, its comparable organizational documents, in each case, as has been amended or restated.

     “Owned Seller Intellectual Property Rights” means all Intellectual Property Rights (i) owned by Seller or any of its Affiliates and included in the Purchased Assets or (ii) owned by any of the Transferred Entities.

     “Permit” means all licenses, franchises, permits, certificates, registrations, orders, concessions, declarations, and other authorizations and approvals that are issued by or obtained from any Government Entity.

     “Permitted Encumbrance” means: (i) Encumbrances specifically reflected or reserved against or otherwise specifically disclosed in the Financial Statements; (ii) mechanics’, materialmen’s, warehousemen’s, carriers’, workers’, or repairmen’s liens or other similar common law or statutory Encumbrances arising or incurred in the ordinary course of business consistent with past practice

17

for sums not yet due and payable that are not, individually or in the aggregate with all other Permitted Encumbrances, material in respect of the Van Kampen Business, taken as a whole; (iii) statutory liens for Taxes, assessments and other governmental charges not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate reserves have been established on the Financial Statements; and (iv) other Encumbrances incurred in the ordinary course of business consistent with past practice since the date of the Financial Statements that are not, individually or in the aggregate with all other Permitted Encumbrances, material in respect of the Van Kampen Business, taken as a whole.

     “Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Government Entity.

     “Post-Closing Tax Period” means any Tax period beginning after the Closing Date; and, with respect to a Tax period that begins on or before the Closing Date and ends thereafter, the portion of such Tax period beginning after the Closing Date.

     “Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date; and, with respect to a Tax period that begins on or before the Closing Date and ends thereafter, the portion of such Tax period ending on the Closing Date.

     “Purchased Assets” means, other than the Excluded Assets, all right, title and interest of Seller and its Affiliates in and to all of the assets primarily related to the Van Kampen Business but only to the extent relating to the Morgan Stanley-Branded Transferred Clients, including, but not limited to:

     (a) all rights under the Existing Advisory Contracts in respect of the Morgan Stanley-Branded Transferred Clients (or, as applicable, the management, advisory, sub-advisory and/or related economic rights and interests of Seller or the applicable Affiliate of Seller that are part of the Van Kampen Business with respect to the Morgan Stanley-Branded Transferred Clients), in each case the sale or transfer of which is to be effected in the manner provided in this Agreement (whether by way of assignment, novation, merger or otherwise as further set forth herein);

     (b) all rights under the other Contracts primarily related to the Van Kampen Business but only to the extent relating to the Morgan Stanley-Branded Transferred Clients (other than (i) any Contract providing for the lease or sublease of real property not specifically identified as a Purchased Asset on Exhibit F and (ii) all Contracts of Seller or any of its Affiliates (other than any Transferred Entity) relating to the Van Kampen Business or any Fund or pursuant to which the Van Kampen Business or any Fund receives any benefit that will terminate with respect to, or otherwise be unavailable to, the Van Kampen Business or such

18

Fund, in each case as of Closing (all, as further described in Section 3.06 of the Seller Disclosure Schedule));

     (c) to the extent permitted by applicable Law, all information pertaining to, or necessary or useful in the calculation or demonstration of, the investment performance of the Morgan Stanley-Branded Transferred Clients (the “Track Record”), including, without limitation, to any Person, by publication or otherwise, the right to the Track Record and any information relating thereto;

     (d) all books and records relating to the Purchased Assets; provided that in the case of books and records that relate to the Van Kampen Business and to matters unrelated to the Van Kampen Business, Seller and its Subsidiaries may deliver or cause to be delivered copies of such books and records to the extent relating to the Van Kampen Business, including such materials relating to the portion of the Van Kampen Business conducted in connection with the Purchased Assets and Assumed Liabilities; and

     (e) all goodwill of Seller or its Affiliates associated with the Morgan Stanley-Branded Transferred Clients or the Purchased Assets, together with the right to represent to third parties that Buyer is the successor to the Van Kampen Business with respect to the Morgan Stanley-Branded Transferred Clients and the Purchased Assets.

     “Registered” means issued by, registered with, renewed by or the subject of a pending application before any Government Entity or domain name registrar.

     “Registrable Securities” means the Aggregate Equity Consideration and any securities which may be issued or distributed in respect thereof by way of stock dividend or stock split or other distribution, recapitalization or reclassification. As to any particular Registrable Securities, such Registrable Securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale by Seller thereof shall be or have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) such securities shall have been sold to the public in compliance with Rule 144 under the Securities Act or (iii) such securities shall have ceased to be outstanding.

     “Registration Statement” means any registration statement of Buyer under the Securities Act that permits the public offering of any of the Registrable Securities and the Shelf Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

     “Revenue Run-Rate” means, as of any specified date, the aggregate amount, without duplication, of all investment advisory, sub-advisory, administrative and other management fees for each investment management

19

account (excluding UIT Fund accounts) of each applicable Client of the Van Kampen Business payable to the Van Kampen Business pursuant to the relevant Investment Advisory Arrangement, determined by multiplying the Adjusted Assets Under Management for each such account at such date by the applicable stated annual fee rate for all such fees for such account in effect on such date or as provided for in Section 1.01(a) of the Buyer Disclosure Schedule. The calculation of the Revenue Run-Rate shall:

     (a) exclude (i) from revenue any performance-based, incentive, contingent or similar fees, securities lending fees and transaction revenues and (ii) the impact on fees of any increase or decrease in assets under management resulting from market appreciation or depreciation or currency fluctuation (except to the extent provided in clause (D) of Adjusted Assets under Management) from and after the Base Date (or in the case of an account established after the Base Date, after the date such account is established);

     (b) include only net revenues to the Van Kampen Business after giving effect to, and taking into account, any fee or expense waiver, rebate or cap, reimbursement obligation or similar offset, any amounts payable to a sub-adviser that is not a part of the Van Kampen Business (including any such amount deducted directly by or on behalf of a Client from the fee otherwise payable by such Client to the Van Kampen Business under the applicable Investment Advisory Arrangement);

     (c) with respect to any Fund Change Announcement, assume that the fee rate for the applicable Fund or Client was fixed at the amount thereof prior to the Fund Change Announcement; and

     (d) assume that the fee rates for all Japanese Business Clients were fixed at the amount thereof immediately prior to the date of this Agreement.

     “Scheduled Black-out Period” means the period from and including the fifteenth day of the third month of a fiscal quarter of Buyer to and ending two Business Days after the day on which Buyer publicly releases its earnings for such fiscal quarter.

     “SEC” means the United States Securities and Exchange Commission.

     “Securities Act” means the United States Securities Act of 1933.

     “Self-Regulatory Organization” means (i) any “self-regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securities exchange, futures exchange, commodities exchange or contract market and (iii) any other exchange or corporation or similar self-regulatory body or organization.

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     “Seller Disclosure Schedule” means the disclosure schedule dated the date hereof regarding this Agreement that has been provided by Seller to Buyer prior to the execution of this Agreement.

     “Seller Equity Awards” means, collectively, the Seller Stock Options and the Seller RSUs.

     “Seller Equity Plan” means any Benefit and Compensation Arrangement under which Seller has granted compensatory stock options, restricted stock units or any other compensatory awards based on shares of Seller common stock.

     “Seller Group” means, with respect to federal income Taxes, the affiliated group of corporations (as defined in Section 1504(a) of the Code) of which Seller is a member and, with respect to state, local or foreign income or franchise Taxes, the consolidated, combined or unitary group of which Seller or any of its Affiliates is a member.

     “Seller RSU” means a right representing a contractual entitlement to one share of Seller common stock in accordance with the terms of the relevant Seller Equity Plan that is outstanding immediately prior to Closing.

     “Seller Stock Option” means a right representing a contractual entitlement to purchase one share of Seller common stock in accordance with the terms of the relevant Seller Equity Plan that is outstanding immediately prior to Closing.

     “Shelf Prospectus” means the prospectus included in any Shelf Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Shelf Registration Statement and all other amendments and supplements to such prospectus, including post-effective amendments, and all materials incorporated by reference in such prospectus.

     “Shelf Registration Statement” means a Registration Statement of Buyer filed with the SEC on either (a) Form S-3 (or any successor form or other appropriate form under the Securities Act) or (b) if Buyer is not permitted to file a Registration Statement on Form S-3, an evergreen Registration Statement on Form S-1 (or any successor form or other appropriate form under the Securities Act), in each case for an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the Securities Act covering Registrable Securities. To the extent that Buyer is a “well-known seasoned issuer” (as defined in Rule 405 under the Securities Act), a “Shelf Registration Statement” shall be deemed to refer to an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) on Form S-3.

     “Sub-Advised Fund” means any Fund for which the Van Kampen Business acts as sub-advisor and not as the primary investment advisor and that is specifically identified in Section 3.21(a) of the Seller Disclosure Schedule.

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     “Subsidiary” means, with respect to any Person, any entity (i) of which such Person or a subsidiary of such Person is a general partner, managing member or the like or (ii) of which at least a majority of the securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions with respect to such entity are at the time directly or indirectly owned by such Person and/or one or more of its Subsidiaries. Notwithstanding anything in this Agreement to the contrary, in no event shall any Fund of, or managed by, any Person be considered to be a Subsidiary of such Person.

     “Tax” means (i) any tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to, withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any governmental authority (domestic or foreign) responsible for the imposition of any such tax (a “Taxing Authority”) and (ii) with respect to any Transferred Entity, any liability for the payment of any amount of the type described in the immediately preceding clause (i) as a result of any Transferred Entity being a member of an affiliated, consolidated, combined or unitary group with any other corporation at any time on or prior to the Closing Date.

     “Tax Returns” means all reports, returns, information returns, elections, agreements, declarations, or other documents of any nature or kind (including any attached schedules, supplements and additional or supporting material) filed or required to be filed with respect to Taxes, including any claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto).

     “Temporary Investment Services Agreement” means the Temporary Investment Services Agreement, by and between Buyer (or Affiliates of Buyer) and Seller (or Affiliates of Seller), in the form attached hereto as Exhibit G with respect to open-end U.S. registered investment companies (and in respect of the arrangements contemplated by Section 7.05(a)(v)(A) of this Agreement) and, as applicable, any substantially similar agreements, mutatis mutandis, with respect to all other investment funds and/or separately managed accounts, of other types or in other jurisdictions, including jurisdictions outside of the United States, pursuant to which Buyer (or Affiliates of Buyer) and/or Seller (or Affiliates of Seller) may provide the temporary advisory, sub-advisory, delegated advisory or other similar services contemplated by Section 7.05(a)(v) of this Agreement. For the avoidance of doubt, the parties agree and acknowledge that the Temporary Investment Services Agreement may be modified, changed and/or otherwise altered from the form attached hereto as Exhibit G to the extent necessary (i) to comply with (A) applicable Law (including Rule 15a-4 under the Investment Company Act and any other rules and regulations of the applicable jurisdiction) or (B) any necessary policies and procedures with respect to the respective open-end U.S. registered investment company, other investment fund or separately

22

managed account, or (ii) to implement the intent of Section 7.05(a)(v) of this Agreement.

     “Transferred Entities” means the Van Kampen Parent and its Subsidiaries, all of which are listed on Section 1.01(a) of the Seller Disclosure Schedule.

     “Transition Services Agreement” means the Transition Services Agreement between Seller (or Affiliates of Seller) and Buyer (or Affiliates of Buyer), substantially in the form attached hereto as Exhibit H.

     “True-Up Period” means the period beginning on the Closing Date and concluding on the date that is 180 days after the Closing Date.

     “UIT Fund” means a ’40 Act Fund that is classified under Section 4 of the Investment Company Act as a “unit investment trust.”

     “U.S. Benefit Plan” means any Benefit and Compensation Arrangement that is governed by the Laws of the United States and maintained in the United States primarily for the benefit of one or more Van Kampen Business Employees residing or working in the United States.

     “U.S. Fund” means a Fund organized under the Laws of any state of the United States.

     “Van Kampen Business” means the business of managing investment assets, mutual funds and other collective investment vehicles (including, for the sake of clarity, any UIT Fund) and providing investment management products and services, and any promotional, marketing, distribution or investor servicing services relating thereto and any administrative, custodial, transfer agency or other ancillary services, relating to any such products and services, as conducted by the Transferred Entities or by Seller or any of its Subsidiaries (other than the Transferred Entities) but in this latter case only in respect of the Morgan Stanley-Branded Transferred Clients. For the avoidance of doubt, a reference to the term “Van Kampen Business” (i) is not a reference to the Funds themselves and (ii) includes all of the businesses conducted by the Transferred Entities, other than the provision by the Transferred Entities of sub-advisory services to Funds outside the Van Kampen fund family (such fund family including, for purposes of this definition, Funds that are Morgan Stanley-Branded Transferred Clients) through portfolio managers that are not Van Kampen Business Employees as described on Section 1.01(a) of the Seller Disclosure Schedule (the “Excluded Transferred Entity Business”).

     “Van Kampen Business Employees” means those employees set forth on Section 9.01(a) of the Seller Disclosure Schedule, as such Section 9.01(a) of the Seller Disclosure Schedule is required to be updated pursuant to Section 9.01 and may otherwise be updated prior to the Closing Date to reflect terminations and hires (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)) and

23

reassignments (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)) or as may be mutually agreed to by Buyer and Seller.

     “Van Kampen ’40 Act Funds” means the ’40 Act Management Funds that are neither Morgan Stanley-Branded Transferred Clients nor Sub-Advised Funds.

     “Van Kampen Material Adverse Effect” means a Material Adverse Effect in respect of the Van Kampen Business.

     “Van Kampen Parent” means Van Kampen Investments Inc., a Delaware corporation.

     “Van Kampen Seed Capital” means all of the equity interests held by Seller, any of its Subsidiaries or any of the Transferred Entities in the Van Kampen Seeded Funds as more fully described in Section 1.01(a) of the Seller Disclosure Schedule.

     “Van Kampen Seed Capital Closing NAV” means, as of the Business Day immediately preceding the Closing Date, the net asset value of the Van Kampen Seed Capital for the applicable Van Kampen Seeded Fund transferred to Buyer pursuant to Section 7.09 as calculated in accordance with the terms of the applicable Van Kampen Seeded Fund.

     “Van Kampen Seeded Funds” means all of the Funds listed in Section 1.01(a) of the Seller Disclosure Schedule under the heading “Van Kampen Seeded Funds”.

     (a) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
’40 Act Fund Financial Report	3.22(d)(i)
368 Reorganization	Recitals
2009 Bonus Plan Participant	9.02(b)(i)
2009 Bonus Plan	9.02(b)(i)
2009 Deferred Compensation Account	9.02(b)(ii)
2009 Long-Term Incentive Award	9.02(b)(i)
2009 LTI Qualifying Terms	9.02(b)(i)
2009 LTI Value	9.02(b)(ii)
2010 Incentive Compensation Programs	9.02(c)
Accounting Referee	5.08(e)
Affiliate Arrangement	3.30
Aggregate Post-Closing Buyer Cash Payments	2.10(b)(i)
Agreement	Preamble
Allocation Statement	2.07(b)
Alternative Transaction Structure	7.11

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Term	Section
Alternative Transaction Structure Election	7.11
Anti-trust Counsel Only Material	7.01(c)
Apportioned Obligations	8.05
Balance Sheet	3.11(a)
Balance Sheet Date	3.11(a)
Base Revenue Schedule	3.21(a)
Buyer	Preamble
Buyer Adviser	4.13
Buyer Balance Sheet	4.09(a)
Buyer COI Price	2.10(b)(ii)
Buyer Deductible Cash Deferred Compensation Awards	9.02(c)
Buyer Deductible Dividend Equivalent Amounts	9.05(b)
Buyer Deductible Seller Equity Awards	9.05(b)
Buyer Financial Statements	4.08(d)
Buyer Indemnified Parties	11.02(a)
Buyer Paying Agent Costs	9.07(d)
Buyer Proposed Straddle Period Position	8.06(b)
Buyer Required Approvals	4.04
Buyer SEC Reports	4.08(a)
Cap	11.02(a)(i)(C)
Cash Deferred Compensation Awards	9.06(b)
Cash Increase Amount	2.05(b)(i)
Cash Reduction Amount	2.05(a)(i)
Closing	2.04(a)
Closing Balance Sheet	5.08(e)
Closing Revenue Run-Rate Purchase Price Adjustment	2.07(c)
Compensation Related Tax Benefit	9.07(c)
Composites	3.24(a)
Copyrights	1.01(a)
Corresponding Seller Straddle Period Position	8.06(b)
CTA	3.20(c)
Damages	11.02(a)
De Minimis Amount	11.02(a)(i)(A)
Dedicated Location	7.16
Deductible	11.02(a)(i)(B)
Delegation Arrangement	7.05(a)(v)(B)
Demand Registration Statement	6.06(b)
DGCL	2.02(a)
Disclosing Party	7.13(c)
Effective Time	2.02(b)
Equity Increase Amount	2.05(b)(ii)

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Term	Section
Equity Reduction Amount	2.05(a)(ii)
Equity Rights	3.10(c)
Estimated Closing Balance Sheet	5.08(e)
Excess Post-Closing Buyer Cash Payment	2.10(a)
Excess Section 2.05(d) Amount	2.05(d)
Excluded Transferred Entity Business	1.01(a)
Financial Statements	3.11(a)
Form ADV	3.20(b)(i)
Form BD	3.20(e)
Fund Change	1.01(a)
Fund Financial Statements	3.22(d)(i)
Fund Merger Proxy Statement Prospectus	7.05(b)(ii)
Fundamental Representations	11.01
GIPS	3.24(a)
GRA	8.03(g)
Income Statement	3.11(a)
Indemnified Party	11.03(a)
Indemnifying Party	11.03(a)
Jersey City Site	7.16
Leave Recipients	9.01(d)
Loss	8.09(a)
Material Contract	4.20(a)
Merger	2.02(a)
Merger Consideration Percentage	2.10(b)(iii)
Necessary Arrangements and Systems	9.08(b)
Negative Consent Notice	7.05(d)
Non-Consenting Morgan Stanley Client	7.05(a)(v)(B)
Notice	7.05(c)
Other Included Employees	9.01(a)
Patents	1.01(a)
PFIC	4.22(b)(ii)
Post-Closing Cash Cap	2.10(b)(iv)
Potential Contributor	11.06
Potential Van Kampen Business Employees	9.01(a)
Process Agent	13.06(b)
Prospectus	3.22(e)
PTE 84-14	3.21(d)
QPAM	3.21(d)
Receiving Party	7.13(c)
Removed Van Kampen Business Employee	9.01(a)
Reports	3.22(e)
Section 8.06(b) Schedule	8.06(b)
Seller	Preamble
Seller 401(k) Plans	9.02(f)
Seller Compensation Committee	9.02(b)

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Term	Section
Seller Indemnified Parties	11.02(b)
Seller Required Approvals	3.05(a)
Seller Retiree Welfare Benefits Arrangements	9.02(g)
Seller’s Ownership Limit	7.15(b)
Shelf Period	6.06(b)
Significant Contracts	3.18(b)
Specified Contracts	3.18(a)
Standstill Period	5.04(a)
Straddle Period	8.09(b)
Surviving Corporation	2.02(a)
Tax Benefit	8.09(c)
Taxing Authority	1.01(a)
Third Party Claim	11.03(a)
Trademarks	1.01(a)
Track Record	1.01(a)
Trade Secrets	1.01(a)
Transfer	5.03(b)
Transfer Date	9.01(c)
Transferred Employee	9.01(c)
Transferred Entities Required Approvals	3.05(b)
Transferred Employee Agreement	9.01(f)
Transferred Entity Employees	9.01(a)
Transfer Taxes	8.04
Transferring Team	7.05(c)
Treasury Rate	5.08(d)
Van Kampen Business Employee Information List	3.14(j)
Warranty Breach	11.02(a)(i)
Welfare Benefits	9.02(h)
Work-around	2.08

     Section 1.02. Other Definitional and Interpretative Provisions. The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in

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this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any Schedules hereto, all such amendments, modifications or supplements must also exist prior to the date hereof and be listed in the appropriate Schedule. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any and all applicable Law (including, for the sake of clarity, the rules and regulations thereunder), as amended.

ARTICLE 2
Sale and Merger Transactions

     Section 2.01. Sale and Purchase of the Purchased Assets. (a) Upon the terms and subject to the conditions of this Agreement (including, for the sake of clarity, Section 7.05 hereof), at the Closing:

     (i) Buyer agrees to purchase from Seller and Seller agrees to sell, convey, transfer, assign and deliver, or cause to be sold, conveyed, transferred, assigned and delivered, to Buyer at the Closing, free and clear of all Encumbrances, other than Permitted Encumbrances, all of Seller’s right, title and interest in, to and under the Purchased Assets; and

     (ii) Buyer agrees to assume all of the Assumed Liabilities.

     (b) In consideration for the sale of the Purchased Assets, Buyer shall pay Seller the Asset Consideration at the Closing pursuant to Section 2.04.

     Section 2.02. Merger of Van Kampen Parent. (a) Subject to the terms and conditions of this Agreement, at the Effective Time, Van Kampen Parent shall be merged (the “Merger”) with and into Merger Subsidiary in accordance with the Delaware General Corporation Law (the “DGCL”), whereupon the separate existence of Van Kampen Parent shall cease, and Merger Subsidiary shall be the surviving corporation (the “Surviving Corporation”). The Merger shall be effectuated pursuant to the Agreement and Plan of Merger.

     (b) On the Closing Date, Van Kampen Parent and Merger Subsidiary shall file a certificate of merger with the Delaware Secretary of State and make all other filings or recordings required by the DGCL in connection with the Merger. The Merger shall become effective at such date and time (the “Effective Time”)

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as the certificate of merger is duly filed with the Delaware Secretary of State (or at such later date and time as may be specified in the certificate of merger).

     (c) From and after the Effective Time, the Surviving Corporation shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of Van Kampen Parent and Merger Subsidiary, all as set forth in the DGCL.

     (d) The certificate of incorporation of Merger Subsidiary in effect at the Effective Time shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with applicable Law, except that Item 1 thereof shall read as follows: “The name of the corporation is Van Kampen Investments Inc.” The bylaws of Merger Subsidiary in effect at the Effective Time shall be the bylaws of the Surviving Corporation until amended in accordance with applicable Law.

     (e) From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of Merger Subsidiary at the Effective Time shall be the officers of the Surviving Corporation.

     (f) At the Effective Time, by virtue of the Merger and without any action on the part of Van Kampen Parent, Merger Subsidiary, Buyer or any holder of such securities, each share of Van Kampen Parent common stock outstanding immediately prior to the Effective Time shall no longer be outstanding and shall automatically be converted into the right to receive the Merger Consideration to be paid by Buyer in the manner set forth in Section 2.04.

     (g) At the Effective Time, by virtue of the Merger and without any action on the part of Van Kampen Parent, Merger Subsidiary, Buyer or any holder of such securities, each share of common stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

     Section 2.03. Purchase Price. (a) The aggregate amount payable by Buyer to Seller in consideration of the transactions contemplated by Sections 2.01 and 2.02 shall be the Aggregate Purchase Price.

     (b) The Aggregate Purchase Price shall be paid as provided in Section 2.04, and shall be subject to adjustment as provided in Sections 2.05, 2.06, and 5.08 and shall be allocated pursuant to Section 2.07.

     Section 2.04. Closing. (a) The closing (the “Closing”) of the transactions contemplated by Sections 2.01, 2.02 and 2.03 shall take place at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, as

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soon as possible, but in no event later than the month-end following two Business Days after the conditions set forth in Article 10 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at the Closing) have been satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit of such conditions, or at such other time or place as Buyer and Seller may agree. Notwithstanding the foregoing or anything else in this Agreement, (i) in no event shall Buyer be obligated to consummate the Closing prior to April 30, 2010 and (ii) Buyer shall be entitled to delay the Closing to a date not later than June 30, 2010 if, subject to receipt of the certificate contemplated by Section 10.02(c) as of April 30, 2010, Buyer agrees in writing that the conditions to Closing set forth in Sections 10.01(c), 10.02(a), 10.02(b) and 10.02(c) shall not be conditions to Closing under Article 10 hereof (other than Sections 10.02(a) and 10.02(c), but only in respect of Seller’s continuing obligation thereafter to comply with its covenants hereunder and the obligation to certify as such pursuant to Section 10.02(c)), in which case (x) references to the “Closing” shall be deemed references to April 30, 2010 for all purposes of determining the Closing Revenue Run-Rate Purchase Price Adjustment under Section 2.05 and the true-up under Section 2.06 (including the definitions used therein) and (y) Closing shall occur on or before the date specified by Buyer (in coordination with Seller) for the delayed Closing (and, in any event, on or before June 30, 2010).

     (b) At the Closing:

     (i) Buyer shall deliver to Seller (or any Affiliates of Seller designated by Seller) the Aggregate Cash Consideration (as adjusted in accordance with Section 2.05, if applicable) in immediately available funds by wire transfer to an account of Seller with a bank designated by Seller, by notice to Buyer, which notice shall be delivered not later than two Business Days prior to the Closing Date.

     (ii) Buyer shall issue to Seller (or any Affiliates of Seller designated by Seller in writing) the stock certificates representing the Aggregate Equity Consideration (as adjusted in accordance with Section 2.05, if applicable) or, if uncertificated, other appropriate evidence of ownership reasonably acceptable to Seller representing the Aggregate Equity Consideration, registered in the name of Seller or its designee, free and clear of any Encumbrances (other than restrictions on transfer which arise under applicable securities Laws and this Agreement).

     (iii) Seller and Buyer and their respective Subsidiaries that are a party thereto, if any, shall execute and deliver each of the Ancillary Agreements.

     (iv) Subject to the provisions hereof (including, for the sake of clarity, Section 7.05), Seller shall deliver to Buyer such deeds, bills of sale, endorsements, consents, assignments and other good and sufficient

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instruments of conveyance and assignment as the parties and their respective counsel shall deem reasonably necessary to vest in Buyer all right, title and interest in, to and under the Purchased Assets.

     (v) Seller shall deliver, or cause to be delivered, to Buyer or its designee certificates (to the extent such shares are held in certificated form), or other documentation or evidence reasonably acceptable to Buyer, representing the Van Kampen Seed Capital then owned by Seller or one of its Subsidiaries duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto, free and clear of any Encumbrances (other than restrictions on transfer which arise under applicable securities Laws and this Agreement).

     (vi) Seller shall deliver to Buyer a receipt acknowledging payment of the Aggregate Equity Consideration and the Aggregate Cash Consideration by Buyer in full satisfaction of Buyer’s obligations under Section 2.04(b)(i), Section 2.04(b)(ii) and Section 7.09(b) (but subject to any further obligations contained in this Agreement).

     (vii) Seller shall deliver to Buyer the certificates referenced in Section 10.02(c) and Section 10.02(e).

     (viii) Buyer shall deliver to Seller the certificates referenced in Section 10.03(c).

     Section 2.05. Closing Revenue Run-Rate Purchase Price Adjustment.

     (a) If the Closing Revenue Run-Rate is less than 0.85 multiplied by the Base Revenue Run-Rate, then the Aggregate Purchase Price shall be reduced as follows:

     (i) the Aggregate Cash Consideration shall be reduced by an amount (the “Cash Reduction Amount”) equal to (x) the Closing Revenue Run-Rate Purchase Price Reduction multiplied by (y) one-third; and

     (ii) the Aggregate Equity Consideration shall be reduced by a number of shares (the “Equity Reduction Amount”) equal to the quotient (rounded to the nearest whole share) of (A) the Closing Revenue Run-Rate Purchase Price Reduction minus the Cash Reduction Amount over (B) the Buyer Signing Price;

     (b) If the Closing Revenue Run-Rate is greater than 1.15 multiplied by the Base Revenue Run-Rate, then the Aggregate Purchase Price shall be increased as follows:

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     (i) the Aggregate Cash Consideration shall be increased by an amount (the “Cash Increase Amount”) equal to (x) the Closing Revenue Run-Rate Purchase Price Increase multiplied by (y) one-third; and

     (ii) the Aggregate Equity Consideration shall be increased by a number of shares (the “Equity Increase Amount”) equal to the quotient (rounded to the nearest whole share) of (A) the Closing Revenue Run-Rate Purchase Price Increase minus the Cash Increase Amount over (B) the Buyer Signing Price.

     (c) Any adjustment resulting from the application of this Section 2.05 is referred to in this Agreement as the “Closing Revenue Run-Rate Purchase Price Adjustment”.

     (d) Notwithstanding anything to the contrary in this Section 2.05 or in Section 2.06, unless Seller exercises an Alternative Transaction Structure Election pursuant to Section 7.11, Buyer and Seller agree that (i) any Cash Increase Amount or Cash Reduction Amount, as the case may be, shall be allocated to the Purchased Assets (as opposed to the Transferred Entities), to the extent that any corresponding increase or reduction in the Aggregate Purchase Price pursuant to this Section 2.05 or to Section 2.06, as the case may be, is attributable to such Purchased Assets as determined pursuant to Section 2.05(e), and (ii) the remainder of such Cash Increase Amount or Cash Reduction Amount, if any, along with any Equity Increase Amount or Equity Reduction Amount, shall be allocated to the Transferred Entities; provided that, if any increase or reduction in the Aggregate Purchase Price pursuant to Section 2.05 or 2.06, as the case may be, that is attributable to such Purchased Assets as determined pursuant to Section 2.05(e), exceeds the amount of the corresponding Cash Increase Amount or Cash Reduction Amount, as the case may be (such excess, the “Excess Section 2.05(d) Amount”), then (x) the Cash Increase Amount or Cash Reduction Amount, as the case may be, shall be increased by an amount equal to such Excess Section 2.05(d) Amount, and (y) the Equity Increase Amount or Equity Reduction Amount shall be reduced by a number of shares equal to the quotient (rounded to the nearest whole share) of (A) such Excess Section 2.05(d) Amount over (B) the Buyer Signing Price.

     (e) The portion of any increase in the Aggregate Purchase Price pursuant to this Section 2.05 or to Section 2.06, as the case may be, that is attributable to the Purchased Assets shall be equal to a fraction, the numerator of which is (i) the excess, if any, of the Closing Revenue Run-Rate over the Base Revenue Run-Rate, determined in each case taking into account only the Purchased Assets, and (ii) the denominator of which is the excess of the Closing Revenue Run-Rate over the Base Revenue Run-Rate. The portion of any reduction in the Aggregate Purchase Price pursuant to this Section 2.05 or to Section 2.06, as the case may be, that is attributable to the Purchased Assets shall be equal to a fraction, the numerator of which is (i) the excess, if any, of the Base Revenue Run-Rate over the Closing Revenue Run-Rate, determined in each case

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taking into account only the Purchased Assets, and (ii) the denominator of which is the excess of the Base Revenue Run-Rate over the Closing Revenue Run-Rate. In the case that any fraction calculated under this Section 2.05(e) is greater than 1, such fraction shall be deemed to equal 1.

     Section 2.06. True-Up. (a) Upon the expiration of the True-Up Period, the parties shall recalculate the Closing Revenue-Run Rate Purchase Price Adjustment as of the Closing Date, except that the Adjusted Assets Under Management with respect to the Contingent Accounts shall be included in the calculation of such recalculated Closing Revenue Run-Rate Purchase Price Adjustment:

     (i) in the case of any Contingent Account pursuant to clause (a)(i) of the definition thereof that (A) has satisfied any Assignment Requirements applicable to such account not later than the final day of the True-Up Period or (B) (i) has not terminated the Investment Advisory Arrangement (or has, on or before the final day of the True-Up Period (and, in the case of a New Advisory Contract with the Van Kampen Business, after Closing), entered into a New Advisory Contract with the Van Kampen Business, Buyer or any of its Affiliates on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract) and (ii) continues to be a Client of the Van Kampen Business, Buyer or any of its Affiliates on the final day of the True-Up Period (unless, in the case of this clause (B), Buyer or its applicable Affiliate will be required to terminate such Investment Advisory Arrangement due to the failure to satisfy the Assignment Requirements by such final day), to the extent of the amount by which (x) the reduction made to Adjusted Assets Under Management in respect of any such Contingent Account for purposes of the original calculation of the Closing Revenue Run-Rate (assuming that calculation had been done as of the Closing Date) exceeds (y) the amount of the redemptions, withdrawals or terminations that actually occur with respect to such account prior to the final day of the True-Up Period;

     (ii) in the case of any Contingent Account solely pursuant to clause (a)(ii) of the definition thereof that has satisfied any Assignment Requirements applicable to such account not later than the final day of the True-Up Period, to the extent of the reduction made to Adjusted Assets Under Management in respect of any such Contingent Account for purposes of the original calculation of the Closing Revenue Run-Rate (assuming that calculation had been done as of the Closing Date);

     (iii) in the case of any Contingent Account pursuant to clause (a)(iii) or (b) of the definition thereof, to the extent of amounts actually funded in the account not later than the final day of the True-Up Period; and

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     (iv) in the case of any Contingent Account relating to a Fund with respect to which a Fund Change Announcement has occurred, and assuming, in the case of any Fund Change Announcement relating to a portfolio management team change for the Funds set forth on Exhibit C, that such Fund has satisfied any Assignment Requirements, to the extent of the full amount of such Contingent Account.

     (b) If such recalculation yields:

     (i) a reduced Closing Revenue Run-Rate Purchase Price Reduction, an increased Closing Revenue Run-Rate Purchase Price Increase or an amount that would give rise for the first time to a Closing Revenue Run-Rate Purchase Price Increase, then Buyer shall pay to Seller an amount that is equal to the amount of such reduction to the Closing Revenue Run-Rate Purchase Price Reduction, the amount of such increase to the Closing Revenue Run-Rate Purchase Price Increase or the amount of such Closing Revenue Run-Rate Purchase Price Increase (as applicable) as soon as is reasonably practicable after, but in any event within three Business Days of, the date upon which the recalculation described in this Section 2.06(b)(i) is made, with such payment increasing the Aggregate Cash Consideration and the Aggregate Equity Consideration in the manner described in Section 2.05(b); or

     (ii) an increased Closing Revenue Run-Rate Purchase Price Reduction, a reduced Closing Revenue Run-Rate Purchase Price Increase or an amount that would give rise for the first time to a Closing Revenue Run-Rate Purchase Price Reduction, then Seller shall pay to Buyer an amount that is equal to the amount of such increase to the Closing Revenue Run-Rate Purchase Price Reduction, the amount of such reduction to the Closing Revenue Run-Rate Purchase Price Increase or the amount of the Closing Revenue Run-Rate Purchase Price Reduction (as applicable) as soon as is reasonably practicable after, but in any event within three Business Days of, the date upon which the recalculation described in this Section 2.06(b)(ii) is made, with such payment reducing the Aggregate Cash Consideration and the Aggregate Equity Consideration in the manner described in Section 2.05(b).

     (c) Any reduction or increase in the Aggregate Cash Consideration pursuant to this Section 2.06 shall be payable in immediately available funds by wire transfer to an account of Buyer or Seller, as the case may be, with a bank designated by such receiving party. Any reduction or increase in the Aggregate Equity Consideration shall be payable by delivering to Buyer or Seller, as the case may be, stock certificates representing such adjustment to the Aggregate Equity Consideration pursuant to this Section 2.06 (with the number of shares of Buyer Stock to be delivered calculated based on the Buyer Signing Price) or, if the Aggregate Equity Consideration is uncertificated, other appropriate evidence of ownership reasonably acceptable to such receiving party.

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     (d) For purposes of this Section 2.06, all references to the Closing Measurement Date included in the definitions of Adjusted Assets Under Management and Closing Revenue Run-Rate shall be deemed references to the Closing Date.

     Section 2.07. Allocation of Purchase Price. (a) Buyer and Seller agree that (i) the Asset Consideration shall consist solely of a portion of the Aggregate Cash Consideration, (ii) the Merger Consideration shall consist solely of the Aggregate Equity Consideration and (iii) notwithstanding anything to the contrary in Section 7.09(b), the consideration for the sale of the Van Kampen Seed Capital of the Van Kampen Seeded Funds shall consist solely of an amount of cash equal to the Van Kampen Seed Capital Closing NAV for the Van Kampen Seeded Funds, which amount shall consist of a portion of the Aggregate Cash Consideration. Exhibit I attached hereto sets forth the parties allocation of the Aggregate Cash Consideration and the Aggregate Equity Consideration in accordance with the preceding sentence.

     (b) As soon as practicable, but in no event later than 60 days, after the Closing, Buyer shall deliver to Seller a statement (the “Allocation Statement”) allocating the Asset Consideration (plus Assumed Liabilities, to the extent properly taken into account under Section 1060 of the Code) among the Purchased Assets in accordance with Section 1060 of the Code. If within 20 days after the delivery of the Allocation Statement Seller notifies Buyer in writing that Seller objects to the allocation set forth in the Allocation Statement, Buyer and Seller shall use reasonable best efforts to resolve such dispute within 30 days. In the event that Buyer and Seller are unable to resolve such dispute within 30 days, Buyer and Seller shall jointly cause the Accounting Referee to resolve the disputed items. Upon resolution of the disputed items, the allocation reflected on the Allocation Statement shall be adjusted to reflect such resolution. The costs, fees and expenses of the Accounting Referee shall be borne equally by Buyer and Seller.

     (c) Seller and Buyer agree to (i) be bound by the final Allocation Statement and (ii) act in accordance with the final allocation in the preparation, filing and audit of any Tax return (including filing Form 8594 with its federal income Tax return for the taxable year that includes the date of the Closing).

     (d) If an adjustment is made with respect to the Aggregate Purchase Price pursuant to any of Sections 2.06, 2.07, 2.08 or 11.02, Exhibit I and the Allocation Statement shall be adjusted as mutually agreed by Buyer and Seller (and, in the case of the Allocation Statement, in accordance with Section 1060 of the Code), using the procedures set forth in Section 2.07(b), mutatis mutandis.

     (e) Not later than 60 days prior to the filing of their respective Forms 8594 relating to this transaction, each party shall deliver to the other party a copy of its Form 8594.

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     Section 2.08. Assignment of Contracts and Rights. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Purchased Asset or any right thereunder if an attempted or actual assignment, without the consent of a third party, would constitute a breach or in any way adversely affect the rights of Buyer or Seller thereunder. Seller will use reasonable best efforts to obtain, or cause to be obtained, on or prior to the Closing Date, the consent of the other parties to any such Purchased Asset or any claim or right or any benefit arising thereunder for the assignment thereof to Buyer as Buyer may request. Buyer will cooperate with Seller, at no additional cost to Buyer, in such manner as may reasonably be requested in connection therewith. If such consent is not obtained on or prior to the Closing Date, Seller shall continue to use reasonable best efforts to obtain any such consent for a period of 90 days after the Closing Date, and in the event that any such consent is not obtained by the Closing Date, or if an attempted assignment thereof would be ineffective or would adversely affect the rights of Seller thereunder so that Buyer would not in fact receive all such rights, Seller and Buyer will cooperate in a mutually agreeable arrangement (a “Work-around”) under which Buyer would obtain the benefits and assume the obligations thereunder in accordance with this Agreement, including sub-contracting, sub-licensing, or sub-leasing to Buyer, or under which Seller would enforce for the benefit of Buyer, with Buyer assuming Seller’s obligations to the extent Buyer would have been responsible therefor if such consent had been obtained and to the extent Buyer or its Affiliates receive the benefits thereof, any and all rights of Seller against a third party thereto. Seller will promptly pay to Buyer when received all monies received by Seller under any Purchased Asset or any claim or right or any benefit arising thereunder. Notwithstanding the foregoing, the provisions of this Section 2.08 shall not apply to any Contracts that are subject to Section 7.05.

     Section 2.09. Certain Adjustments. If, during the period between the date of this Agreement and the Closing, the outstanding shares of capital stock of Buyer shall have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities as a result of any reorganization, reclassification, recapitalization, stock split or reverse stock split, combination, exchange or readjustment of shares, or any stock dividend thereon with a record date during such period or other similar change in capitalization, the Aggregate Equity Consideration shall be appropriately and proportionately adjusted.

     Section 2.10. Post-Closing Cash Cap. (a) Notwithstanding anything to the contrary in this Agreement, unless Seller exercises an Alternative Transaction Structure Election pursuant to Section 7.11, to the extent that any cash payment otherwise required to be made by Buyer to Seller under this Agreement after the Closing would result in the Aggregate Post-Closing Buyer Cash Payments being in excess of the Post-Closing Cash Cap (any such excess, an “Excess Post-Closing Buyer Cash Payment”), then:

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     (i) Buyer shall not be required under this Agreement to make such Excess Post-Closing Buyer Cash Payment to Seller, and

     (ii) in lieu thereof, Buyer shall (x) pay to Seller in cash an amount equal to 60% of such Excess Post-Closing Buyer Cash Payment, and (y) deliver to Seller a number of shares of Buyer Stock equal to the quotient (rounded down to the next whole share) of (A) 40% of such Excess Post-Closing Buyer Cash Payment over (B) the Buyer COI Price; provided that to the extent delivery of the Buyer Stock pursuant to this clause (ii) would cause Seller’s beneficial ownership (as defined in Rule 13d of the Exchange Act) of Buyer Stock to exceed the Common Stock Cap, Buyer shall deliver to Seller (x) the maximum number of shares of Buyer Stock that can be owned by Seller without Sellers’ and its Affiliates’ collective ownership exceeding the Common Stock Cap plus (y) a number of shares of Equivalent Buyer Preferred Stock that is convertible into the number of shares of Buyer Stock that would have been delivered absent this proviso less the number of shares of Buyer Stock referred to in clause (x).

     (b) For purposes of this Agreement,

     (i) “Aggregate Post-Closing Buyer Cash Payments” means, at any time, the aggregate amount of cash payments previously made or to be made at such time by Buyer to Seller after the Closing.

     (ii) “Buyer COI Price” means $22.75.

     (iii) “Merger Consideration Percentage” means 66.755%.

     (iv) “Post-Closing Cash Cap” means the value determined for X, expressed in dollars, where:

X	=	((A * B) / .40) – (A * B) – C
and
A	=	the Buyer COI Price;
B	=	the excess of (i) the product of the Aggregate Equity Consideration, prior to any adjustment to such number pursuant to this Agreement, and the Merger Consideration Percentage, over (ii) the amount of any reduction (expressed as a number of shares) in the Aggregate Equity Consideration pursuant to Section 2.05 or 2.06(b); and

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C = the product of (i) the Aggregate Cash Consideration, prior to any adjustment to such amount pursuant to this Agreement, and (ii) the Merger Consideration Percentage.

ARTICLE 3
Representations and Warranties of Seller

     Subject to Section 13.11, except as set forth in the Seller Disclosure Schedule, Seller represents and warrants to Buyer as of the date of this Agreement and as of the Closing Date as follows:

     Section 3.01. Organization and Qualification. Seller and each of its Subsidiaries that owns Purchased Assets is a legal entity duly organized or incorporated, validly existing and, to the extent such concept is relevant in the applicable jurisdiction, in good standing under the Laws of its jurisdiction of organization or incorporation. To the extent relating to the Van Kampen Business or the ability of Seller to enter into or consummate the transactions contemplated hereby: (i) Seller and each of its Subsidiaries that owns Purchased Assets has the requisite corporate or other similar power and authority to own or lease all of its properties and assets and to carry on its business as conducted as of the date of this Agreement and to own, lease and operate all of its properties and assets, in all material respects as conducted, owned, leased or operated as of the date of this Agreement; and (ii) Seller and each of its Subsidiaries that owns Purchased Assets is duly qualified to do business in each jurisdiction in which the nature of its business or the character or location of the properties and assets owned, leased or operated by it makes such qualification necessary other than any failure to be so qualified that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Seller has made available to Buyer prior to the date of this Agreement complete and correct copies of the Organizational Documents of Seller and each of its Subsidiaries that owns Purchased Assets as in effect as of the date of this Agreement.

     Section 3.02. Ownership. Seller or one of its Subsidiaries (including, in the case of a portion of the Van Kampen Seed Capital, one or more of the Transferred Entities) is, and, subject to Section 7.05, as of the Closing Date will be, the legal and beneficial owner of all of the issued and outstanding equity interests in the Transferred Entities, the Van Kampen Seed Capital and, subject to Section 7.05, the Purchased Assets and at the Closing will deliver to Buyer good and valid title to the Transferred Entities, the Van Kampen Seed Capital and the Purchased Assets, free and clear of any Encumbrances, other than (in the case of the Purchased Assets only) Permitted Encumbrances. Van Kampen Parent owns, directly or indirectly, all of the outstanding ownership interests in each of its

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Subsidiaries and all such ownership interests are owned free and clear of any Encumbrance. As of the date hereof, the number of shares of Buyer Common Stock that Seller beneficially owns (as defined in Rule 13d of the Exchange Act) is set forth in Section 3.02 of the Seller Disclosure Schedule (as determined by Seller based on its reporting and compliance policies and procedures in respect thereof) and discussed with Buyer.

     Section 3.03. Corporate Authority. (a) Seller has (or any of its Affiliates who may be a party to any Ancillary Agreement has) full corporate power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it (or any such Affiliate) is or will be a party and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder. The execution, delivery and performance by Seller (or any such Affiliate) of this Agreement and each of the Ancillary Agreements to which it is or will be a party, and each of the transactions contemplated hereunder (including the Merger) and thereunder, have been duly and validly authorized and no additional corporate or shareholder authorization or consent is required in connection with the execution, delivery and performance by Seller (or any such Affiliate) of this Agreement and each of the Ancillary Agreements to which it (or any such Affiliate) is or will be a party or any of the transactions contemplated hereunder or thereunder.

     (b) The board of directors of Van Kampen Parent has approved and declared advisable this Agreement, the Agreement and Plan of Merger and the transactions contemplated hereby (including the Merger) and resolved to recommend approval and adoption of this Agreement and the Agreement and Plan of Merger and (including the Merger) by the sole stockholder of Van Kampen Parent. The sole stockholder of Van Kampen Parent has approved and adopted this Agreement and the Agreement and Plan of Merger (including the Merger). No other corporate proceedings on the part of Van Kampen Parent or its sole stockholder are necessary to approve this Agreement, the Agreement and Plan of Merger or to consummate the Merger or other transactions contemplated hereby.

     Section 3.04. Binding Effect. Assuming the due authorization, execution and delivery of this Agreement and the Ancillary Agreements by Buyer (or, in the case of the Ancillary Agreements, Buyer or an Affiliate of Buyer), this Agreement constitutes, and each Ancillary Agreement when executed and delivered will constitute, a valid and legally binding obligation of Seller (or, in the case of the Ancillary Agreements, of Seller or an Affiliate of Seller) enforceable against Seller or such Affiliate in accordance with its terms, subject (in the case of enforceability) to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

     Section 3.05. Governmental Consents and Approvals. (a) Other than in connection with (i) the HSR Act or any other Antitrust Laws, (ii) any applicable banking, securities or other financial services Laws of any banking commission or

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any securities or other financial services regulator, (iii) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State or (iv) such other Law, in each case of (i) through (iv) above, that is set forth on Section 3.05(a) of the Seller Disclosure Schedule (the matters covered under clauses (i) through (iv) above, collectively, the “Seller Required Approvals”), Seller and its Affiliates are not required to obtain any authorization, waiver, consent or approval of, make any filing or registration with, or give any notice to, any Government Entity or to obtain any Permit in connection with the execution, delivery and performance by Seller of this Agreement or the execution, delivery and performance by Seller or its Affiliates of each of the Ancillary Agreements to which Seller or any of its Affiliates is or will be a party or the consummation by Seller or its Affiliates of any of the transactions contemplated hereunder (including the Merger) or thereunder, other than any authorization, waiver, consent, approval, filing, registration, notice or Permit, the failure of which to obtain, make or give would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. As of the date hereof, Seller is not aware of any reason why any Seller Required Approvals will not be received in order to permit the consummation of the transactions contemplated hereby.

     (b) Other than the Seller Required Approvals or as set forth on Section 3.05(b) of the Seller Disclosure Schedule (the “Transferred Entities Required Approvals”), no Transferred Entity is required to obtain any authorization, waiver, consent or approval of, or make any filing or registration with, or give any notice to, any Government Entity or to obtain any Permit in connection with the execution, delivery and performance by Seller of this Agreement, the execution, delivery and performance by Seller or its Affiliates of each of the Ancillary Agreements to which Seller or any of its Affiliates is or will be a party or the consummation by Seller or its Affiliates of any of the transactions contemplated by this Agreement (including the Merger) or the Ancillary Agreements, other than any authorization, waiver, consent, approval, filing, registration, notice or Permit the failure of which to obtain, make or give would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. As of the date hereof, Seller is not aware of any reason why any Transferred Entities Required Approvals will not be received in order to permit the consummation of the transactions contemplated hereby.

     Section 3.06. Non-Contravention. The execution, delivery and performance by Seller of this Agreement and by Seller and its Affiliates of each of the Ancillary Agreements to which Seller or any of its Affiliates is or will be a party, and the consummation by Seller and its Affiliates of the transactions contemplated hereunder and thereunder, do not and will not (i) conflict with or violate any provision of the Organizational Documents of Seller, any Subsidiary of Seller that owns Purchased Assets, any Affiliate that is a party to an Ancillary Agreement, any Transferred Entity, or the Funds, (ii) assuming the receipt of all consents, approvals, waivers and authorizations and the making of the notices and filings referred to in Section 3.05 or Section 7.05, conflict with, or result in the

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breach of, or constitute a default under, or result in the termination, Encumbrance, cancellation, modification or acceleration of any right or obligation of Seller, any Subsidiary of Seller that owns Purchased Assets, any Affiliate that is a party to an Ancillary Agreement, any Transferred Entity, any Fund or the Van Kampen Business under, or give rise to any payment conditioned, in whole or in part, on a change of control of a Transferred Entity or Fund or approval or consummation of the transactions contemplated hereby, or result in a loss of any benefit to which Seller, any Subsidiary of Seller that owns Purchased Assets, any Affiliate that is a party to an Ancillary Agreement, any Transferred Entity, any Fund or the Van Kampen Business is entitled, with or without the giving of notice, the lapse of time or both, under any Contract or other agreement or instrument binding upon Seller, any Subsidiary of Seller that owns Purchased Assets, any Affiliate that is a party to an Ancillary Agreement, any Transferred Entity, the Funds, the Van Kampen Business or to which the property of Seller, any Subsidiary of Seller that owns Purchased Assets, any Affiliate that is a party to an Ancillary Agreement, any Transferred Entity, the Funds or the Van Kampen Business is subject or (iii) assuming the receipt of all consents, approvals, waivers and authorizations and the making of notices and filings (A) referred to in Section 3.05 or Section 7.05 or (B) required to be received or made by Buyer or any of its Affiliates, violate or result in a breach of or constitute a default under any Law to which Seller, any Subsidiary of Seller that owns Purchased Assets, any Affiliate that is a party to an Ancillary Agreement, any Transferred Entity, the Funds or the Van Kampen Business is subject or under any Permit of Seller or its Subsidiaries that is related to the Van Kampen Business, other than, in the case of clauses (ii) and (iii), any conflict, breach, default, termination, Encumbrance, cancellation, modification, acceleration or loss that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect (excluding, for this purpose only, clause (H) of the definition of Material Adverse Effect).

     Section 3.07. Investment Purpose. Seller is acquiring the Aggregate Equity Consideration for its own account, solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act or state securities or “blue sky” Law, or with any present intention of distributing or selling such Aggregate Equity Consideration in violation of any such Law. Seller has requested, received, reviewed and considered all information that Seller deems relevant in making an informed decision to invest in the Buyer Stock or the Equivalent Buyer Preferred Stock, as the case may be, and has had an opportunity to discuss Buyer’s business, management and financial affairs with its management and also had an opportunity to ask questions of officers of Buyer that were answered to Seller’s satisfaction; provided that such inquires do not impair the rights of Seller to rely on the representations and warranties of Buyer as set forth in Article 4. Seller understands that Buyer is relying on the statements contained herein to establish an exemption from registration under U.S. federal and state securities Laws. Subject to provisions of Section 6.06, Seller acknowledges that the shares constituting the Aggregate Equity Consideration are not registered under the

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Securities Act or any other applicable Law and that such shares may not be transferred, sold or otherwise disposed of except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and pursuant to Laws and regulations of other jurisdictions as applicable.

     Section 3.08. Legal Proceedings. (a) As of the date of this Agreement, there is no Legal Proceeding pending against, or to the Knowledge of Seller, threatened against or affecting Seller, any Subsidiary of Seller (including the Transferred Entities) or any Fund that challenges the validity or enforceability of this Agreement or seeks to enjoin or prohibit consummation of the transactions contemplated by this Agreement.

     (b) Section 3.08(b) of the Seller Disclosure Schedule contains a complete and correct list, as of the date hereof, of all material pending and, to the Knowledge of Seller, material threatened Legal Proceedings concerning the Van Kampen Business. There are no Legal Proceedings pending against or, to the Knowledge of Seller, threatened against or affecting any Transferred Entity or the Van Kampen Business, except as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (c) There is no material injunction, order, award, judgment, settlement, decree or regulatory restriction imposed upon or entered into by the Transferred Entities or Seller or its Affiliates relating to or impacting the Van Kampen Business (or that, upon consummation of the transactions contemplated by this Agreement, would apply to Buyer or any of its Subsidiaries).

     Section 3.09. Organization and Qualification. Each Transferred Entity is, as of the date of this Agreement, and each Transferred Entity will be, as of the Closing, a legal entity duly organized or incorporated, validly existing and, to the extent such concept is relevant in the applicable jurisdiction, in good standing under the Laws of its jurisdiction of organization. Each Transferred Entity has, as of the date of this Agreement, and each Transferred Entity will have, as of the Closing, all requisite corporate or other similar power and authority to own, lease and operate all of its properties and assets and to carry on its businesses in all material respects as conducted, owned, leased or operated as of the date of this Agreement. Each Transferred Entity is, as of the date of this Agreement, and each Transferred Entity will be, as of the Closing, duly qualified to do business in each jurisdiction where the ownership or operation of its properties and assets or the conduct of its businesses requires such Transferred Entity to be so qualified, except for any failure to be so qualified that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Seller has made available to Buyer, prior to the date of this Agreement, complete and correct copies of the Organizational Documents of each of the Transferred Entities, in each case, as in effect on the date of this Agreement.

     Section 3.10. Capitalization. (a) Section 3.10(a) of the Seller Disclosure Schedule sets forth, for each Transferred Entity, (A) the name and jurisdiction of

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organization of such Transferred Entity, (B) the number of shares of authorized and outstanding capital stock or other equity interests of such Transferred Entity and the names of the holders thereof and (C) the number of shares of authorized and outstanding capital stock or other equity interests of such Transferred Entity that are held in treasury by such Transferred Entity.

     (b) All of the outstanding shares of capital stock and other equity interests of the Transferred Entities have been duly authorized and are validly issued, fully paid and non-assessable.

     (c) There are no other outstanding securities, preemptive or other rights, rights of first refusal, options, warrants, calls, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, plans, “tag along” or “drag along” rights, agreements, arrangements, undertakings or commitments (collectively, “Equity Rights”) (i) under which any Transferred Entity is or may become obligated to issue, deliver, redeem, purchase or sell, or cause to be issued, delivered, redeemed, purchased or sold, or in any way dispose of, any shares of the capital stock or other equity interests, or any securities or obligations that are exercisable or exchangeable for, or convertible into, any shares of the capital stock or other equity interests, of such Transferred Entity, and no securities or obligations evidencing such rights are authorized, issued or outstanding, (ii) giving any Person a right to subscribe for or acquire any equity interest in any Transferred Entity or (iii) obligating any of the Transferred Entities to issue, grant, adopt or enter into any such Equity Right in respect of any Transferred Entity. None of the Transferred Entities has any (x) outstanding Indebtedness that could convey to any Person the right to vote, or that is convertible into or exercisable for Transferred Equity Interests or equity of any Transferred Entity or (y) rights that entitle or convey to any Person the right to vote with the holders of the equity interests of the Transferred Entities on any matter. The outstanding capital stock and other equity interests of the Transferred Entities are not subject to any Contract restricting or otherwise relating to the voting, dividend rights or disposition of such capital stock or other equity interests. There are no outstanding or authorized phantom stock, profit participation or similar rights providing economic benefits based, directly or indirectly, on the value or price of the capital stock or other equity interests of the Transferred Entities.

     Section 3.11. Financial Information. (a) The unaudited interim combined balance sheet (the “Balance Sheet”) as of June 30, 2009 (the “Balance Sheet Date”) of the Van Kampen Business (for the avoidance of doubt, including the Purchased Assets and Assumed Liabilities), (i) has been based on financial records of the Seller and its Subsidiaries that are in accordance with GAAP and (ii) fairly presents, on such basis, in all material respects the combined financial position of the Transferred Entities, together with the Purchased Assets, as of the date thereof (subject to normal year-end audit adjustments, none of which would be expected to be material). The unaudited interim combined statement of income (the “Income Statement”) for the six months ended June 30, 2009 of the

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Transferred Entities, together with the Purchased Assets, (i) has been based on financial records of the Seller and its Subsidiaries that are in accordance with GAAP and (ii) fairly presents, on such basis, in all material respects the combined results of operations of the Transferred Entities, together with the Purchased Assets, for such period (subject to normal year-end audit adjustments, none of which is expected to be material). It is understood that (i) expenses on the income statement referred to in the preceding sentence fully comprise the direct and indirect expenses incurred to support the Van Kampen Business, (ii) such direct expenses include investment team and distribution compensation reported on the basis of Economic Compensation, occupancy, equipment, information processing and marketing fees and (iii) such expenses include support services costs (Operations, IT, HR, Finance, Internal Audit and Legal/Compliance), and reflect both direct expenses and an allocation of the Van Kampen Business’ share of the costs of services and functions that support Seller’s global investment management business (with any compensation costs also reported on the basis of Economic Compensation). Complete and correct copies of the unaudited financial statements described in the first two sentences of this Section 3.11(a) (the “Financial Statements”) are set forth on Section 3.11(a) of the Seller Disclosure Schedule.

     (b) The Balance Sheet does not reflect any asset, other than deferred tax assets attributable to differences between tax and book accounting treatment, that will not be transferred to Buyer either as a Purchased Asset or pursuant to the Merger after giving effect to the transactions contemplated hereunder (excluding routine dispositions of assets in the ordinary course of business consistent with past practice and permitted by Section 5.01(b)) and the Income Statement reflects the results of the operations of the Van Kampen Business as conducted as part of Seller. The Financial Statements reflect all costs that historically have been incurred in connection with the operation of the Van Kampen Business.

     (c) Seller and its Subsidiaries (including the Transferred Entities) maintain in all material respects internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Transferred Entities, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Transferred Entities are being made only in accordance with authorizations of management and directors of the Transferred Entities and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Transferred Entities that could have a material effect on the financial statements.

     (d) Section 3.11(d) of the Seller Disclosure Schedule correctly sets forth all Indebtedness of the Van Kampen Business to third parties (which, for the

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avoidance of doubt, does not include Seller and its Affiliates) as of the date set forth on such Schedule, and for each item of such Indebtedness set forth thereon, identifies the debtor, the principal amount as of the date of this Agreement, the creditor, the maturity date and the collateral, if any, securing the Indebtedness.

     Section 3.12. Absence of Undisclosed Liabilities. There are no liabilities or obligations of the Van Kampen Business (whether known, absolute, accrued, contingent or otherwise and whether due or to become due), except for (a) liabilities or obligations to the extent reflected or reserved against on the Financial Statements, (b) liabilities or obligations that were incurred by the Van Kampen Business as a result of this Agreement or any Ancillary Agreement, (c) liabilities or obligations incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date or (d) other undisclosed liabilities, which have not had, and would not reasonably be expected to have, individually or in the aggregate, a Van Kampen Material Adverse Effect.

     Section 3.13. Taxes. (a) All material Tax Returns with respect to the Transferred Entities required to be filed have been duly and timely filed with the appropriate Government Entity, and all such Tax Returns are true, correct and complete in all material respects, and the Transferred Entities have timely paid all material Taxes due with respect to the periods covered by such Tax Returns. All other material Taxes of the Transferred Entities have been paid, or an adequate provision has been made therefor on the appropriate financial statements in accordance with GAAP, IFRS, or other relevant applicable accounting principles.

     (b) Each of the Transferred Entities has withheld from its employees, independent contractors or Affiliates, and other third parties all material amounts required to be withheld with respect to any amounts paid or benefits furnished to any such Person and timely paid such amounts withheld to the appropriate Government Entity (or other authority) or set aside in an account for such purpose such amounts for all periods, in each case, in material compliance with all Tax withholding provisions under applicable Laws.

     (c) There are no material audits, examinations, investigations or other proceedings pending or threatened in writing in respect of Taxes of or with respect to any of the Transferred Entities, no material issues that have been raised by a Government Entity in connection with any examination of the Tax Returns referred to in Section 3.13 are currently pending, and all material deficiencies asserted or material assessments made, if any, as a result of such examinations have been paid in full, or an adequate provision has been made therefor on the appropriate financial statements in accordance with GAAP, IFRS, or other relevant applicable accounting principles.

     (d) None of the Transferred Entities has any material liability for the Taxes of any Person under Treas. Reg. Section 1.1502-6 (or any similar provision of U.S. state or local or foreign Tax Law), or as a transferee or successor, other than with respect to (i) the consolidated, combined or unitary group of which Van

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Kampen Parent was the common parent or (ii) the consolidated, combined or unitary group of which Seller is the common parent.

     (e) None of the Transferred Entities has any material liability for the Taxes of any Person by Contract.

     (f) There are no Encumbrances for Taxes, other than Permitted Encumbrances, upon any of the assets of any Transferred Entity or any Purchased Assets. The Seller and each other entity transferring an interest in United States real property hereunder is not a foreign person within the meaning of Section 1445(b)(2) of the Code.

     (g) There is no (i) waiver of any statute of limitations in respect of material income Taxes, (ii) agreement for any extension of time with respect to a material income Tax assessment or deficiency or (iii) power of attorney has been granted with respect to material Taxes, in each case, relating to any Transferred Entity or the assets thereof. None of the Transferred Entities is a party to, is bound by, or has any obligation or liability under, any material income Tax allocation or sharing agreement or arrangement.

     (h) None of the Transferred Entities will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period ending after the Closing as a result of any (i) request for a ruling, advance pricing agreement or “closing agreement” as defined in Section 7121 of the Code (or any corresponding or similar provision of U.S. state or local or foreign Tax Law); (ii) material installment sale or open transaction disposition made on or before the Closing Date; or (iii) adjustment pursuant to Section 481(a) of the Code or any similar provision of U.S. state or local Tax Law.

     (i) None of the Transferred Entities has constituted either a “distributing corporation” or “controlled corporation” (within the meaning of Section 355(e)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute a “plan” or “series of related transactions” (within the meaning of Section 355 of the Code) with the transactions contemplated by this Agreement.

     (j) No Transferred Entity has participated in any “listed transaction” within the meaning of Treas. Reg. Section 1.6011-4(c)(3)(i)(A).

     (k) Neither Seller nor any of its Affiliates has taken or agreed to take any action, or is aware of any fact or circumstance, that could reasonably be expected to prevent the Merger from qualifying as a 368 Reorganization. This Section 3.13(k) shall not be applicable if Seller has made an Alternative Transaction Structure Election pursuant to Section 7.11.

     (l) With respect to the Purchased Assets, (i) all Taxes which will have been required to be paid on or prior to the date hereof, the non-payment of which

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would result in a Lien on any Purchased Asset have been paid, and (ii) Seller has established or caused to be established, in accordance with GAAP applied on a basis consistent with that of preceding periods, adequate reserves for the payment of, and will timely pay, all Taxes which arise from or with respect to the Purchased Assets or the operation of the Van Kampen Business and are incurred in or attributable to the Pre-Closing Tax Period, the non-payment of which would result in a Lien on any Purchased Asset.

     Section 3.14 . Employee Benefits.

     (a) Each material Benefit and Compensation Arrangement is listed on Section 3.14(a)(i) of the Seller Disclosure Schedule. Each Assumed Benefit and Compensation Arrangement and each material Foreign Benefit Plan is separately identified on Section 3.14(a)(ii) and Section 3.14(a)(iii), respectively, of the Seller Disclosure Schedule. Each Assumed Benefit and Compensation Arrangement is maintained exclusively for the benefit of Van Kampen Business Employees or former employees of a Transferred Entity. Seller has made available to Buyer (i) a copy of each Assumed Benefit and Compensation Arrangement and a copy or summary of each material Benefit and Compensation Arrangement that is not an Assumed Benefit and Compensation Arrangement, and (ii) with respect to each Assumed Benefit and Compensation Arrangement (where applicable), (A) the most recent summary plan description, (B) the most recent determination letter received from the Internal Revenue Service, (C) the most recent Form 5500 Annual Report, (D) the most recent audited financial statement and actuarial valuation report and (E) the version effective as of the date of this Agreement of all related agreements (including trust agreements) and insurance Contracts and other Contracts which implement such Assumed Benefit and Compensation Arrangement.

     (b) Except as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect, (i) each Assumed Benefit and Compensation Arrangement is and has been operated in compliance with all applicable Laws of the relevant jurisdiction (including any local regulatory or Tax approval requirements) and, to the extent relevant, the governing provisions of such Assumed Benefit and Compensation Arrangement and (ii) no Legal Proceeding is pending or, to the Knowledge of Seller, threatened with respect to any Assumed Benefit and Compensation Arrangement.

     (c) Each Assumed Benefit and Compensation Arrangement that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service stating that the plan is so qualified and to the Knowledge of Seller no event exists that is reasonably likely to result in the loss of such qualification.

     (d) As of the date of this Agreement, none of Seller nor any of the Transferred Entities nor any of their respective ERISA Affiliates has (i) failed to make any contribution or payment to any U.S. Benefit Plan that is (A) an

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“employee pension benefit plan,” within the meaning of Section 3(2) of ERISA, that is subject to Title IV of ERISA or Section 412 of the Code, (B) a Multiemployer Plan or (C) a Multiple Employer Plan, in each case, which failure has resulted or could reasonably be expected to result in the imposition of any liability on the Transferred Entities or Purchaser or its Affiliates on or after the Closing Date, (ii) incurred any liability under Title IV of ERISA (other than a liability to the Pension Benefit Guaranty Corporation for premiums under Section 4007 of ERISA), which liability is or could reasonably be expected to become a liability of the Transferred Entities or Purchaser or its Affiliates on or after the Closing Date or (iii) failed to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, which liability is or could reasonably be expected to become a liability of the Transferred Entities or Purchaser or its Affiliates on or after the Closing Date.

     (e) Each Assumed Benefit and Compensation Arrangement that is a “nonqualified deferred compensation plan” (as defined for purposes of Section 409A(d)(1) of the Code) that is subject to Section 409A of the Code has since (i) January 1, 2005, been maintained and operated in good faith compliance with Section 409A of the Code and Notice 2005-1, (ii) October 3, 2004, not been “materially modified” (within the meaning of Notice 2005-1) and (ii) January 1, 2009, been in documentary and operational compliance with Section 409A of the Code.

     (f) With respect to each Assumed Benefit and Compensation Arrangement: (i) all material contributions, reserves or premium payments required to be made with respect to any Van Kampen Business Employee or former employee of the Van Kampen Business have been made or have been accrued or otherwise adequately reserved for in the Financial Statements or will otherwise be timely made prior to the Closing Date and reflected on the Closing Balance Sheet; and (ii) there are no unfunded liabilities with respect to any such arrangements (including for termination indemnities) that are not reflected in the Financial Statements, other than any unfunded liabilities that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Van Kampen Material Adverse Effect.

     (g) There has been no amendment to, or announcement by Seller or any of its Affiliates in respect of the Van Kampen Business Employees relating to, or change in employee participation or coverage under, any Assumed Benefit and Compensation Arrangement that would either (i) increase the expense of maintaining such Assumed Benefit and Compensation Arrangement above the level of the expense incurred therefor for the year ended December 31, 2008 or (ii) increase the compensation and benefits that are or could become payable or provided to the Van Kampen Business Employees above the levels of compensation and benefits provided to them for the year ended December 31, 2008. No condition exists that would prevent any Assumed Benefit and Compensation Arrangement from being merged, amended or terminated in accordance with its terms and applicable Law.

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     (h) Neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement (whether alone or in connection with other events) will (i) entitle any Van Kampen Business Employees to severance pay or benefits or any increase in severance pay or benefits or result in an increase in the applicable notice period upon any termination of employment on or after the date of this Agreement or (ii) accelerate the time of any payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or result in any other obligation pursuant to any of the Assumed Benefit and Compensation Arrangements.

     (i) No U.S. Benefit Plan that is an Assumed Benefit and Compensation Arrangement provides, or reflects or represents any liability to provide, retiree health or life benefits (including, without limitation, death or medical benefits), whether or not insured, with respect to any Van Kampen Business Employee or former employee of the Van Kampen Business, or any spouse or dependent of any such Van Kampen Business Employee or former employee of the Van Kampen Business, beyond such employee’s retirement or other termination of employment with Seller and its Subsidiaries other than (i) coverage mandated by Part 6 of Title I of ERISA or Section 4980B of the Code or any similar state or local Law or any similar continuation coverage provided with respect to such employee’s domestic partner, (ii) retirement or death benefits under any plan intended to be qualified under Section 401(a) of the Code or (iii) disability benefits that have been fully provided for by insurance under a Benefit and Compensation Arrangement that constitutes an “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA.

     (j) Seller has provided Buyer the following information with respect to each Van Kampen Business Employee: his or her current rate of annual base salary or current wages; 2009 bonus guarantee, if applicable; job title; employment status (full- or part-time, absent or on leave); work location; credited service date; fiscal year 2008 bonus and the makeup of such bonus (i.e., the portion that was granted in cash and the portion that was granted in long-term incentive compensation); the aggregate number of equity-based compensation awards that he or she holds as of the most recent practicable date; and date of hire (the “Van Kampen Business Employee Information List”).

     (k) Each Seller Equity Award held by a Transferred Employee that is outstanding under any Seller Equity Plan on such Transferred Employee’s Transfer Date will, pursuant to the terms of any such Seller Equity Plan, if unvested, become fully vested and, to the extent applicable, exercisable, on such Transfer Date.

     Section 3.15. Permits. The Transferred Entities hold all Permits required to own or lease their properties and assets and to conduct the Van Kampen Business conducted by them under and pursuant to all applicable Laws, in each case, other than any failure to hold any Permit that would not, individually or in

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the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. All such Permits are valid and in full force and effect, except for those the failure of which to be valid or to be in full force and effect would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. No violations with respect to such Permits have occurred and no Legal Proceedings are pending or, to the Knowledge of Seller, threatened to suspend, cancel, modify, revoke or materially limit any such Permits, except, in each case, as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Each Van Kampen Business Employee who is required to be registered or licensed as a registered representative, investment adviser representative, sales person or an equivalent person with any Government Entity is duly registered as such and such registration is in full force and effect, except for such failures to be so registered or for such registration to remain in full force and effective that, individually or in the aggregate, would not reasonably be expected to have a Van Kampen Material Adverse Effect.

     Section 3.16. Intellectual Property. (a) Section 3.16(a) of the Seller Disclosure Schedule lists all material Contracts (excluding licenses for commercial off the shelf computer software) pursuant to which (i) with respect to the Van Kampen Business only, the Seller or any of its Subsidiaries and/or (ii) any of the Transferred Entities, in each case obtains or grants the right to use any Intellectual Property Right.

     (b) Section 3.16(b) of the Seller’s Disclosure Schedules includes a complete and accurate list of all United States, foreign and multinational: (i) Patents and Patent applications; (ii) registered Trademarks and Trademark applications; (iii) Internet domain names and (iv)Copyright registrations and applications, in each case, that are material to the conduct of the Van Kampen Business and are owned by one or more of the Transferred Entities or included in the Purchased Assets.

     (c) The material Owned Seller Intellectual Property Rights are exclusively owned by the Seller, its Subsidiaries, and/or the Transferred Entities free and clear of all Encumbrances, other than Permitted Encumbrances and neither Seller nor any of its Subsidiaries (including the Transferred Entities) has granted any exclusive license of or right to use any such Owned Seller Intellectual Property Rights to any other party except for any such license of or right to use which does not materially affect the operation of the Van Kampen Business.

     (d) Except as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect:

     (i) To the Knowledge of Seller, the conduct of the Van Kampen Business as currently conducted does not infringe or misappropriate the Intellectual Property Rights of any other Person. Neither Seller nor any of its Subsidiaries (including the Transferred

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Entities) has within the past two years received any written notice or written claim asserting that the conduct of the Van Kampen Business or the Transferred Entities infringes or misappropriates the Intellectual Property Rights of any other Person. To the Knowledge of the Seller, none of the Owned Seller Intellectual Property Rights is being infringed or misappropriated by any other Person. None of the Owned Seller Intellectual Property Rights has been adjudged invalid or unenforceable in whole or part, and, to the Knowledge of the Seller, all such Intellectual Property Rights are valid and enforceable.

     (e) Seller and its Subsidiaries, with respect to the Van Kampen Business, and the Transferred Entities have taken commercially reasonable steps to protect their rights in the material Trade Secrets owned by any of them, excluding any information that any such Person, in the exercise of its business judgment, determined was of insufficient value to protect as a Trade Secret

     (f) Except as otherwise set forth in this Agreement and subject to the terms and conditions of the IP Matters Agreement, immediately following the Closing, Buyer (including through the Transferred Entities) will own or have the right to use pursuant to written Contracts all Trademarks used in the conduct of the Van Kampen Business as of the date of this Agreement.

     Section 3.17. Labor. None of the Transferred Entities is a party to or bound by any labor agreement, union contract or collective bargaining agreement, and there are no labor unions or other organizations representing any Van Kampen Business Employee, works councils or employee representative bodies within the Transferred Entities or affecting the Van Kampen Business Employees. Except as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect, each Transferred Entity and Seller and any other Affiliate of Seller (in respect of the employment of any of the Van Kampen Business Employees) which employs any Van Kampen Business Employee is or has been in compliance with all applicable Laws in respect of employment and employment practices including all Laws in respect of terms and conditions of employment, health and safety, employee independent contractor classifications, wages and hours of work, child labor, immigration, employment discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers’ compensation, labor relations, employee leave issues, unemployment insurance and the collection and payment of withholding or social security Taxes and any similar Tax. Since January 1, 2008, there has not been, and there is not now pending or, to the Knowledge of Seller, threatened (a) any material strike, lockout, slowdown, picketing or work stoppage with respect to the Van Kampen Business Employees or (b) any unfair labor practice charge against the Van Kampen Business, in the case of (b), that have had or resulted in or would, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. None of the Van Kampen Business Employees are employed in jurisdictions other than the United States, United Kingdom or Japan.

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     Section 3.18. Contracts. (a) Section 3.18(a) of the Seller Disclosure Schedule contains a complete and correct list of all of the following Contracts in effect as of the date of this Agreement pursuant to which the Van Kampen Business is conducted or otherwise primarily related to the Van Kampen Business (other than any such Contracts of Seller or any of its Affiliates (other than any Transferred Entity) relating to the Van Kampen Business or any Fund or pursuant to which the Van Kampen Business or any Fund receives any benefit where such Contract is not an Assumed Liability) (the “Specified Contracts”):

     (i) any Contract for the placement, distribution or sale of shares, units or other ownership interests of a Fund that is reasonably expected to provide for payments to, or provide for payments from, the Van Kampen Business in excess of $300,000 in 2009 or 2010, other than, in each case, Contracts in respect of the Purchased Assets where such Contract is not an Assumed Liability;

     (ii) any administration agreement or any other Contract for the provision of administrative services that is reasonably expected to provide for payments to, or provide for payments from, the Van Kampen Business in 2009 or 2010 in excess of $300,000 and by its terms is not terminable without penalty upon notice of 60 days or less, other than, in each case, Contracts in respect of the Purchased Assets where such Contract is not an Assumed Liability;

     (iii) any other Contract, other than a Benefit and Compensation Arrangement and other than Contracts in respect of the Purchased Assets where such Contract is not an Assumed Liability, that is reasonably expected to provide for payments to, or provide for payments from, the Van Kampen Business in excess of $300,000 in 2009 or 2010;

     (iv) any Contract prohibiting or restricting in any material respect the ability of any Transferred Entity or the Van Kampen Business (or, following the Closing, Buyer and its Affiliates) to conduct its business, to engage in any business, to solicit any Person, to operate in any geographical area or to compete with any Person, that limits in any material respect the freedom of any Transferred Entity or the Van Kampen Business (or, following the Closing, Buyer and its Affiliates) to solicit or hire employees, or that requires any Transferred Entity or the Van Kampen Business (or, following the Closing, Buyer and its Affiliates) to deal exclusively with any Person;

     (v) any Contract for any joint venture, strategic alliance, partnership or similar arrangement involving a sharing of profits or expenses or payments based on revenues, profits or assets under management of any Affiliate of Seller or any Fund that is reasonably expected to account for revenue to the Van Kampen Business in 2009 or 2010 in excess of $300,000 on an annual (or annualized) basis or that

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would reasonably be expected to be material to the Van Kampen Business, taken as a whole;

     (vi) any Contract relating to any Indebtedness of the Van Kampen Business in an amount in excess of $500,000, other than: (A) any Indebtedness solely between Transferred Entities; or (B) any Indebtedness for which the Van Kampen Business will not be liable following the Closing;

     (vii) any Contract (including any so-called take-or-pay or keep well agreements) under which (A) any Person has directly or indirectly guaranteed or assumed Indebtedness, liabilities or obligations of the Van Kampen Business, or (B) the Van Kampen Business has directly or indirectly guaranteed or otherwise agreed to be responsible for Indebtedness or liabilities of any Person (other than any Transferred Entity);

     (viii) any Affiliate Arrangement that will be in effect after the Closing;

     (ix) any Contract, other than a Benefit and Compensation Arrangement, that provides for earn-outs or other similar contingent obligations;

     (x) any Contract relating to the acquisition or disposition of any assets or business (whether by merger, sale of stock, sale of assets or otherwise) with any outstanding obligations as of the date of this Agreement that are or could be material to the Van Kampen Business or containing any right of first refusal, right of first offer or similar right;

     (xi) any Contract which contains (A) a “clawback” or similar undertaking by the Van Kampen Business requiring the reimbursement or refund of any fees or (B) a “most favored nation” or similar provision; and

     (xii) any other Contract not made in the ordinary course of business consistent with past practice that is material to the Van Kampen Business.

     (b) Each (i) Specified Contract, (ii) Investment Advisory Arrangement which accounts for more than $150,000 of revenue to the Van Kampen Business on an annualized basis and (iii) Contract that contains key person provisions pertaining to Van Kampen Business Employees ((i), (ii) and (iii) being the “Significant Contracts”) is in full force and effect, and is valid and binding on the Transferred Entity that is a party thereto, and, to the Knowledge of Seller, on each other party thereto, except as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Seller has made available to Buyer prior to the date of this Agreement a complete and correct copy of each Significant Contract, including all material amendments,

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modifications and supplements thereto as in effect on the date of this Agreement. There exists no breach, violation or default of any Significant Contract on the part of any Transferred Entity or the Van Kampen Business which (with or without notice or lapse of time or both) would, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. No Transferred Entity or any of its Affiliates has received any written notice that it has breached, violated or defaulted under, or of an intention to terminate, not to renew or to challenge the validity or enforceability of any Significant Contract, except for any such breach, violation, default, termination, failure to renew or challenge of which would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (c) As of the date hereof, the Van Kampen Business has not entered into and is not bound by or subject to any of the following:

     (i) other than investment management and distribution Contracts entered into in the ordinary course of business consistent with past practice and standard indemnities contained in the Organizational Documents for the Transferred Entities in favor of current or former directors, officers and employees of the Van Kampen Business for operating in that capacity, any Contract providing for the indemnification of any Person with respect to liabilities that would reasonably be expected to result in aggregate indemnification payments by the Van Kampen Business in excess of $250,000;

     (ii) other than Contracts entered into in the ordinary course of business consistent with past practice, any type of Contract to cap fees, share fees or other payments, share expenses, waive fees or to reimburse or assume any or all fees or expenses thereunder that in any such case would be material to the Van Kampen Business, taken as a whole; or

     (iii) other than Contracts entered into in the ordinary course of business consistent with past practice, any Contract requiring the Van Kampen Business (A) to co-invest with any other Person, (B) to provide seed capital or similar investment or (C) to invest in any investment product.

     (d) Notwithstanding anything to the contrary contained in this Agreement, in no event shall Specified Contracts include any Investment Advisory Arrangement.

     (e) Section 3.18(e) of the Seller Disclosure Schedule sets forth a list of all Investment Advisory Arrangements that contain any “most favored nation” provisions.

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     (f) Section 3.18(f) of the Seller Disclosure Schedule sets forth a description of any “key person” provision pertaining to Van Kampen Business Employees in any Contract.

     Section 3.19. Absence of Changes. Since June 30, 2009, (a) no event or events have occurred or circumstance or circumstances have arisen or condition or conditions exist which has had or would reasonably be expected to have, individually or in the aggregate, a Van Kampen Material Adverse Effect and (b) prior to the date of this Agreement, except, in the case of clause (i), for any actions taken in connection with any transactions contemplated by this Agreement or any Ancillary Agreement or any efforts to sell the Van Kampen Business (i) the Van Kampen Business has been conducted in the ordinary course consistent with past practices of the Van Kampen Business and (ii) no Transferred Entity has, and neither Seller nor any of its Subsidiaries has in connection with the Van Kampen Business, taken any action that would be prohibited by Sections 5.01(b)(A), 5.01(b)(B), 5.01(b)(D), 5.01(b)(F), 5.01(b)(G), 5.01(b)(I), 5.01(b)(J), 5.01(b)(K), 5.01(b)(Q) or 5.01(b)(S) (but only with respect to actions prohibited by the subsections of 5.01(b) listed in this clause) had such terms been applicable during such period.

     Section 3.20. Compliance with Laws. (a) Except with respect to Taxes (which is specifically provided for in Section 3.13 and Article 8), in the past three years, the Van Kampen Business and the Funds have complied with, and are currently in compliance with, and currently operate and maintain their businesses in compliance with, all applicable Laws, except for such failures to comply as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. No unresolved investigation by any Government Entity with respect to the Van Kampen Business or the Funds is pending or, to the Knowledge of Seller, threatened, and no Government Entity has notified Seller or its Subsidiaries (including any Transferred Entity) in writing or, to the Knowledge of Seller, orally of its intention to conduct the same, except in any such case, such investigations as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. None of Seller or its Subsidiaries (with respect to the Van Kampen Business), the Transferred Entities or the Funds has received any written or, to the Knowledge of Seller, oral notice or communication (i)of any unresolved violation or exception by any Government Entity relating to any examination of the Van Kampen Business, (ii) threatening to revoke or condition the continuation of any Permit or (iii)restricting or disqualifying their activities (except for restrictions generally imposed by rule, regulation or administrative policy on similarly regulated Persons generally), except in any such case, as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (b) Seller has made available to Buyer prior to the date of this Agreement correct and complete copies of (i) each current Uniform Application for Investment Adviser Registration on Form ADV as on file with the SEC as of

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the date of this Agreement relating to any of the Transferred Entities and including Part II thereof (or a brochure in lieu thereof), reflecting all amendments thereto to the date of this Agreement (each, a “Form ADV”), and (ii) the currently effective version of any other similar applications, forms and filings that are material to the Van Kampen Business and required to be filed with a Government Entity by any Transferred Entity or by Seller or its Subsidiaries with respect to the Van Kampen Business under any applicable Law in connection with its business as an investment adviser. Such applications, forms and filings are in compliance in all material respects with the applicable requirements of the Investment Advisers Act and such other applicable Laws, and the Van Kampen Business is in compliance in all material respects with applicable requirements of the Investment Advisers Act and such other Laws applicable to the Van Kampen Business as an investment adviser.

     (c) The Van Kampen Business and the Transferred Entities are in compliance in all material respects with applicable requirements of the Commodity Exchange Act and the rules of the National Futures Association. Except as would not reasonably be expected to have, individually or in the aggregate, a Van Kampen Material Adverse Effect, (i) each Fund (or the Transferred Entity that is the operator thereof) that is exempt from registration as a commodity pool operator under the Commodity Exchange Act has filed an appropriate claim of exclusion or exemption to the extent required and (ii) each Fund (or such operator thereof) (x) has filed all required documentation with the National Futures Association and (y) conducts its business in compliance in all material respects with applicable requirements of the Commodity Exchange Act and the rules of the National Futures Association. Except as would not reasonably be expected to have, individually or in the aggregate, a Van Kampen Material Adverse Effect, each Transferred Entity that is a commodity trading advisor (“CTA”) as defined in the Commodity Exchange Act (i) has either filed an appropriate claim of exemption or has registered as a CTA with the National Futures Association and (ii) has filed all required documentation and conducts its business in compliance in all material respects with applicable requirements of the Commodity Exchange Act and the rules of the National Futures Association.

     (d) The Broker-Dealer is the only Transferred Entity registered as a broker or dealer under the Exchange Act. The Broker-Dealer is duly registered under the Exchange Act as a broker-dealer with the SEC, and is in compliance in all material respects with the applicable provisions of the Exchange Act, including the net capital requirements and customer protection requirements thereof. The Broker-Dealer is a member in good standing with FINRA and in compliance in all material respects with all applicable rules and regulations of FINRA. Except as would not reasonably be expected to have, individually or in the aggregate, a Van Kampen Material Adverse Effect, (i) the Broker-Dealer is duly registered as a broker-dealer under, and in compliance with, the Laws of all jurisdictions in which it is required to be so registered and (ii) each non-U.S. broker dealer that is a Transferred Entity has all Permits and memberships, and operates in compliance with all applicable Laws.

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     (e) Seller has made available to Buyer prior to the date of this Agreement correct and complete copies of the Broker-Dealer’s Uniform Application for Broker-Dealer Registration on Form BD filed since January 1, 2007 and through the date of this Agreement, reflecting all amendments thereto filed with the SEC prior to and as of the date of this Agreement (a “Form BD”). The Form BD of the Broker-Dealer is in compliance in all material respects with the applicable requirements of the Exchange Act.

     (f) None of the Broker-Dealer, any other Transferred Entity required to be registered as a broker-dealer or, to the Knowledge of Seller, any “associated person” of any such Person is subject to a “statutory disqualification” as such terms are defined in the Exchange Act, and there is no investigation pending or to the Knowledge of Seller threatened against any Transferred Entity, whether formal or informal, that is reasonably likely to result in such a statutory disqualification, except in either case for a “statutory disqualification” (or its equivalent under any applicable state or foreign Law), that would not reasonably be expected to be material to such broker-dealer.

     (g) No Seller, Subsidiary of Seller (including any Transferred Entity) or any of their respective “affiliated persons” (as that term is defined in the Investment Company Act as interpreted by the SEC or its equivalent under any applicable state or foreign Law) has any express or implied understanding or arrangement that would impose an unfair burden on any ’40 Act Fund as a result of the transactions contemplated by this Agreement or would in any way make unavailable to Seller the benefits of Section 15(f) of the Investment Company Act, or any similar safe harbors provided by any applicable state or foreign Law, with respect to such Fund.

     (h) The Broker-Dealer and any Transferred Entity that is an investment adviser or an entity required to be registered as a broker-dealer or an investment adviser with any Government Entity, has, where required by applicable Law, adopted written policies and procedures that, in each case, are reasonably designed to prevent, detect and correct any material violations under applicable securities Laws. In the past three years, there has been no non-compliance by such Persons with respect to the foregoing requirements or their own internal procedures and policies related to the foregoing, other than those that have been satisfactorily remedied or would not reasonably be expected to have a Van Kampen Material Adverse Effect.

     (i) In the past three years, Seller and its Subsidiaries and each of the Transferred Entities have filed all regulatory reports, schedules, forms, registrations and other documents that relate to the Van Kampen Business and the Transferred Entities, as applicable, together with any amendments required to be made with respect thereto, that they were required to file with (i) any applicable domestic or foreign Self-Regulatory Organization and (ii) all other applicable Government Entities, and have paid all fees and assessments due and payable in

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connection therewith, except in any such case, such matters that would not reasonably be expected to have a Van Kampen Material Adverse Effect.

     (j) All interest rate swaps, caps, floors, option agreements, futures and forward Contracts and other similar risk management arrangements and derivative financial instruments in effect as of the date of this Agreement or the Closing Date, other than arrangements and instruments of a de minimis value, entered into by the Van Kampen Business, or for the account of one or more of the Clients of the Van Kampen Business or any Transferred Entity, were entered into (i) to the extent entered into for the account of such a Client, in accordance with investment guidelines, prospectuses or offering memoranda applicable to such Client, (ii) in accordance in all material respects with all applicable Laws and (iii) with counterparties as directed by the applicable Client (where the Client so directs), in all cases except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Neither any Transferred Entity, the Van Kampen Business, nor, to the Knowledge of Seller, any other party thereto is in material breach of any of its obligations under any such Contract.

     (k) As of the date hereof, none of the Transferred Entities (or Seller or its Subsidiaries with respect to the Van Kampen Business), which is required to maintain a certain amount of regulatory capital in accordance with applicable Law has any agreement, arrangement or understanding with any Government Entity to increase its regulatory capital above the amount required to be maintained as of the date of this Agreement.

     (l) To the Knowledge of Seller, except as not prohibited under applicable Law, in the past three years, the Van Kampen Business has not offered or given anything of value to any official of a Government Entity, any political party or official thereof, or any candidate for political office (i) with the intent of inducing such Person to use such Person’s influence with any Government Entity to affect or influence any act or decision of such Government Entity or to assist the obtaining or retaining of business for, or with, or the directing of business to the Van Kampen Business, or (ii) constituting a bribe, kickback or illegal or improper payment to assist the Van Kampen Business in obtaining or retaining business for or with any Government Entity.

     Section 3.21. Assets Under Management; Investment Advisory Activities.

     (a) Prior to the execution of this Agreement, Seller has delivered to Buyer a list attached as Exhibit J hereto, as of the Base Date (the “Base Revenue Schedule”), with respect to each Client of the Van Kampen Business of:

     (i) the name of such Client (except as set forth in Section 3.21(a) of the Seller Disclosure Schedule);

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     (ii) the Adjusted Assets Under Management (calculated in accordance with clause (a) of the definition of such term) of such Client as of the Base Date;

     (iii) the stated annualized fee rate payable to the Van Kampen Business by such Client under the applicable Existing Advisory Agreement and the amount of any related fee paid by such Client to any Person other than a Transferred Entity and, if such Client is a Fund, the terms of any fee waivers, expense reimbursement (or assumption) arrangements and unreimbursable payments being made by Seller or its Subsidiaries to brokers, dealers or other Persons with respect to the distribution of shares of a Fund or to services provided to its Fund holders;

     (iv) if such Client is a Fund, the rate and method of computation of any subadvisory, administration or other fees payable to any Person (other than another Transferred Entity) by a Seller Subsidiary with respect to such Fund;

     (v) the terms and methods of computation of any referral or servicing fees, if any, payable by Seller or its Subsidiaries to any Person (other than a Transferred Entity) in respect of such Client; and

     (vi) the Revenue Run-Rate in respect of such Client as of the Base Date.

     For purposes of this Section 3.21(a) and the Base Revenue Schedule, all natural persons and investment vehicles of natural persons that invest through separately managed accounts opened through the same broker-dealer or other financial institution shall be considered a single Client.

     (b) Each Existing Advisory Contract and any amendment, continuance or renewal thereof, in each case, in effect as of the date of this Agreement, (i) has been duly authorized, executed and delivered by a Transferred Entity and (ii) is a valid and legally binding agreement, enforceable against the applicable Transferred Entity and, to the Knowledge of Seller, each other party thereto, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles, except, in any such case, for such matters that would not reasonably be expected to have a Van Kampen Material Adverse Effect. Other than reimbursement obligations pursuant to Existing Advisory Agreements as in effect on the date hereof and included on the list referenced in Section 3.21(a), none of Seller or its Affiliates has any arrangements or agreements with any of the Funds pursuant to which Seller or any such Affiliate has agreed to pay, reimburse or otherwise be responsible for any material expense of or material claims against any of the Funds.

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     (c) None of the Transferred Entities that is an investment adviser or any other Transferred Entity Controlling or Controlled by such Transferred Entity or, with respect to the Van Kampen Business, Seller or its Subsidiaries or, to the Knowledge of Seller, any other person “associated” (as defined under the Investment Advisers Act) with any such Transferred Entity that is an investment adviser, Seller or its Subsidiaries has been in the past three years or is subject to disqualification pursuant to Section 203(e)-(f) of the Investment Advisers Act to serve as an investment adviser or as an associated person of a registered investment adviser, except for any such disqualification that would not reasonably be expected to be material to such Transferred Entity or the Van Kampen Business, unless, in each case, such Transferred Entity, Person or associated person has received exemptive relief from the SEC or any other applicable Government Entity with respect to any such disqualification. Seller has made available to Buyer, prior to the date of this Agreement, a copy of any exemptive order in respect of any such disqualification. As of the date of this Agreement, there is no Legal Proceeding pending and served or, to the Knowledge of Seller, threatened by any Government Entity against any of the Transferred Entities that would result in any such disqualification, except for any such disqualification that would not reasonably be expected to be material to such Transferred Entity. None of the Transferred Entities or, to the Knowledge of Seller, any “affiliated person” (as defined under the Investment Company Act) thereof has been in the past three years or is subject to disqualification as an investment adviser or subject to disqualification to serve in any other capacity described in Sections 9(a) and 9(b) of the Investment Company Act for an investment company registered under the Investment Company Act, except for any such disqualification that would not reasonably be expected to be material to such Transferred Entity, unless, in each case, such Person, as applicable, has received, to the Knowledge of Seller, exemptive relief from the SEC or any other applicable Government Entity with respect to any such disqualification. Seller has made available to Buyer, prior to the date of this Agreement, a copy of any exemptive order or other relief issued by the SEC in respect of any such disqualification. There is no Legal Proceeding pending and served or, to the Knowledge of Seller, threatened by a Government Entity against any of the Transferred Entities that would result in any such disqualification, except for any such disqualification that would not reasonably be expected to be material to such Transferred Entity.

     (d) No Transferred Entity acting as a qualified professional asset manager (a “QPAM”) as defined in Department of Labor Class Exemption 84-14 (“PTE 84-14”) prior to the Closing, any affiliate thereof (as defined for purposes of PTE 84-14) or any direct or indirect owner of a 5% or more interest in such Transferred Entity (as determined for purposes of PTE 84-14) has been convicted of or released from imprisonment with respect to any felony or other crime that would prevent such Transferred Entity from qualifying as a QPAM after the Closing.

     Section 3.22. Funds. (a) Organization. Each Fund has been duly organized and is validly existing and in good standing under the Laws of the

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jurisdiction of its organization and has, and at all times in the past three years (or, if later, since its launch date), had the requisite power, right and authority to carry on its business as it is now (or was then) being conducted in each jurisdiction where it is organized or listed on an exchange, except where such lack of such power, right or authority would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect, and, with respect to a U.S. Fund either (i) is not required to register with the SEC as an investment company under the Investment Company Act or (ii) is duly registered with the SEC as an investment company under the Investment Company Act. Each Fund that is required to be registered as a regulated fund or investment company under the Laws of any jurisdiction other than the United States is so registered, other than any failure to be so registered that would not reasonably be expected to have a Van Kampen Material Adverse Effect.

     (b) Fund Boards. Each of the ’40 Act Funds is governed by a board of trustees or board of directors (if any) at least 75% of whom are not “interested persons” (as defined in the Investment Company Act) of the investment adviser to such ’40 Act Fund (or, in the case of a ’40 Act Fund that is a Sub-Advised Fund, of the Van Kampen Business sub-adviser to such Fund).

     (c) Compliance. (i) Each Fund has complied in the past three years (or, if later, since its launch date) and is in compliance in all material respects with its investment policies and restrictions, if any, as such policies and restrictions may be set forth in its offering or plan documents (as they may be amended from time to time) and in applicable Laws, if any, and (ii) the value of the Net Assets of each Fund has been determined in the past three years (or, if later, since its launch date) and is being determined using portfolio valuation methods that comply in all material respects with the methods described in its offering or plan documents, if any, and the requirements of any applicable Laws, other than, in each case of (i) and (ii), any non-compliance that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. There is no Legal Proceeding pending and served on any Fund or, to the Knowledge of Seller, threatened against any Fund except as would not reasonably be expected, individually or in the aggregate, to have a Van Kampen Material Adverse Effect. There is no material injunction, order, award, judgment, settlement, decree or regulatory restriction not generally imposed on similarly situated investment funds imposed upon or entered into by any Fund.

     (d) Fund Financial Statements.

     (i) Seller has made available to Buyer, or directed Buyer to, prior to the date of this Agreement copies of the financial statements for the most recently completed fiscal year, to the extent that they exist, of each of the top 50 Funds of the Van Kampen Business based on Net Assets as of June 30, 2009 (the “Fund Financial Statements”). Each of the Fund Financial Statements for such top 50 Funds and all other Funds for such period fairly presents in all material respects the results of

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operations and changes in Net Assets of the respective Fund as of the date thereof

     (ii) (A) The annual report to shareholders of each of the ’40 Act Funds with respect to such ’40 Act Fund’s most recently completed fiscal year and all other documents filed subsequent to such fiscal year end under Section 30(a) or 30(b) of the Investment Company Act, in each case in the form filed with the SEC or delivered to shareholders (each, a “’40 Act Fund Financial Report”), did not, as of their respective dates (without giving effect to any amendment thereto filed after the date hereof) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were or are made, not misleading, and (B) each of the financial statements contained in or incorporated by reference into the ’40 Act Fund Financial Reports (including the related notes and schedules thereto) fairly presents in all material respects the financial position of the entity or entities to which it relates as of its date, in accordance with generally accepted accounting principles consistently applied, except in each case as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements, except in the cases of clauses (A) and (B) for instances of noncompliance that would not, individually or in the aggregate, have a Van Kampen Material Adverse Effect.

     (e) Principal Offering Documents for Funds. To the extent a prospectus, statement of additional information or offering memorandum (“Prospectus”) is used as of the date of this Agreement to offer shares or other interests in a Fund that is one of the top 50 Funds of the Van Kampen Business based on Net Assets as of June 30, 2009, a copy of such Prospectus has been made available to Buyer prior to the date of this Agreement. Each Prospectus used as of the date of this Agreement to offer shares or other interests in a Fund has been prepared in compliance with the requirements of applicable Laws, except for any failure to comply that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. In the past three years, each Fund has timely filed all material Prospectuses, financial statements, other forms, reports, sales literature and advertising, and any other documents required to be filed with any applicable Government Entity (the “Reports”), except where the failure to timely file a Report would not reasonably be expected to have a Van Kampen Material Adverse Effect. In the past three years, the Reports have been prepared in compliance with the requirements of applicable Laws, except for any failure to comply that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (f) Fund Shares and Other Interests. All issued and outstanding Fund shares and other interests have been duly and validly issued, are fully paid and, unless otherwise required by applicable Law, nonassessable, and were not issued

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in violation of preemptive or similar rights or applicable Law, except for such matters that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. In the past three years, all outstanding Fund shares and other Fund interests that were required to be registered under the Securities Act have been sold in all material respects pursuant to an effective registration statement filed thereunder (and, where applicable, under the Investment Company Act) and are qualified in all material respects for sale, or an exemption from any requirement to so qualify is in full force and effect, in each state and territory of the United States and the District of Columbia and in any foreign jurisdiction to the extent required under applicable Law and no such registration statement contained, as of its effective date, any untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or is subject to any stop order or similar order restricting its use, other than, in each case, any failure to be registered or qualified or exempt, any inclusion of an untrue statement of a material fact or any failure to state a material fact that is required to be stated or any order restricting its use that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (g) Contracts. No Fund is party to or subject to any Contract which is in violation, breach or event of default, or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder, on the part of the Fund, or to the Knowledge of Seller, any other Person, except for such matters that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. All investment advisory services rendered to the Funds by the Transferred Entities have been rendered by them pursuant to Contracts that were approved by the boards of the Funds and annually continued in effect by such boards where such approval and annual continuances are required under applicable Law and, to the extent required by applicable Law, the holders of shares of beneficial interest or of common stock in each Fund, except for such matters that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (h) Policies and Procedures. Each ’40 Act Fund has written policies and procedures adopted pursuant to Rule 38a-1 of the Investment Company Act that are reasonably designed to prevent, detect and correct material violations of the Federal Securities Laws, as such term is defined in Rule 38a-1(e)(1) under the Investment Company Act. In the past three years, there have been no Material Compliance Matters, as such term is defined in Rule 38a-1(e)(2) under the Investment Company Act, for any ’40 Act Fund, other than those which (i) have been reported to the applicable Fund board (or in the case of a UIT Fund, the applicable depositor or principal underwriter) and satisfactorily remedied or are in the process of being remedied or (ii) would not reasonably be expected to have a Van Kampen Material Adverse Effect. Each Fund that is required to be registered under any other applicable Law has, to the extent required by such other applicable Law, written policies and procedures that are reasonably designed to

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prevent, detect and correct material violations of such applicable Law, and, in the past three years, no such violations have been detected other than those that have been satisfactorily remedied or are in the process of being remedied or would not reasonably be expected to have a Van Kampen Material Adverse Effect. Section 3.22(h) of the Seller Disclosure Schedule sets forth a true, correct and complete list of all strategies or plans currently contemplated by Seller or its Affiliates with respect to the Funds to effect any merger or closure (or, in respect of the Funds branded “Van Kampen” or any derivative thereof, re-branding of the Fund name) of, or any replacement of the portfolio management team for, any Fund or other Client Investment Advisory Arrangement, other than as contemplated by Section 7.05.

     (i) Proxy Solicitation Materials. Except to the extent it relates to Buyer, its Affiliates or the Buyer Funds or includes information provided by Buyer, its Affiliates or the Buyer Funds specifically for inclusion or incorporation by reference therein (to which extent no representation by Seller is made) and except in the case of a Fund Merger Proxy Statement/Prospectus, the proxy solicitation, or other consent solicitation, materials prepared by Seller or its Subsidiaries and distributed to the investors in a Fund or to Advisory Clients in connection with the Assignment Requirements will not, at the time of the mailing of such proxy, or other consent, materials or any amendments or supplements thereto, or at the time of the shareholders or investors meeting held in relation thereto, contain any untrue statement of a material fact or omit any 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 and will contain all information necessary in order to make the disclosure of information therein satisfy the requirements of applicable Laws in all material respects. None of the information supplied or to be supplied by or on behalf of Seller, its Affiliates or the Seller Funds specifically for inclusion or incorporation by reference in a Fund Merger Proxy Statement/Prospectus will, at the time of the mailing of such document or any amendments or supplements thereto, or at the time of the shareholders or investors meeting held in relation thereto, contain any untrue statement of a material fact or omit to state any 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.

     (j) Existing Advisory Contracts. Each Existing Advisory Contract subject to Section 15 of the Investment Company Act has been duly approved, continued and at all times in the past three years has been in compliance with the Investment Company Act, except for such matters that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Each such Existing Advisory Contract has been performed by the Van Kampen Business in the past three years in accordance with its terms, except for such matters that would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

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     (k) Taxes. Section 3.22(k) of the Seller Disclosure Schedule sets forth with respect to each Fund the intended classification of such Fund as:

     (i) a regulated investment company taxable under Subchapter M of Chapter 1 of the Code and under any similar provisions of state or local Law in any jurisdiction in which such Fund filed, or is required to file, a Tax Return;

     (ii) a partnership for U.S. federal income tax purposes and any similar provisions of state or local law in any jurisdiction in which such Fund filed or was required to file, a Tax Return;

     (iii) a grantor trust taxable under Subchapter J of Chapter 1 of the Code and under any similar provisions of state or local Law in any jurisdiction in which such Fund filed, or is required to file, a Tax Return; or

     (iv) an entity organized under the laws of a foreign country that qualifies for the special Tax treatment under the laws of such foreign country specified on Section 3.22(k) of the Seller Disclosure Schedule with respect to such Fund;

and, to the Knowledge of Seller, each such Fund has qualified, for all taxable years since its inception, to be so classified. Except as would not reasonably be expected to have a Van Kampen Material Adverse Effect, each Fund (i) has duly and timely filed with the appropriate Government Entity all material Tax Returns required to be filed and all such Tax Returns are true, correct and complete in all material respects, (ii) has timely paid, or withheld and paid over, all Taxes due or claimed to be due by any Government Entity or with respect to Taxes not yet due and payable, made an adequate provision on its financial statements in accordance with GAAP, IFRS or other relevant applicable accounting principles, (iii) is in compliance with all applicable Laws regarding the filing, solicitation, collection and maintenance of any forms, certifications and other information required in connection with federal, state, local or foreign Tax reporting requirements, (iv) that is intended to be a tax-exempt municipal bond fund has satisfied the requirements of Section 852(b)(5) of the Code, and is qualified to pay exempt interest dividends as defined therein, and (v) with variable insurance trust portfolios has complied with the diversification requirements of Section 817 of the Code.

     Section 3.23. Advisory Clients. (a) In the past three years, each account of an Advisory Client has been operated in compliance with the terms of the relevant Contract under which the Van Kampen Business acts as an investment adviser or sub-adviser to, or manages any investment or trading account of, such Advisory Client, except for such matters as would not reasonably be expected to have a Van Kampen Material Adverse Effect.

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     (b) In the past three years, for each account of any Advisory Client maintained by the Van Kampen Business or any Fund, and in both cases only where the Van Kampen Business is responsible for pricing, there has existed no unremedied “out of balance” condition, pricing error or similar condition, except for such matters as would not reasonably be expected to have a Van Kampen Material Adverse Effect.

     (c) The Transferred Entities that are investment advisers registered under the Investment Advisers Act have adopted and implemented procedures or practices for the allocation of securities purchased for its Advisory Clients that comply with the Investment Advisers Act and other applicable Law in all material respects.

     Section 3.24. Product Performance Record. (a) The Van Kampen Business currently maintains the investment management performance composites listed in Section 3.24 of the Seller Disclosure Schedule (the “Composites”), which schedule also lists the legal entity that maintains each such Composite. The performance history of the Composites is accurate and complete and has been prepared in accordance with the Global Investment Performance Standards (“GIPS”) in all material respects. All of the investment decision makers responsible for the investment performance reflected in the Composites who are currently employed by Seller or its Affiliates are Van Kampen Business Employees, and the Van Kampen Business will own, and Seller will not object to the Van Kampen Business’s use of, all Composites following the Closing. Seller and its Affiliates have taken commercially reasonable actions necessary for the continued use of the Composites by the Van Kampen Business following the Closing in compliance with GIPS. The Van Kampen Business claims firm-wide compliance with GIPS.

     (b) All performance information provided by the Van Kampen Business to potential Clients in the past three years has been presented in a GIPS compliant manner and constitutes a GIPS compliant performance presentation or in a presentation that complies in all material respects with the GIPS advertising guidelines, as appropriate.

     (c) In the past three years, the GIPS compliance of the Van Kampen Business has undergone verification completed by Ernst & Young for the annual period ending December 31, 2006, and such verification has been provided or made available to Buyer.

     (d) The Van Kampen Business maintains all documentation necessary to form the basis for, demonstrate or recreate the calculation of the performance or rate of return of all accounts that the Van Kampen Business includes in a Composite as required by GIPS to support the claim of GIPS compliance by the Van Kampen Business in all material respects.

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     (e) In the past three years, there has been no investment performance presented by the Van Kampen Business that was earned outside the Van Kampen Business.

     Section 3.25. ERISA Compliance. To the extent any Transferred Entity or the Seller and its Subsidiaries, on behalf of the Van Kampen Business, has acted as a fiduciary (within the meaning of ERISA) with respect to the assets of any Client that is (i) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (ii) a Person acting on behalf of such a plan or (iii) any Person whose assets are “plan assets” within the meaning of Department of Labor Regulation Section 2510.3-101, such Person has acted in compliance with the applicable requirements of ERISA, except for any failure to act in compliance as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. To the extent any such Person has relied upon any statutory or administrative exemption from the prohibited transaction rules of Section 406 of ERISA and Section 4975 of the Code with respect to the Van Kampen Business, such Person is eligible to rely on such exemption and has satisfied the requirements of such exemption, except for any failure to be so eligible or to so satisfy as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     Section 3.26. Property. (a) The Van Kampen Business does not own any real property or interests therein.

     (b) The Transferred Entities have valid leasehold interests in all leased real property and assets reflected on the Balance Sheet or acquired after the Balance Sheet Date. None of such property is subject to any Encumbrance, except for Permitted Encumbrances or Encumbrances which do not materially detract from the value or materially interfere with any present or intended use of such property or assets.

     (c) All leases of such real property are in good standing and are valid, binding and enforceable in accordance with their respective terms and there is not under any such lease any existing default by one of the Transferred Entities or, to the Knowledge of Seller, any other party thereto, or any event which with notice or lapse of time or both would constitute such a default and the Transferred Entities have not received any notice of default under any lease which has not been cured or waived, except as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect. Section 3.26(c) of the Seller Disclosure Schedule sets forth a list of all leased, subleased or licensed real properties of the Van Kampen Business or to which a Transferred Entity is a party as of the date hereof.

     Section 3.27. Sufficiency of Assets. Assuming replacement by Buyer (or, as applicable, continued effectiveness) of all Contracts described in Section 3.06 of the Seller Disclosure Schedule, except for those assets and services to be

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provided pursuant to the terms of the Ancillary Agreements (other than the Agreement and Plan of Merger), and those services and operations that are being assumed upon Closing by Buyer pursuant to the Conversion Plan, (a) the Purchased Assets and the assets, properties and rights owned by the Transferred Entities, taken together, are in all material respects sufficient (i) for the conduct of the Van Kampen Business immediately following the Closing in substantially the same manner as currently conducted and (ii) to provide the services as currently provided by the Seller and its Affiliates in connection with the Van Kampen Business in all material respects, and (b) there are no material assets, properties or rights used in the conduct of the Van Kampen Business as presently conducted which are not owned, leased or licensed by the Transferred Entities other than the Purchased Assets.

     Section 3.28. Finders’ Fees. There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Seller or any of its Affiliates who would be entitled to any fee or commission from any Person (other than Seller or one of its Affiliates other than a Transferred Entity) in connection with this Agreement, any of the Ancillary Agreements or the transactions contemplated hereunder and thereunder.

     Section 3.29. Insurance. Section 3.29 of the Seller Disclosure Schedule sets forth a true, correct and complete list and a brief description of all material insurance policies in force on the date hereof with respect to the business and assets of the Van Kampen Business (other than the Purchased Assets). The Transferred Entities maintain, or Seller or one of its Subsidiaries maintains on behalf of the portion of the Van Kampen Business owned by them, such worker’s compensation, comprehensive property and casualty, liability, errors and omissions, directors’ and officers’, fidelity and other insurance as they may be required to maintain under applicable Laws. Seller and its Subsidiaries (with respect to the Van Kampen Business) and the Transferred Entities have complied in all material respects with the terms and provisions of such policies and bonds. The Van Kampen Business is insured against such losses and risks and in such amounts as are customary in the businesses in which they are engaged.

     Section 3.30. Affiliate Arrangements. Other than ordinary course Contracts, liabilities or obligations that will not survive the Closing by virtue of Section 7.04, there is no material Contract, liability or obligation (whether or not evidenced by a writing) between a Transferred Entity, on the one hand, and Seller or any of its Affiliates (other than the Transferred Entities), on the other hand (any such Contract, liability or obligation, an “Affiliate Arrangement”).

     Section 3.31. Inspections; No Other Representations. Seller is an informed and sophisticated purchaser, and has engaged expert advisors, experienced in the evaluation and investment in companies such as Buyer as contemplated hereunder. Seller has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with

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respect to the execution, delivery and performance of this Agreement. Seller agrees to accept the Aggregate Equity Consideration based upon its own inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to Buyer, except as expressly set forth in this Agreement. Without limiting the generality of the foregoing, Seller acknowledges that Buyer makes no representation or warranty with respect to (i) any projections, estimates or budgets delivered to or made available to Seller of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of Buyer and its Subsidiaries or the future business and operations of Buyer and its Subsidiaries or (ii) any other information or documents made available to Seller or its counsel, accountants or advisors with respect to Buyer or its Subsidiaries or their respective businesses or operations, except as expressly set forth in this Agreement.

     Section 3.32. Filings. None of the information regarding Seller, any of its Affiliates or any Fund supplied or to be supplied by Seller, any of its Affiliates or any Fund in writing specifically for inclusion in any application, filing or other document to be filed by Buyer, its Subsidiaries or a Buyer Fund with any Government Entity in connection with the transactions contemplated by this Agreement will, at the respective times such documents are filed with any such Government Entity, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

ARTICLE 4
Representations and Warranties of Buyer

     Subject to Section 13.11, except as set forth in the Buyer Disclosure Schedule, Buyer represents and warrants to Seller as of the date of this Agreement and as of the Closing Date as follows:

     Section 4.01. Organization and Qualification. Buyer is a company duly incorporated, validly existing and in good standing under the Laws of Bermuda. Buyer has the requisite corporate power and authority to carry on its business as conducted as of the date of this Agreement and to own, lease and operate all of its properties and assets, in all material respects as conducted, owned, leased or operated as of the date of this Agreement. Buyer is duly qualified to do business in each jurisdiction in which the nature of its business or the character or location of the properties and assets owned, leased or operated by it makes such qualification necessary other than any failure to be so qualified that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect. Buyer has made available to Seller, prior to the date of this

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Agreement, complete and correct copies of the Organizational Documents of Buyer as in effect on the date of this Agreement.

     Section 4.02. Capitalization. (a) The authorized capital stock of Buyer as of the date of this Agreement consists of 1,070,000,000 shares divided into (i) 1,050,000,000 shares of Buyer Stock and (ii) 20,000,000 undesignated shares. As of October 15, 2009, there were (i) 427,916,244 shares of Buyer Stock issued and outstanding, (ii) no undesignated shares, (iii) employee stock options to purchase an aggregate of 18,952,728 shares of Buyer Stock, all of which were fully vested and exercisable, (iv) 19,431,039 shares of unvested Buyer Stock issuable pursuant to Buyer’s equity compensation plans, (v) 2,214,492 unvested performance based share awards, and (vi) other rights to purchase an aggregate of 188,170 shares of Buyer Stock outstanding pursuant to Buyer’s equity compensation plans and arrangements.

     (b) All outstanding shares of capital stock of Buyer have been, and all shares that may be issued pursuant to any employee stock option or other equity compensation award or equity compensation plan or arrangement will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued, fully paid and nonassessable and free of preemptive rights. As of October 15, 2009, except as set forth in Section 4.02(a), there are no outstanding (i) shares of capital stock or other voting securities or equity ownership interests in Buyer or (ii) Equity Rights under which Buyer is or may become obligated to issue, deliver, redeem, purchase or sell, or cause to be issued, delivered, redeemed, purchased or sold, or in any way dispose of, any shares of its capital stock or other equity interests, or any securities or obligations that are exercisable or exchangeable for, or convertible into, any shares of its capital stock or other equity interests, and no securities or obligations evidencing such rights are authorized, issued or outstanding. As of October 15, 2009, Buyer did not have any (x) outstanding Indebtedness that could convey to any Person the right to vote, or that is convertible into or exercisable for capital stock or other equity interests of Buyer or (y) rights that entitle or convey to any Person the right to vote with the holders of capital stock of Buyer on any matter. As of October 15, 2009, the outstanding capital stock and other equity interests of Buyer were not subject to any Contract restricting or otherwise relating to the voting, dividend rights or disposition of such capital stock or other equity interests. As of October 15, 2009, there were no outstanding or authorized phantom stock, profit participation or similar rights providing economic benefits based, directly or indirectly, on the value or price of the capital stock or other equity interests of Buyer.

     Section 4.03. Corporate Authorization. (a) Buyer has full corporate power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it is or will be a party and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder. The execution, delivery and performance by Buyer of this Agreement and each Ancillary Agreement to which

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it is or will be a party, and each of the transactions contemplated hereunder (including the Merger) and thereunder, have been duly and validly authorized, and no additional corporate or shareholder authorization or consent is required in connection with the execution, delivery and performance by Buyer of this Agreement and each Ancillary Agreement or any of the transactions contemplated hereunder or thereunder.

     (b) The board of directors of Merger Subsidiary has approved and declared advisable this Agreement, the Agreement and Plan of Merger and the transactions contemplated hereby (including the Merger) and has resolved to recommend approval and adoption of this Agreement and the Agreement and Plan of Merger (including the Merger) by the sole stockholder of Merger Subsidiary. The sole stockholder of Merger Subsidiary has approved and adopted this Agreement and the Agreement and Plan of Merger (including the Merger). No other corporate proceedings on the part of Merger Subsidiary or its sole stockholder are necessary to approve this Agreement, the Agreement and Plan of Merger or to consummate the Merger or other transactions contemplated hereby.

     Section 4.04. Consents and Approvals. Other than in connection with (i) the HSR Act or any other Antitrust Laws, (ii) any applicable banking, securities or other financial services Laws of any banking commission or any securities or other financial services regulator, (iii) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State, (iv) filings with the NYSE and compliance with any applicable requirements of the Securities Act, the Exchange Act and any other applicable state or federal securities laws or (v) such other Laws, in each case of (i) through (v), that are set forth on Section 4.04 of the Buyer Disclosure Schedule (the matters covered under clauses (i) through (v) above, collectively, the “Buyer Required Approvals”), Buyer and its Affiliates are not required to obtain any authorization, waiver, consent or approval of, make any filing or registration with, or give any notice to, any Government Entity or to obtain any Permit in connection with the execution, delivery and performance by Buyer of this Agreement or the execution, delivery and performance by Buyer and its Affiliates of each of the Ancillary Agreements to which Buyer or any of its Affiliates is or will be a party or the consummation by Buyer or its Affiliates of any of the transactions contemplated hereunder (including the Merger) or thereunder, other than any authorization, waiver, consent, approval, filing, registration notice or Permit, the failure of which to obtain, make or give would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect. As of the date hereof, Buyer is not aware of any reason why any Buyer Required Approvals will not be received in order to permit the consummation of the transactions contemplated hereby.

     Section 4.05. Non-Contravention. The execution, delivery and performance by Buyer of this Agreement and by Buyer and its Affiliates of each of the Ancillary Agreements to which Buyer or any of its Affiliates is or will be a party, and the consummation by Buyer and its Affiliates of the transactions

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contemplated hereunder and thereunder, do not and will not (i) conflict with or violate any provision of the Organizational Documents of Buyer or any of its Affiliates, (ii) assuming the receipt of all consents, approvals, waivers and authorizations and the making of the notices and filings referred to in Section 4.04, conflict with, or result in the breach of, or constitute a default under, or result in the termination, Encumbrance, cancellation, modification or acceleration of any right or obligation of Buyer or any of its Affiliates under, or give rise to any payment conditioned, in whole or in part, on approval or consummation of the transactions contemplated hereby, or result in a loss of any benefit to which Buyer or any of its Affiliates is entitled, with or without the giving of notice, the lapse of time or both, under any Contract or other agreement or instrument binding upon Buyer or any of its Affiliates or to which the property of Buyer or any of its Affiliates is subject or (iii) assuming the receipt of all consents, approvals, waivers and authorizations and the making of notices and filings (A) referred to in Section 4.04 or (B) required to be received or made by any of the Transferred Entities or by Seller of any of its Affiliates, violate or result in a breach of or constitute a default under any Law to which Buyer or any of its Affiliates is subject or under any Permit of Buyer or any of its Affiliates, other than, in the case of clauses (ii) and (iii), any conflict, breach, default, termination, Encumbrance, cancellation, modification, acceleration or loss that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect (excluding, for this purpose only, clause (H) of the definition of Material Adverse Effect).

     Section 4.06. Binding Effect. Assuming the due authorization, execution and delivery of this Agreement and the Ancillary Agreements by Seller (or, in the case of the Ancillary Agreements, Seller or an Affiliate of Seller), this Agreement constitutes, and each Ancillary Agreement when executed and delivered will constitute, a valid and legally binding obligation of Buyer (or, in the case of the Ancillary Agreements, of Buyer or an Affiliate of Buyer) enforceable against Buyer or such Affiliate in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

     Section 4.07. Aggregate Equity Consideration. The Aggregate Equity Consideration, when issued to Seller pursuant to this Agreement, shall be validly issued, fully paid, non-assessable and free and clear of any Encumbrance (other than restrictions on transfer which arise under applicable securities Laws or under this Agreement) and shall not have been issued in violation of any preemptive rights.

     Section 4.08. SEC Matters. (a) Buyer has filed or furnished, as applicable, on a timely basis all forms, statements, certifications, reports and documents required to be filed, furnished or submitted by it with the SEC under the Exchange Act or the Securities Act in the last three years (the forms, statements, reports and documents filed, furnished or submitted in the last three

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years and those filed or furnished subsequent to the date hereof including any amendments thereto, the “Buyer SEC Reports”). Each of the Buyer SEC Reports, at the time of its filing or being furnished or submitted, complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act, and any rules and regulations promulgated thereunder applicable to the Buyer SEC Reports, except for such noncompliance that would not, individually or in the aggregate, reasonably be expected to result in a Buyer Material Adverse Effect. As of their respective dates (or, if amended prior to the date of this Agreement, as of the date of such amendment) the Buyer SEC Reports did not, and, with respect to Buyer SEC Reports filed or furnished after the date hereof will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made (or will be made), not misleading.

     (b) Buyer is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the NYSE.

     (c) Buyer has established and maintained disclosure controls and procedures required by Exchange Act Rules 13a-14 and 15d-14, except as disclosed in the Buyer SEC Reports. Such disclosure controls and procedures are adequate and effective to ensure that information required to be disclosed by Buyer, including information relating to its consolidated Affiliates, is recorded and reported on a timely basis to its chief executive officer and chief financial officer by others within those entities.

     (d) Each of the consolidated financial statements of Buyer and its Subsidiaries contained in the Buyer SEC Reports filed in respect of periods from and after December 31, 2007 (the “Buyer Financial Statements”), together with related schedules and notes, presents fairly, in conformity with GAAP applied on a consistent basis (except as may be indicated in the notes thereto), the consolidated financial position of Buyer and its consolidated Subsidiaries at the dates indicated and their consolidated results of operations and cash flows for the periods specified (subject to normal year-end adjustments in the case of any unaudited interim financial statements).

     Section 4.09. Absence of Undisclosed Liabilities. There are no liabilities or obligations of Buyer or its Subsidiaries (whether known, absolute, accrued, contingent or otherwise and whether due or to become due), except for (a) liabilities or obligations to the extent reflected or reserved against on the last balance sheet included in the Buyer Financial Statements (the “Buyer Balance Sheet”), (b) liabilities or obligations that were incurred by Buyer or its Subsidiaries as a result of this Agreement or any Ancillary Agreement, (c) liabilities or obligations incurred in the ordinary course of business consistent with past practice since the date of the Buyer Balance Sheet or (d) other undisclosed liabilities which have not had, and would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect.

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     Section 4.10. Absence of Certain Changes. Since June 30, 2009, except as set forth in Buyer’s SEC reports, (i) no event has occurred or circumstance arisen or condition existed which has had or would reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect and (ii) prior to the date of this Agreement, except, in the case of clause (a), for any actions taken in connection with any transactions contemplated by this Agreement or any Ancillary Agreement, (a) each of Buyer and its Affiliates has conducted its business in the ordinary course of business consistent with past practice and (b) neither Buyer nor any of its Affiliates has taken any action that would be prohibited by the terms of Section 6.01(b) had such terms been applicable during such period.

     Section 4.11. Financial Capability. Buyer has, or will have at the Closing, funds sufficient to pay the amounts (including the Aggregate Cash Consideration) required to be paid under Article 2 and to pay all related fees and expenses.

     Section 4.12. Investment Purpose. Buyer is acquiring the interests in the Transferred Entities for its own account solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act or state securities or “blue sky” Law, or with any present intention of distributing or selling such interests in violation of any such Law. Buyer has requested, received, reviewed and considered all information that Buyer deems relevant in making an informed decision to acquire the Transferred Entities, and has had an opportunity to discuss the business, management and financial affairs of the Transferred Entities with management of the Van Kampen Business and also had an opportunity to ask questions of officers of Seller or its Affiliates (including the Transferred Entities) that were answered to Buyer’s satisfaction; provided that such inquires do not impair the rights of Buyer to rely on the representations and warranties of Seller as set forth in Article 3. Buyer understands that Seller is relying on the statements contained herein to establish an exemption from registration under U.S. federal and state securities Laws. Buyer acknowledges that the interests in the Transferred Entities are not registered under the Securities Act and that the interests in the Transferred Entities may not be transferred, sold or otherwise disposed of except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and pursuant to Laws and regulations of other jurisdictions as applicable.

     Section 4.13. Investment Advisory Activities. None of Buyer or any of its Affiliates that is an investment adviser subject to the Investment Advisers Act (a “Buyer Adviser”) or, to the Knowledge of Buyer, any other person “associated” (as defined under the Investment Advisers Act) with Buyer or any such Affiliate has been in the past three years or is subject to disqualification pursuant to Sections 203(e)-(f) of the Investment Advisers Act to serve as an investment adviser or as an associated person of a registered investment adviser, except for any such disqualification that would not reasonably be expected to be material to

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Buyer or such Buyer Adviser, unless, in each case, Buyer, such Affiliate or associated person has received exemptive relief from the SEC or any other applicable Government Entity with respect to any such disqualification. As of the date of this Agreement, there is no Legal Proceeding pending and served or, to the Knowledge of Buyer, threatened by any Government Entity against any of Buyer or the Buyer Advisers that would result in any such disqualification, except for any such disqualification that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect. None of Buyer or the Buyer Advisers or, to the Knowledge of Buyer, any “affiliated person” (as defined under the Investment Company Act) thereof has been in the past three years or is subject to disqualification as an investment adviser or subject to disqualification to serve in any other capacity described in Sections 9(a) and 9(b) of the Investment Company Act for an investment company registered under the Investment Company Act, except for any such disqualification that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect, unless, in each case, such Person, as applicable, has received, to the Knowledge of Buyer, exemptive relief from the SEC or any other applicable Government Entity with respect to any such disqualification. There is no Legal Proceeding pending and served or, to the Knowledge of Buyer, threatened by a Government Entity against any of Buyer or the Buyer Advisers that would result in any such disqualification, except for any such disqualification that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

     Section 4.14. Information in Proxy and Consent Solicitation Materials. None of the information supplied or to be supplied by or on behalf of Buyer, its Affiliates or the Buyer Funds specifically for inclusion or incorporation by reference in the proxy solicitation, or other consent solicitation, materials distributed to the investors in a Fund or to Advisory Clients in connection with the Assignment Requirements will, at the time of the mailing of such proxy, or other consent, materials or any amendments or supplements thereto, or at the time of the shareholders or investors meeting held in relation thereto, contain any untrue statement of a material fact or omit to state any 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. Except to the extent it relates to Seller, its Affiliates or the Seller Funds or with respect to information provided by Seller, its Affiliates or the Seller Funds specifically for inclusion or incorporation by reference therein (to which extent no representation by Buyer is made), each Fund Merger Proxy Statement/Prospectus will not, at the time of the mailing of such document or any amendments or supplements thereto, or at the time of the shareholders or investors meeting held in relation thereto, contain any untrue statement of a material fact or omit any 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 and will contain all information necessary in order to make the disclosure of information therein satisfy the requirements of applicable Laws in all material respects.

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     Section 4.15. Section 15(f) of the Investment Company Act. None of Buyer or any of its respective “interested persons” (as that term is defined under applicable provisions of the Investment Company Act and interpreted by the SEC) has any express or implied understanding or arrangement which would impose an “unfair burden” (as such term is used in Section 15(f) of the Investment Company Act) on any of the ‘40 Act Funds for purposes of Section 15(f) of the Investment Company Act as a result of the transactions contemplated hereby or which would in any way cause Section 15(f) of the Investment Company Act to be unavailable to Seller.

     Section 4.16. Filings. None of the information regarding Buyer, any of its Affiliates or any Buyer Fund supplied or to be supplied by Buyer, any of its Affiliates or any Buyer Fund in writing for inclusion in any application, filing or other document to be filed with any Government Entity in connection with the transactions contemplated by this Agreement will, at the respective times such documents are filed with any such Government Entity, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

     Section 4.17. Compliance with Laws. In the past three years, Buyer, its Subsidiaries and the Buyer Funds have complied with, are currently in compliance with, and currently operate and maintain their businesses in compliance with, all applicable Laws, except for such failures to comply as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect. No unresolved investigation by any Government Entity with respect to any of Buyer, its Subsidiaries or the Buyer Funds is pending or, to the Knowledge of Buyer, threatened, and no Government Entity has notified Buyer or any of its Subsidiaries in writing or, to the Knowledge of Buyer, orally of its intention to conduct the same, except, in any such case, such investigations as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect. None of Buyer or its Affiliates or the Buyer Funds has received any written or, to the Knowledge of Buyer, oral notice or communication (i) of any unresolved violation or exception by any Government Entity, (ii) threatening to revoke or condition the continuation of any Permit or (iii) restricting or disqualifying their activities (except for restrictions generally imposed by rule, regulation or administrative policy on similarly regulated Persons generally), except in any such case, as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

     Section 4.18. Finders’ Fees. Except for fees that will be paid by Buyer, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Buyer or any of its Affiliates who might be entitled to any fee or commission from Buyer or any of its Affiliates in connection with the transactions contemplated by this Agreement or any Ancillary Agreement.

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     Section 4.19. Legal Proceedings. As of the date of this Agreement, there is no Legal Proceeding pending against, or to the Knowledge of Buyer, threatened against, or affecting Buyer or any of its Affiliates that challenges the validity or enforceability of this Agreement or seeks to enjoin or prohibit consummation of the transactions contemplated by this Agreement. There is no Legal Proceeding pending against, or to the Knowledge of Buyer, threatened against, or affecting Buyer or any of its Affiliates, except for any such Legal Proceeding that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

     Section 4.20. Material Contracts. (a) Neither Buyer nor any of its Subsidiaries is party to or bound by any Contract that is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) that has not been filed with the SEC in accordance with applicable Law (each of the foregoing, a “Material Contract”).

     (b) Each Material Contract is valid and binding and in full force and effect and, to Buyer’s knowledge, enforceable against the other party or parties thereto in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles). Except for breaches, violations or defaults which would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect, neither Buyer nor any of its Subsidiaries, nor to Buyer’s knowledge any other party to a Material Contract, has violated any provision of, or taken or failed to take any act which, with or without notice, lapse of time, or both, would constitute a default under the provisions of such Material Contract, and neither Buyer nor any of its Subsidiaries has received written notice that it has breached, violated or defaulted under any Material Contract.

     Section 4.21. Antitakeover Statutes. No antitakeover or similar statute or regulation or provision of the Organizational Documents of Buyer applies or purports to apply to this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby. No “control share acquisition,” “fair price,” “moratorium” or other antitakeover laws or any comparable provision of the Organizational Documents of Buyer apply to this Agreements, the Ancillary Agreement or the transactions contemplated hereby or thereby.

     Section 4.22. Certain Tax Matters. (a) Neither Buyer nor any of its Affiliates has taken or agreed to take any action, or is aware of any fact or circumstance relating to Buyer or a Transferred Entity after Closing, that could reasonably be expected to prevent the Merger from qualifying as a 368 Reorganization. This Section 4.22 shall not be applicable if Seller has made an Alternative Transaction Structure Election pursuant to Section 7.11.

     (b) Buyer (i) if the acquisition were to occur on the date hereof, would satisfy the “active trade or business test” with respect to the acquisition of Van

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Kampen set forth in Treas. Reg. Section 1.367(a)-3(c)(1)(iv), and does not have any plan or intention to take any action that would be reasonably expected to result in such test failing to be satisfied at the Closing Date, (ii) to its knowledge, was not a “passive foreign investment company” under Section 1297 of the Code (a “PFIC”) for the year ending December 31, 2008, and, to its knowledge, does not reasonably expect to be a PFIC for the years ending December 31, 2009 or December 31, 2010, and (iii) to its knowledge, is not currently a “controlled foreign corporation” under Section 957 of the Code, and is not aware of any facts or circumstances that would be reasonably expected to result in Buyer becoming such a corporation. Clause (i) of this Section 4.22(b) shall not be applicable if Seller has made an Alternative Transaction Structure Election pursuant to Section 7.12.

ARTICLE 5
Covenants of Seller

     Section 5.01. Conduct of the Van Kampen Business.

     Seller agrees that:

     (a) From the date of this Agreement to and through the earlier of the Closing and the termination of this Agreement in accordance with its terms, except (i) as set forth in Section 5.01(a) of the Seller Disclosure Schedule, (ii) as otherwise expressly contemplated by this Agreement, (iii) as required by any applicable Law or (iv) with Buyer’s prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall and shall cause its Subsidiaries (including the Transferred Entities) to conduct the Van Kampen Business in the ordinary course consistent with past practice in all material respects and use reasonable best efforts to (x) preserve intact its material business and operations and preserve intact its material rights, franchises, goodwill and relationships with the Funds (including the boards of directors and shareholders thereof), any applicable Government Entity and its Advisory Clients and other material clients, customers, lessors, suppliers and others with whom it does business and (y) keep available the services of the Van Kampen Business Employees.

     (b) Without limiting the generality of Section 5.01(a), from the date of this Agreement to and through the earlier of the Closing and the termination of this Agreement in accordance with its terms, except (i) as set forth in the corresponding subsection of Section 5.01(b) of the Seller Disclosure Schedule, (ii) as otherwise expressly contemplated by this Agreement, (iii) as required by any applicable Law, (iv) with Buyer’s prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall not, and shall cause its Subsidiaries (including the Transferred Entities) and the Van Kampen Business not to, do any of the following with respect to the Van Kampen Business:

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     (A) sell, lease, license (other than ordinary course intellectual property licenses), transfer, pledge, convey, assign, mortgage or otherwise dispose of any material rights, properties or assets, tangible or intangible, of the Van Kampen Business, other than (1) obsolete or non-used assets or rights or properties or assets with a net book value not in excess of $1,000,000 in the aggregate or (2) any dividend or distribution (or declaration thereof) to or by any Transferred Entity (other than dividends or distributions of Deferred Assets or any non-current assets);

     (B) other than transactions between or among Transferred Entities, issue, sell, deliver, pledge, transfer, dispose of or encumber (1) any equity interests or capital stock of or other equity or voting interest in any Transferred Entity or (2) any Equity Rights in respect of, securities convertible into, exchangeable for or evidencing the right to subscribe for or acquire either any securities convertible into or exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of, or other equity or voting interest in, any Transferred Entity or make any other changes in the capital structure of any Transferred Entity;

     (C) other than in the ordinary course of business consistent with past practice, amend, cancel, waive, modify, transfer or otherwise dispose of or permit to lapse any material Intellectual Property Rights used in connection with the Van Kampen Business or grant any material license or other material rights thereunder to any Person;

     (D) except as required by Law, the terms of any Benefit and Compensation Arrangement in effect as of the date of this Agreement or as set forth in Section 5.01(b)(iv)(D)(1)(y) of the Seller Disclosure Schedule, (1) increase or agree to increase the compensation of any Van Kampen Business Employee, other than (x) with respect to 2009, payment of incentive compensation in the ordinary course of business consistent with past practice and (y) with respect to 2010, salary increases in the ordinary course of business consistent with past practice for Van Kampen Business Employees with the title below Vice President, (2) materially increase or agree to materially increase any pension, welfare, retirement allowance, severance or other employee benefits under any Benefit and Compensation Arrangement, (3) convert a Benefit and Compensation Arrangement into an Assumed Benefit and Compensation Arrangement (other than with respect to an employment agreement, offer letter or similar individual Contract of an individual who becomes a Van Kampen Business Employee that is set forth on Section 9.01(f) of the

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Seller Disclosure Schedule), (4) amend or terminate any Benefit and Compensation Arrangement, to the extent that such amendment or termination would primarily result in a material benefit or material detriment to the Van Kampen Business Employees, or amend or terminate any Assumed Benefit and Compensation Arrangement, (5) (I) establish or adopt any Benefit and Compensation Arrangement or (II) enter into or adopt any new change in control or severance agreement, arrangement, plan or policy, in the case of any item in clause (I) or (II), for the primary benefit of, or with, any Van Kampen Business Employees or (6) grant or agree to grant any award to any Van Kampen Business Employee (other than any new hire whose annual compensation does not exceed $300,000), or accelerate the time of vesting or payment of any award held by any Van Kampen Business Employee, under any Assumed Benefit and Compensation Arrangement;

     (E) (1) hire any person who would be a Van Kampen Business Employee or individual independent contractor of a Transferred Entity, other than any individual hired to replace a terminated employee (and then only if such replacement employee would not have annual compensation in excess of $300,000 and is hired to work at the same location as the terminated employee) or (2) terminate any Van Kampen Business Employee with annual compensation in excess of $300,000 except under circumstances that constitute cause or due to misconduct reasonably deemed by Seller to be detrimental to Seller or any of its Affiliates or (3) except as set forth in Section 5.01(b)(iv)(E)(3) of the Seller Disclosure Schedule, promote, transfer or reassign any Van Kampen Business Employee;

     (F) (1) commence or pay, discharge, settle or satisfy any Legal Proceedings except settlements involving only monetary remedies with a value not in excess of $2,000,000 for any individual Legal Proceeding or $10,000,000 in the aggregate, other than the commencement of any such Legal Proceeding in the ordinary course of business consistent with past practice or (2) waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations;

     (G) make or incur any capital expenditures requiring payments in excess of $1,000,000 individually or $5,000,000 in the aggregate;

     (H) (1) enter into any Contract between Seller or any of its Affiliates, on the one hand, and any Transferred Entity, on

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the other hand, (2) enter into a Contract containing a “most favored nation” provision which could be applicable to Buyer and its Affiliates (excluding ordinary course “most favored nation” provisions only applicable to the Transferred Entities) following the Closing, (3) amend any existing Contract in a manner to provide that a “most favored nation” provision contained therein would have a similar effect, (4) except in the ordinary course of business consistent with past practice, materially amend, modify, terminate, renew or cancel any Significant Contract or enter into any new Contract that would be a Significant Contract if in existence as of the date hereof, or (5) enter into any Contract prohibiting or restricting the ability of the Van Kampen Business (or, following the Closing, Buyer and its Affiliates) to conduct its business, to engage in any business, to solicit any Person, to operate in any geographical area or to compete with any Person, that limits the freedom of the Van Kampen Business (or, following the Closing, Buyer and its Affiliates) to solicit or hire employees, or that requires the Van Kampen Business (or, following the Closing, Buyer and its Affiliates) to deal exclusively with any Person;

     (I) amend in any material respect any provision of any Organizational Document of any Transferred Entity or of any term of any outstanding security issued by any Transferred Entity;

     (J) other than acquisitions of assets or securities in the ordinary course of business consistent with past practice, merge or consolidate with any other Person or acquire (by merger, consolidation, purchase of assets or equity interests or otherwise) any businesses, assets, properties, or interests in any other Person;

     (K) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, in each case with respect to any Transferred Entity;

     (L) (1) other than pursuant to short-term borrowings under facilities in existence as of the date hereof and set forth on Section 3.18(a)(vi) of the Seller Disclosure Schedule in the ordinary course of the UIT Fund business consistent with past practice, incur, assume or guarantee any Indebtedness that will remain outstanding following the Closing (2), cancel or waive any claims under any material Indebtedness or amend or modify in any material respect the terms relating to any such Indebtedness, (3) other than in the ordinary course of business consistent with past practice, assume, guarantee, endorse or otherwise as an accommodation become responsible for obligations of any other

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Person, or (4) other than in the ordinary course of business consistent with past practice make any material loans or advances;

     (M) other than in the ordinary course of business consistent with past practice, reduce the amount of insurance coverage or fail to renew any material existing insurance policies of the Transferred Entities;

     (N) materially amend, terminate or allow to lapse any material Permit;

     (O) form, organize or sponsor any Fund except (1) as contemplated by or consistent with the current business plans of the Van Kampen Business as previously delivered to Buyer or (2) in the ordinary course of business consistent with past practice;

     (P) take any action that would prevent any Fund which is required to be registered with the SEC or comparable regulatory or self-regulatory authority of any jurisdiction as a pooled investment vehicle from qualifying as a “regulated investment company” under Section 851 of the Code or comparable pass-through regime in any other applicable jurisdiction to the extent such status is intended in such Fund’s constituent documents or marketing materials;

     (Q) make any material changes in its methods, practices, principles or policies of financial accounting, except as may be required under GAAP and approved in writing by Seller’s independent public accountants;

     (R) take any action that, if taken after the Closing without Buyer’s consent, would constitute a breach of Section 7.15 (it being understood that, for purposes of this Section 5.01(b)(iv)(R), Buyer may withhold, condition or delay its consent in its sole discretion); or

     (S) authorize or enter into any Contract or commitment with respect to any of the foregoing.

     Section 5.02. Access to Information; Presentment of Audited and Unaudited Financial Statements. (a) From the date hereof until the Closing Date, Seller will (i) give Buyer, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, personnel, books and records of Seller and its Subsidiaries relating to the Van Kampen Business, (ii) furnish to Buyer, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to the Van Kampen Business as such Persons may reasonably request and (iii) instruct the employees, counsel and financial advisors of Seller and its

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Subsidiaries to cooperate with Buyer in its investigation of the Van Kampen Business. Any investigation pursuant to this Section 5.02(a) shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Seller and its Subsidiaries. No information or knowledge obtained in any investigation pursuant to this Section 5.02(a) shall affect or be deemed to modify any representation or warranty made by any party hereunder. In addition to the foregoing, Seller will deliver or cause to be delivered to Buyer at, or promptly after, Closing all books, records and other documents (or copies thereof) relating to the Van Kampen Business (or, in the case of books, records or other documents that relate to the Van Kampen Business and to matters unrelated to the Van Kampen Business, shall deliver or cause to be delivered copies of all books, records or other documents to the extent relating to the Van Kampen Business) that are not in the possession of the Transferred Entities as of the Closing and that are reasonably necessary to the continuing operation of the Van Kampen Business, including such materials relating to the portion of the Van Kampen Business conducted in connection with the Purchased Assets and Assumed Liabilities.

     (b) From and after the Closing Date, upon reasonable notice and subject to applicable Laws relating to the exchange of information, Seller will promptly provide Buyer and its agents reasonable access to its books of account, financial and other records (including accountant’s work papers), information, employees and auditors to the extent reasonably necessary for Buyer in connection with Buyer’s preparation of its annual and periodic public financial reporting obligations (including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), any audit, investigation relating to the Van Kampen Business, dispute or litigation relating to the Van Kampen Business or any other reasonable business purpose relating to the Van Kampen Business including to the extent reasonably necessary to permit Buyer to determine any matter relating to its rights and obligations hereunder or to any period ending on or before the Closing Date; provided that any such access by Buyer shall not unreasonably interfere with the conduct of the business of Seller. No information or knowledge obtained in any investigation pursuant to this Section 5.02(b) shall affect or be deemed to modify any representation or warranty made by any party hereunder.

     (c) In furtherance of the obligations of Seller set forth in Section 5.02(b), Seller shall, at Seller’s expense, in respect of the Van Kampen Business (for the avoidance of doubt, including the Purchased Assets and Assumed Liabilities):

     (i) No later than 15 Business Days prior to the Closing Date, provide Buyer with:

     (A) an audited combined balance sheet as of December 31, 2008 and accompanying notes for the foregoing, prepared in accordance with GAAP, together with an unqualified

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(except for qualifications relating to any Accounting Policies) audit report of Seller’s independent accountants, with respect to such financial statements;

     (B) quarterly unaudited combined balance sheet as of June 30, 2009, and income statements for the periods ending March 31, June 30 and September 30, 2009, prepared in accordance with GAAP; and

     (C) annual unaudited combined balance sheet as of December 31, 2009 and related unaudited combined statements of income and cash flows for the year ended December 31, 2009 and accompanying notes for the foregoing, prepared in accordance with GAAP.

     (ii) No later than May 15, 2010, provide Buyer with annual audited combined balance sheet as of December 31, 2009 and related audited combined statements of income and cash flows for the year ended December 31, 2009 and accompany notes for the foregoing, prepared in accordance with GAAP, together with an unqualified audit report of Seller’s independent accountants, with respect to such financial statements.

     (iii) No later than the earlier of (i) 45 days after the Closing Date or (ii) ten days before the SEC filing deadline for the first Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, that Buyer is required to file with the SEC following the Closing Date, provide Buyer with:

     (A) one or more quarterly unaudited combined balance sheets as of the end of each calendar quarter ending after December 31, 2009, and one or more income statements for each such quarter, prepared in accordance with GAAP; and

     (B) an unaudited combined income statement for the period commencing since the last calendar quarter covered by the income statements to be provided pursuant to clause (A) and ending as of the Closing Date, prepared in accordance with GAAP.

     (d) Notwithstanding the foregoing, Buyer shall not have access to (i) materials entitled to legal privilege (or which could jeopardize the attorney-client privilege of Seller or its Affiliates), (ii) personnel records of Seller or its Subsidiaries (including the Transferred Entities) relating to individual performance or evaluation records, medical histories or other information which in Seller’s good faith opinion is sensitive or the disclosure of which could subject Seller or its Subsidiaries (including the Transferred Entities) to risk of liability or

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(iii) other information which in Seller’s good faith opinion could reasonably be expected to subject Seller or its Subsidiaries to liability. The parties shall endeavor in good faith to make appropriate substitute disclosure arrangements, if practicable, in a manner that does not give rise to any of the circumstances referred to in the preceding sentence.

     (e) Notwithstanding the foregoing, access to information with respect to Tax matters shall be provided as designated in Section 8.07.

     Section 5.03. Transfer Restrictions. (a) Subject to the restrictions on Transfer imposed by applicable Law and this Section 5.03, Seller and its Affiliates are permitted to Transfer any and all shares of the Aggregate Equity Consideration at any time.

     (b) Seller shall not, and shall cause its Affiliates not to, Transfer any shares of the Aggregate Equity Consideration:

     (i) (A) in one or more transactions in which any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) purchases 2.5% or more of the outstanding shares of Buyer Stock (for the avoidance of doubt, after giving effect to the conversion of the Equivalent Buyer Preferred Stock into Buyer Stock upon Transfer) or (B) to any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) who, after giving effect to such Transfer, would, to the knowledge of Seller after reviewing the most recent filings with respect to ownership of Buyer Stock by third parties on any of Schedules 13D or 13G or Form 13F under the Exchange Act, beneficially own 10% or more of the outstanding shares of Buyer Stock; provided that the foregoing restrictions in clauses (A) and (B) shall not apply to any Transfer of such shares in connection with open market sales at prevailing market prices obtainable at the time of such transfer through brokers in transactions on the NYSE (including such sales under Rule 144); or

     (ii) on any given day in an amount greater than 20% of the average daily trading volume of Buyer Stock for the 20-day period immediately preceding the date of such Transfer; provided that the foregoing restriction shall not apply to underwritten offerings of Buyer Stock.

     As used herein, “Transfer” means any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of Law or otherwise), either voluntary or involuntary, or entry into any contract, option or other arrangement or understanding with respect to any offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of Law or otherwise), of any capital stock or interest in any capital stock; provided, that a merger, amalgamation, plan of arrangement or consolidation or similar business combination transaction in which Seller is a

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constituent corporation (or otherwise a party including, for the avoidance of doubt, a transaction pursuant to which a Person acquires all or a portion of Seller’s outstanding capital stock, whether by tender or exchange offer, by share exchange, or otherwise) shall not be deemed to be the Transfer of any Buyer Stock or Equivalent Buyer Preferred Stock, as the case may be, provided that the primary purpose of any such transaction is not to avoid the provisions of this Agreement and that the successor or surviving Person to such a merger, amalgamation, plan of arrangement or consolidation or similar business combination transaction, if not Seller, expressly assumes all obligations of Seller under this Agreement. For purposes of this Agreement, the term Transfer shall include the sale of an Affiliate of Seller or Seller’s interest in an Affiliate which owns any Buyer Stock or Equivalent Buyer Preferred Stock, as the case may be, unless such Transfer is in connection with a merger, amalgamation, plan of arrangement or consolidation or similar business combination transaction referred to in the first proviso of the previous sentence.

     (c) Any certificates for shares of the Aggregate Equity Consideration issued pursuant to this Agreement or issued subsequent to the Closing Date as a result of any transfer of such shares or any stock dividend, stock split or other recapitalization shall bear a legend or legends (and appropriate comparable notations or other arrangements will be made with respect to any uncertificated shares) referencing restrictions on transfer of such shares under the Securities Act and under this Agreement which legend shall state 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 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.

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The securities evidenced by this certificate are subject to restrictions on transfer set forth in a Transaction Agreement dated October 19, 2009 between Morgan Stanley and Invesco Ltd.”

Notwithstanding the foregoing, the holder of any certificate(s) for shares of the Aggregate Equity Consideration shall be entitled to receive from Buyer new certificates for a like number of shares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of such holder at (x) such time as such restrictions are no longer applicable, and (y) with respect to the restriction on transfer of such shares under the Securities Act, delivery of an opinion of counsel to such holder, which opinion is reasonably satisfactory in form and substance to the Buyer and its counsel, that the restriction referenced in such legend (or such notations or arrangements) is no longer required for purposes of applicable securities Law.

     Section 5.04. Standstill. (a) Subject to Section 5.04(b), from the Closing Date until the second anniversary of the Closing Date (the “Standstill Period”), Seller shall not, and shall not permit any of its Subsidiaries (or any successor to Seller, whether by merger, consolidation, share exchange or other business combination transaction), directly or indirectly, to, without Buyer’s prior written consent, (i) acquire, agree to acquire, propose or offer to acquire, or facilitate the acquisition or ownership of, any Buyer Stock, other than as provided for in this Agreement, or any other securities or assets of Buyer or any of its Subsidiaries, (ii) deposit any shares of Buyer Stock in a voting trust or similar arrangement or subject any shares of Buyer Stock to any voting agreement, pooling arrangement or similar arrangement, or grant any proxy with respect to any shares of Buyer Stock to any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) (other than Buyer or a Person specified by Buyer in a proxy card provided to Seller by or on behalf of Buyer), (iii) enter, agree to enter, propose or offer to enter into or facilitate any merger, business combination, recapitalization, restructuring, change in control transaction or other extraordinary transaction involving the Buyer or any of its Subsidiaries, (iv) make, or in any way participate or engage in, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC) to vote, or seek to advise or influence any person with respect to the voting of, any voting securities of Buyer or its Subsidiaries, (v) call, or seek to call, a meeting of the shareholders of Buyer or initiate any shareholder proposal for action by shareholders of Buyer, (vi) form, join or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of Buyer, (vii) otherwise act, alone or in concert with others, to seek to Control or influence the management or the policies of Buyer, (viii) disclose any intention, plan or arrangement prohibited by, or inconsistent with, the foregoing or (ix) advise, assist or encourage or enter into any discussions, negotiations, agreements or arrangements with any other persons in connection with the foregoing. Seller further agrees that, during the Standstill Period, neither Seller nor any of its Affiliates (nor any Person acting on behalf of or in concert with Seller or any of its Affiliates) shall, without the written consent

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of Buyer, (x) request Buyer, directly or indirectly, to amend or waive any provision of this Section 5.04(a) (including this sentence) or (y) take any action that might require Buyer to make a public announcement regarding the possibility of a business combination, merger or other type of transaction described in this Section 5.04(a) with Seller or any of its Affiliates

     (b) The restrictions contained in Section 5.04(a) shall not apply to any brokerage, investment advisory, financial advisory, anti-raid advisory, merger advisory, financing, proprietary and third party asset management, derivatives transactions, investment activities, insurance service and activities, trading, market making, underwriting, arbitrage or other similar activities conducted by Seller or any of its Affiliates in the ordinary course of their respective businesses; provided that the purpose of any such action by such parties is not to avoid the provisions of Section 5.04(a).

     Section 5.05. Non-Solicitation of Alternative Transactions. (a) Unless and until this Agreement will have been terminated in accordance with its terms, Seller shall not, and Seller shall cause its Affiliates not to, and shall cause its and its Affiliates’ officers, directors, employees, investment bankers, attorneys, accountants, consultants or other agents or advisors not to, directly or indirectly, (i) solicit, initiate or take any action to facilitate or encourage the submission of any proposal to acquire or purchase any capital stock of, or merger consolidation, combination, sale of assets, reorganization or similar transaction involving the Transferred Entities or the Van Kampen Business, (ii) enter into or participate in any discussions or negotiations with or authorize any financial advisor or other Person to solicit or participate in discussions or negotiations with, furnish any non-public information relating to the Van Kampen Business (other than as to the existence of these provisions) or afford access to the business, employees, properties, assets, books or records of the Van Kampen Business to, otherwise knowingly cooperate in any way with, or knowingly assist, participate in, facilitate or encourage any effort by any Person other than Buyer and its Affiliates to make such a proposal, (iii) enter into any agreement with any party other than the Buyer and its Affiliates with respect to such a proposal, or (iv) authorize any of the foregoing actions.

     (b) Seller shall, and shall cause its Affiliates, to immediately terminate and cause to be terminated any and all existing discussions or negotiations with any Persons (other than Buyer and its Affiliates) conducted heretofore with respect to any of the foregoing actions described in Section 5.04(a). Seller shall, and shall cause its Affiliates to, enforce their respective rights under, and shall not, release any third party from, the confidentiality and standstill provisions of any agreement to which Seller or its Affiliates is a party with respect to a potential sale of capital stock of, or merger, consolidation, combination, sale of assets, reorganization or similar transaction involving the Transferred Entities or the Van Kampen Business and shall promptly take all steps necessary to terminate any approval that may have been heretofore given under any such provisions authorizing any such third party to make any proposal regarding the foregoing.

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     Section 5.06. Resignations. On or prior to the Closing Date, Seller will deliver to Buyer the resignations (with effect as of Closing) from their positions with any Transferred Entity of all officers of any Transferred Entity who will be employed by Seller or any of its Affiliates after the Closing Date.

     Section 5.07. Non-Solicit. (a) In order to induce Buyer to enter into the transactions contemplated by this Agreement, Seller hereby covenants and agrees that from the date hereof until the second anniversary of the Closing Date, it will not, and it shall cause its Subsidiaries not to, directly or indirectly, solicit (including through internal job postings) or hire, or assist in the hiring of, or otherwise engage or assist in engaging any employee of the Van Kampen Business as of the Closing Date; provided that, solely with respect to the two-year period after the Closing Date (and not the period prior thereto) general, non-targeted advertising (other than through internal job postings) or the use of an independent search firm that contacts employees of the Van Kampen Business without direction or advice by Seller or its Subsidiaries shall not be deemed to be direct or indirect solicitations, and any person not solicited in violation hereof may be hired by Seller; provided further that, during such two-year period, notwithstanding the foregoing proviso, in no event shall Seller or its Subsidiaries hire (i) any Executive Director of any Transferred Entity or the Van Kampen Business who provides distribution services or (ii) any managing director of any Transferred Entity or the Van Kampen Business. The foregoing prohibition shall not apply to any employee whose employment has been terminated by a Transferred Entity, Buyer or any of their respective Affiliates after the Closing.

     (b) It is the intent of the parties to this Agreement that the provisions of this Section 5.07 shall be enforced to the fullest extent permissible under the Laws and public policies applied in each jurisdiction in which enforcement is sought. If any particular provision or portion of this Section 5.07 shall be adjudicated to be invalid or unenforceable, such provision or portion thereof shall be deemed amended to the minimum extent necessary to render such provision or portion valid and enforceable, such amendment to apply only with respect to the operation of such provision or portion in the particular jurisdiction in which such adjudication is made.

     (c) The parties acknowledge that damages and remedies at Law for any breach of this Section 5.07 would be inadequate and that Buyer shall be entitled to specific performance and other equitable remedies (including an injunction) and such other relief as a court or tribunal may deem appropriate in addition to any other remedies Buyer may have in the event of a breach of this Section 5.07.

     Section 5.08. Regulatory Capital; Other Cash in the Business. (a) Seller shall take such actions as may be required to ensure that, as of the Closing, and after taking into consideration any dividends or distributions by the Transferred Entities and any settlement of intercompany arrangements, the Broker-Dealer has stockholder’s equity equal to at least $46 million (and such other cash and cash

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equivalents as may be required under Section 5.08(c) and referred to in the last sentence thereof).

     (b) In furtherance and not in limitation of the foregoing, Seller shall identify those current assets and current liabilities of the Transferred Entities that can be validly assigned and assumed at the Closing by it or one of its Subsidiaries, and, subject to Buyer’s agreement as to the current assets being assigned and current liabilities being assumed, Seller and the Transferred Entities shall effect such transaction at the Closing pursuant to an assignment and assumption agreement that is in form and substance acceptable to both Seller and Buyer; provided that the parties understand and agree that the asset described on Section 5.08(b) of the Seller Disclosure Schedule shall be transferred to Seller or an Affiliate of Seller pursuant to this Section, including the long-term portion thereof (and these items will be excluded for purposes of the calculations required by clauses (iv) and (v) of Section 5.08(c)). Seller and Buyer shall cooperate and use their respective reasonable best efforts to reach agreement on mechanisms to effect an assignment and assumption of all current assets and current liabilities of the Transferred Entities as of the Closing Date (subject to any regulatory restrictions in relation to the Broker-Dealer).

     (c) Seller shall take such actions as may be required to ensure that, as of the Closing, and after taking into account any dividends or distributions by the Transferred Entities, any settlement of intercompany arrangements, accounts and balances pursuant to Section 7.04 and any assignment of current assets and assumption of current liabilities of the Transferred Entities by Seller or a Subsidiary of Seller that may be effected pursuant to Section 5.08(b), the Transferred Entities hold cash and cash equivalents (except to the extent this calculation results in a negative number) in an amount that is at least equal to (i) $28,000,000 plus (ii) the 2009 Deferred Compensation Amount plus (iii) the 2010 Compensation Accrual plus (iv) an amount equal to the excess (if any) of the current liabilities of the Van Kampen Business reflected on the Closing Balance Sheet over the current assets of the Van Kampen Business reflected on the Closing Balance Sheet (excluding, in the case of this calculation, the entire current portion (if any) of the 2009 Deferred Compensation Amount and the 2010 Compensation Accrual) minus (v) an amount equal to the excess (if any) of the current assets of the Van Kampen Business reflected on the Closing Balance Sheet over the current liabilities of the Van Kampen Business reflected on the Closing Balance Sheet (excluding, in the case of this calculation, the entire current portion (if any) of the 2009 Deferred Compensation Amount and the 2010 Compensation Accrual) plus (vi) an amount equal to the excess (if any) of the long term liabilities of the Van Kampen Business reflected on the Closing Balance Sheet constituting compensation, retirement and/or benefits expenses for the Transferred Employees over the long term liabilities of the Van Kampen Business reflected on the Balance Sheet constituting compensation, retirement and/or benefits expenses for the Transferred Employees (excluding, in the case of this calculation, the entire long-term portion of the 2009 Deferred Compensation Amount and the 2010 Compensation Accrual) but only to the extent such excess

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results from such long term liabilities of which Seller was aware as of the date hereof and which would have been required to be reflected on a balance sheet prepared as of the date hereof in accordance with GAAP; provided that, when calculating the amount of cash and cash equivalents that are required to be held by the Transferred Entities under this Section 5.08(c) (or paid to Seller pursuant to the next sentence), all calculations with respect to the Closing Balance Sheet shall exclude (1) all cash or cash equivalents required to be retained by the Van Kampen Business pursuant to Section 5.08(a) or this Section 5.08(c), (2) all Tax assets and liabilities (including deferred Tax assets and liabilities) and (3) the Van Kampen Seed Capital and the Deferred Assets. Further, if the calculation required by the prior sentence results in a negative number, then Buyer shall make a payment in that amount to Seller at Closing. For all purposes of this Section 5.08(c), the term “Transferred Entities” shall not include the Broker Dealer, except that, in partial satisfaction of its obligations under this Section 5.08(c), Seller shall be entitled to leave cash and cash equivalents with the Broker-Dealer in an aggregate amount that is equal to the portions of the 2009 Deferred Compensation Amount and the 2010 Compensation Accrual (as determined in accordance with this Section 5.08 and the definitions thereof) that have accrued on the balance sheet of the Broker-Dealer in respect thereof as the date of the Closing Balance Sheet.

     (d) For purposes of the Closing, references above to Closing Balance Sheet shall be deemed references to the Estimated Closing Balance Sheet. Promptly following the finalization of the Closing Balance Sheet pursuant to Section 5.08(e), the cash amount required to be held by the Transferred Entities (or paid to Seller) under Section 5.08(c) shall be re-calculated based on the Closing Balance Sheet. If the cash amount as so re-calculated would result in a greater cash amount being required hereunder to be held by the Transferred Entities, Seller shall promptly pay such difference to Buyer. If the cash amount as so re-calculated would result in a lesser cash amount being required hereunder to be held by the Transferred Entities, Buyer shall promptly pay such difference to Seller. If a payment was made to Seller pursuant to the terms of Section 5.08(c), then payments will be similarly made to Buyer or Seller, as appropriate, based on any such re-calculation. Any payment pursuant to this Section 5.08(d) shall be made at a mutually convenient time and place within 10 days after the finalization of the Closing Balance Sheet, by delivery by Buyer or Seller, as the case may be, in immediately available funds by wire transfer to an account of such receiving party with a bank designated by such receiving party. The amount of any payment to be made pursuant to this Section shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the Treasury Rate. As used herein, “Treasury Rate” shall mean the applicable interest rate payable on United States Treasury obligations with a maturity date most closely corresponding to the applicable payment period, as of the end of such period. Such interest shall be payable at the same time and in the same manner as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.

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     (e) In connection with the foregoing:

     (i) Not later than five Business Days prior to the Closing Date, Seller shall cause to be prepared and delivered to Buyer an estimated combined balance sheet of the Van Kampen Business prepared on a basis that the Closing was effective as of the month end prior to the Closing Date (or, in the event the Closing Date is expected to occur in the first five days of a month, the preceding month end) (the “Estimated Closing Balance Sheet”). The Estimated Closing Balance Sheet shall be prepared in the same manner as the Closing Balance Sheet, except for the date of such balance sheet and except that the resolution provisions of this Section 5.08(e) shall not apply thereto.

     (ii) As promptly as practicable, but no later than 45 days, after the Closing Date, Seller will cause to be prepared and delivered to Buyer the combined balance sheet of the Van Kampen Business prepared on a basis that the Closing was effective as of 11:59 p.m., New York City time on the day immediately prior to the Closing Date (the “Closing Balance Sheet”). The Closing Balance Sheet shall present the combined financial position of the Van Kampen Business (for the avoidance of doubt, including the Purchased Assets and Assumed Liabilities) and be prepared on a basis consistent with the Balance Sheet (except excluding the Broker-Dealer) as of 11:59 p.m. on the date immediately preceding the Closing Date which shall, for the avoidance of doubt, include an accrual for the 2009 Deferred Compensation Amount and the 2010 Compensation Accrual. Attached as Section 5.08(e) of the Seller Disclosure Schedule for illustrative purposes only is a draft Closing Balance Sheet created as if the Closing had occurred as of 11:59 p.m. on June 30, 2009, and calculating the cash amount required to be held by the Transferred Entities under Section 5.08(c) (or paid to Seller) had the Closing occurred on that date.

     (iii) If Buyer disagrees with the Closing Balance Sheet delivered pursuant to Section 5.08(e)(ii), Buyer may, within 30 days after delivery of such Closing Balance Sheet and any related documents that Seller reasonably requests in connection with its review of the Closing Balance Sheet, deliver a notice to Seller disagreeing therewith. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet.

     (iv) If a notice of disagreement shall be delivered pursuant to Section 5.08(e)(iii), Buyer and Seller shall, during the 30 days following such delivery, use their reasonable best efforts to reach agreement on the disputed items or amounts in order to finalize the Closing Balance Sheet. If, during such period, Buyer and Seller are unable to reach such agreement, they shall promptly thereafter cause independent accountants of nationally recognized standing reasonably satisfactory to Buyer and

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Seller (who shall not have any material relationship with Buyer, Seller or any of their respective Affiliates) (the “Accounting Referee”), promptly to review this Agreement and the remaining disputed items or amounts for the purpose of finalizing the Closing Balance Sheet. In making such calculation, the Accounting Referee shall consider only those items or amounts in the Closing Balance Sheet as to which Buyer has disagreed. The Accounting Referee shall deliver to Buyer and Seller, as promptly as practicable (but in all events no later than 45 days after the matter is referred to the Accounting Referee), a report setting forth the final Closing Balance Sheet. Such report shall be final and binding upon Buyer, Seller and their respective Affiliates and such final Closing Balance Sheet shall be used to calculate the cash amount required to be held by the Transferred Entities under Section 5.08(b) (or paid to Seller). The cost of such review and report shall be borne by Seller and by Buyer in proportion to the relative differences between the resulting calculations of the cash amount required to be held by the Transferred Entities (or paid to Seller) under Section 5.08(b) by virtue of the Closing Balance Sheet as first proposed by Seller pursuant to Section 5.08(e)(ii) and as proposed to be revised by Buyer pursuant to Section 5.08(e)(iii).

     (v) Buyer and Seller agree that they will, and agree to cause their respective Affiliates and independent accountants to cooperate and assist in the preparation of the Closing Balance Sheet and in the conduct of the reviews referred to in this Section 5.08(e), including the making available to the extent necessary of books, records, work papers and personnel.

     (f) For the avoidance of doubt, the calculations to be made pursuant to this Section 5.08, and the net purchase price adjustment to be made pursuant to Section 5.08, are not intended to provide an alternate remedy to Article 11 for any breach or alleged breach of the Seller’s representations and warranties made pursuant to Article 3.

     Section 5.09. Trademarks; Tradenames. Except as otherwise set forth in the IP Matters Agreement, after the Closing, Seller and its Affiliates (other than the Transferred Entities) shall not use (i) any of the Trademarks or Internet domain names owned by one or more of the Transferred Entities or included in the Purchased Assets, including those set forth on Section 3.16(b) or (ii) the “Van Kampen” name or any derivatives thereof.

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ARTICLE 6
Covenants of Buyer

     Buyer agrees that:

     Section 6.01. Conduct of Business of Buyer. (a) From the date of this Agreement to and through the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, except (i) as set forth in Section 6.01 of the Buyer Disclosure Schedule, (ii) as otherwise expressly contemplated by this Agreement, (iii) as required by any applicable Law or (iv) as Seller shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Buyer shall, and shall cause its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice in all material respects.

     (b) Without limiting the generality of Section 6.01(a), from the date of this Agreement to and through the earlier of the Closing and the termination of this Agreement in accordance with its terms, except (i) as set forth in Section 6.01 of the Buyer Disclosure Schedule, (ii) as otherwise expressly contemplated by this Agreement, (iii) as required by any applicable Law or (iv) as Seller shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Buyer shall not, and shall cause its Subsidiaries not to, do any of the following:

     (A) other than common stock dividends not in excess of $0.15 per share per quarter, and other than as required by the terms of any preferred security, make any distribution (whether in cash, stock, Equity Rights or property, but not including any distribution that results in an adjustment under Section 2.09) or declare, pay or set aside any dividend with respect to, or purchase or otherwise acquire directly, or indirectly, any equity interest or shares of capital stock of Buyer;

     (B) amend in any material respect any provision of Buyer’s Organizational Documents in a manner that would adversely affect the benefits, economic or otherwise, of the transactions contemplated by this Agreement to Seller;

     (C) merge or consolidate with any Person or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, but (other than with respect to a liquidation or dissolution) only to the extent any such action or actions would be reasonably expected to prevent, materially delay or impair the consummation of the transactions contemplated hereunder;

     (D) enter into any acquisition agreement, or make any acquisition, that would be reasonably expected to prevent, materially

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delay or impair the consummation of the transactions contemplated hereunder;

     (E) take any action that, if taken after the Closing without Seller’s consent, would constitute a breach of Section 7.15(a) (it being understood that, for purposes of this Section 6.01(b)(iv)(E), Seller may withhold, condition or delay its consent in its sole discretion); or

     (F) authorize or enter into any Contract or commitment with respect to any of the foregoing.

     Section 6.02. Access to Information. (a) From the date hereof until the Closing Date, Buyer will (1) give Seller, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, personnel, books and records of Buyer and its Subsidiaries, (2) furnish to Seller, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to Buyer and its Subsidiaries as such Persons may reasonably request and (3) instruct the employees, counsel and financial advisors of Buyer and its Subsidiaries to cooperate with Seller in its investigation of Buyer and its Subsidiaries. Any investigation pursuant to this Section 6.02(a) shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Buyer and its Subsidiaries. No information or knowledge obtained in any investigation pursuant to this Section 6.02(a) shall affect or be deemed to modify any representation or warranty made by any party hereunder.

     (b) From and after the Closing Date, upon reasonable notice and subject to applicable Laws relating to the exchange of information, Buyer will promptly provide Seller and its agents reasonable access to its books of account, financial and other records (including accountant’s work papers), information, employees and auditors to the extent reasonably necessary to permit Seller to determine any matter relating to its rights and obligations hereunder or to any period ending on or before the Closing Date; provided that any such access by Seller shall not unreasonably interfere with the conduct of the business of Buyer. No information or knowledge obtained in any investigation pursuant to this Section 6.02 shall affect or be deemed to modify any representation or warranty made by any party hereunder. Notwithstanding the foregoing, Seller shall not have access to (i) materials entitled to legal privilege (or which could jeopardize the attorney-client privilege of Buyer or its Affiliates), (ii) personnel records of Buyer or its Subsidiaries relating to individual performance or evaluation records, medical histories or other information which in Buyer’s good faith opinion is sensitive or the disclosure of which could subject Buyer or its Subsidiaries to risk of liability or (iii) other information which in Buyer’s good faith opinion could reasonably be expected to subject Buyer or its Subsidiaries to liability. The parties shall endeavor in good faith to make appropriate substitute disclosure arrangements, if practicable, in a manner that does not give rise to any of the circumstances referred to in the preceding sentence.

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     Section 6.03. Trademarks; Tradenames. Except as otherwise set forth in the IP Matters Agreement, after the Closing, Buyer and its Affiliates shall not, and shall not permit any Transferred Entity or the Van Kampen Business to, use any of Seller’s or its Affiliates’ marks or names, including the marks and names set forth on Section 6.03 of the Seller Disclosure Schedule.

     Section 6.04. Use of Confidential Information. For the avoidance of doubt, after the Closing, Buyer and its Affiliates shall have no right to use or disclose any confidential information, data or other materials of Seller or its Affiliates (including any such information disclosed to Buyer prior to the date of this Agreement for the purposes of evaluating the transactions contemplated hereby), other than any such information, data or materials included in the Purchased Assets or owned by the Transferred Entities (which the parties agree shall include all information relating to the historical, current and prospective Van Kampen Business) except as set forth in Section 7.13(c), and Buyer shall use reasonable efforts to, and to cause its Affiliates to use reasonable efforts to, return to Seller or destroy all such information, data and materials in its possession promptly after the Closing.

     Section 6.05. Stock Exchange Listing. Buyer shall use its reasonable best efforts to cause the shares of Buyer Stock representing the Aggregate Equity Consideration to be listed on the NYSE on or prior to the Closing Date, subject to official notice of issuance.

     Section 6.06. Shelf Registration. (a) Not later than the first Business Day following the Closing Date, but subject to delay for any Scheduled Black-Out Period (in which case within one Business Day after the lapse thereof) or as set forth in Section 6.06(c) (in which case as soon as possible after the lapse of such postponement or suspension in accordance with the terms thereof), Buyer shall file with the SEC either (i) a Shelf Registration Statement or (ii) pursuant to Rule 424(b) under the Securities Act, a prospectus supplement that shall be deemed to be part of an existing Shelf Registration Statement in accordance with Rule 430B under the Securities Act, in each case relating to the offer and sale of all of the Registrable Securities by Seller from time to time in accordance with the methods of distribution elected by Seller and set forth in the Shelf Registration Statement and shall, if such Shelf Registration Statement is not automatically effective, use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective under the Securities Act as soon as possible after filing.

     (b) Buyer shall use its reasonable best efforts to keep such Shelf Registration Statement continuously effective under the Securities Act in order to permit the Shelf Prospectus forming a part thereof to be usable by Seller until the earlier of (i) the date as of which all Registrable Securities have been sold pursuant to the Shelf Registration Statement or another Registration Statement filed under the Securities Act (but in no event prior to any applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder), (ii) the date as of which all Registrable Securities have been sold and (iii) the second

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anniversary of the Closing (such period of effectiveness, the “Shelf Period”). After the termination of the Shelf Period, if Seller otherwise has the right to require an underwritten offering of Registrable Shares pursuant to clause (e) below, Seller shall be entitled to require Buyer to file with the SEC either a new registration statement or a prospectus supplement that forms part of an existing Shelf Registration Statement (each, a “Demand Registration Statement”) that provides for such underwritten offer and sale of Registrable Securities (and, if such Demand Registration Statement is not automatically effective, to use its reasonable best efforts to cause such Demand Registration Statement to be declared effective under the Securities Act as soon as possible after filing) on a basis otherwise consistent with the terms of this Section 6.06 relating to the Shelf Registration Statement for the offer and sale of Registrable Securities. Seller shall notify Buyer in writing of the date that all of its Registrable Securities have been sold. Buyer shall not be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the Shelf Period if Buyer voluntarily takes any action or omits to take any action that would result in Seller thereby not being able to offer and sell any Registrable Securities pursuant to such Shelf Registration Statement during the Shelf Period, unless such action or omission is required by applicable Law and except as set forth in Section 6.06(c). Buyer shall use its reasonable best efforts to remain a “well-known seasoned issuer” (as defined in Rule 405 under the Securities Act) and to not become an “ineligible issuer” (as defined in Rule 405 under the Securities Act) during the Shelf Period.

     (c) Buyer shall be entitled to postpone (but not more than 2 times in any calendar year) the filing or initial effectiveness of, or suspend the use of, a Shelf Registration Statement or any Demand Registration Statement if Buyer delivers to Seller a certificate signed by both the Chief Executive Officer and Chief Financial Officer of Buyer certifying that, in the good faith judgment of Buyer, such registration, offering or use would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of Buyer or any material transaction under consideration by Buyer or would require the disclosure of information that has not been, and is not otherwise required to be, disclosed to the public, the premature disclosure of which would materially and adversely affect Buyer. No such postponement or suspension shall exceed 60 consecutive days, no subsequent such postponement or suspension shall commence fewer than 15 days following the expiration of any preceding period, and the aggregate of all such postponements or suspensions shall not exceed 90 days in any 360-day period.

     (d) Buyer shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as Seller may reasonably request, all to the extent required from time to time to enable Seller to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 or 144A or Regulation S under the Securities Act, as such Rules may be amended

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from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of Seller, Buyer will deliver to Seller a written statement as to whether it has complied with such requirements and, if not, the specifics thereof.

     (e) In connection with any underwritten offering effected under the Shelf Registration Statement or any Demand Registration Statement (it being understood that no more than three underwritten offerings may be effected, no such offering shall be conducted for securities aggregating less than $100 million in value and no such underwritten offering shall take place during a Scheduled Black-Out Period), (i) Buyer shall be obligated (A) to pay all registration and other offering-related expenses of Buyer (including fees and expenses of its counsel (who shall deliver customary opinions, such as a 10b-5 opinion to Buyer and Seller), SEC filing fees and fees and expenses of Buyer’s auditors (who shall prepare a customary comfort letter), but not including any fees or expenses of Seller (including its counsel and underwriting discounts)) and (B) Buyer (and Seller, to the extent applicable) shall be obligated to enter into customary underwriting and indemnification agreements in connection with the offering, including standard indemnification and contribution rights in favor of the underwriters and Seller as the registering holder with respect to the Shelf Registration Statement or any Demand Registration Statement, Shelf Prospectus and disclosure package; (ii) at Seller’s reasonable request, Buyer shall cause its senior executives to participate, at Seller’s expense, in customary investor presentations and “road shows” for a maximum of 3 days of marketing per offering (to be scheduled in a collaborative manner so as not to unreasonably interfere with the conduct of the business of Buyer; and (iii) at Seller’s request, Seller (or an Affiliate designated by Seller) shall act as sole book-runner in any such underwritten offering, and any other underwriters shall be selected by Seller subject to Buyer’s consent (which shall not be unreasonably withheld).

     Section 6.07. Equivalent Buyer Preferred Stock. As promptly as practicable after the date hereof, Buyer shall take all actions necessary to authorize the issuance of the Equivalent Buyer Preferred Stock, including obtaining any necessary approval of the board of directors of Buyer and the filing of appropriate documentation as required by the Laws of Bermuda. Seller will be afforded a reasonable opportunity to review and comment on such documentation.

ARTICLE 7
Covenants of Buyer and Seller

     Buyer and Seller agree that:

     Section 7.01. Reasonable Best Efforts; Further Assurances. (a) Subject to the terms and conditions of this Agreement, Buyer and Seller will use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable Law to

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consummate the transactions contemplated by this Agreement. Seller and Buyer agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement. Such actions shall include (i) preparing and filing as promptly as reasonably practicable all documentation to effect all necessary notices, reports, and other filings and to obtain as promptly as reasonably practicable all consents, registrations, approvals, waivers, orders, exemptions, Permits and authorizations necessary or advisable to be obtained from any third party or Government Entity in order to consummate the transactions contemplated by this Agreement and (ii) taking all actions reasonably necessary in order to comply with or satisfy the requirements of any applicable Law or other requirements of any Government Entity that would prevent the consummation of the transactions contemplated by this Agreement.

     (b) In furtherance and not in limitation of the foregoing, each of Buyer and Seller shall make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable.

     (c) Seller and Buyer shall cooperate with each other in connection with the making of all such filings. Seller and Buyer shall use their respective reasonable best efforts to furnish to each other all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable Law in connection with the transactions contemplated by this Agreement. Neither Seller nor Buyer may participate or agree to participate in any substantive meeting, telephone call or discussion with any Government Entity in connection with the filings required under the HSR Act in connection with the transactions contemplated by this Agreement unless it consults with the other party in advance (to the extent not prohibited by such Government Entity) and, to the extent not prohibited by such Government Entity, gives the other party the opportunity to attend such meeting, telephone call or discussion. The parties hereto will consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to the other parties in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to any Antitrust Law. Notwithstanding the foregoing, Seller and Buyer may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other under this Section 7.01(c) as “Antitrust Counsel Only Material.” Such materials and the information contained therein shall be given only to the outside antitrust counsel of the recipient and will not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express

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permission is obtained in advance from the source of the materials (Buyer or Seller, as the case may be) or its legal counsel.

     Section 7.02. Certain Filings. Seller and Buyer shall cooperate with one another (i) in determining whether any action by or in respect of, or filing with, any Government Entity is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material Contracts, in connection with the consummation of the transactions contemplated by this Agreement and (ii) in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers.

     Section 7.03. Public Announcements. The parties agree to consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press releases and public announcements the making of which may be required by applicable Law or any listing agreement with any national securities exchange, will not issue any such press release or make any such public statement prior to such consultation.

     Section 7.04. Intercompany Accounts and Agreements. All intercompany accounts between the Seller or its Affiliates, on the one hand, and the Van Kampen Business, on the other hand, as of the Closing shall be settled (irrespective of the terms of payment of such intercompany accounts) in the manner provided in this Section 7.04. At least two Business Days prior to the Closing, Seller shall prepare and deliver to Buyer a statement setting out in reasonable detail the calculation of all such intercompany account balances based upon the latest available financial information as of such date and, to the extent requested by Buyer, provide Buyer with supporting documentation to verify the underlying intercompany charges and transactions. All such intercompany account balances, and any balances arising after such calculation but on or before the Closing, shall be paid in full on or prior to the Closing. Except (i) to the extent necessary for the provision of any services as contemplated in any Ancillary Agreement, (ii) as set forth on Section 7.04 of the Seller Disclosure Schedule or (iii) as otherwise mutually agreed in writing by Seller and Buyer, all Contracts between Seller or its Affiliates, on the one hand, and the Van Kampen Business, on the other hand, are hereby terminated effective as of the Closing and without further liability or obligation (contingent or otherwise) thereunder.

     Section 7.05. Fund and Advisory Client Consents.

     (a) Generally.

     (i) Subject to the specific requirements of Section 7.05(b) through Section 7.05(e), Seller agrees to use, and to cause each of its Affiliates to use, its reasonable best efforts to obtain the consents and approvals necessary to satisfy prior to the Closing Date the Assignment

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Requirements with respect to each Existing Advisory Contract. Buyer agrees to use and to cause each of its Subsidiaries to use its reasonable best efforts to cooperate with Seller and its Affiliates in their efforts so to satisfy the Assignment Requirements with respect to each Existing Advisory Contract (and to obtain the “interim” new advisory contracts described in Section 7.05(b)(i)(B)). In the event that any such Assignment Requirements are not satisfied on or prior to the Closing Date, following the Closing Date, Buyer and Seller shall use (and shall cause their respective Affiliates to use) their respective reasonable best efforts to satisfy such Assignment Requirements as soon as practicable and in any event within 180 days after the Closing Date. For any Contingent Account (as determined under clause (a)(ii) or (iii) of such definition) that exists at the Closing Measurement Date, Buyer shall use its reasonable best efforts to cause such Contingent Account not to terminate the applicable Existing Advisory Contract prior to the end of the True-Up Period. In the case of (i) Funds (in or outside the United States) whose Assignment Requirements are to be satisfied by Fund Mergers and (ii) Clients (in or outside the United States) whose Assignment Requirements are to be satisfied through the assignment of their Existing Advisory Contracts to an affiliate of Buyer, or the replacement of their Existing Advisory Contracts with a New Advisory Contract with an affiliate of Buyer (including through Closed-End Fund Assignment Arrangements or Client Assignment Arrangements), Buyer shall, on a timely basis, use its commercially reasonable best efforts to ensure that (a) with respect to the Funds described in clause (i), the respective Buyer Funds and the requisite investment advisers and other service providers thereto are in each case properly organized and have the requisite regulatory approvals and registrations to enable the Fund Mergers to occur by Closing and (b) with respect to the Clients described in clause (ii), the affiliates of Buyer proposed to be assignees of such Existing Advisory Contracts, or to be parties to such New Advisory Contracts, have in each case the requisite regulatory approvals and registrations to permit such assignments or contract replacements to occur by Closing.

     (ii) Each of Buyer and Seller agrees to provide promptly in writing all information concerning itself and its Affiliates required to be included in the proxy solicitation, or other consent solicitation, materials or government filings contemplated by this Section 7.05 (including the information required for the ‘40 Act Management Funds’ proxy statements or the Fund Merger Proxy Statement/Prospectuses under the Exchange Act or the Investment Company Act or under other applicable Laws). Each of Buyer and Seller agrees promptly to correct such information if and to the extent that such information becomes false or misleading in any material respect.

     (iii) From and after the date hereof and until the end of the True-Up Period, Seller and Buyer shall communicate on a regular basis to

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stay apprised of such efforts to satisfy the Assignment Requirements and, upon Buyer’s reasonable request, Seller shall make available to Buyer copies of all executed client consents and other documents evidencing satisfaction of applicable Assignment Requirements.

     (iv) Subject to Section 13.03, notwithstanding anything herein to the contrary, none of Seller, Buyer or any of their respective Affiliates shall have any obligation under this Agreement to pay any money or other consideration beyond a de minimis review charge to any Person that is a party to an Existing Advisory Contract or to initiate any claim or proceeding against any such Person in order to obtain any consent, approval or New Advisory Contract necessary to satisfy any Assignment Requirement.

     (v) With respect to each Client, and subject to the specific requirements of Section 7.05(a)(v)(A) and Section 7.05(a)(v)(B), the parties shall cooperate to make reasonable and appropriate arrangements for the continued provision of investment management services to such Client by the respective Van Kampen Business portfolio management team (provided such team is intended to transfer to Buyer pursuant to the transactions contemplated hereby (any such team, a “Transferring Team”)) from the Closing Date until the end of the True-Up Period (or such other date as the parties may agree), including pursuant to a Temporary Investment Services Agreement. To the fullest extent permitted by Law, in respect of any services provided under a Temporary Investment Services Agreement (including pursuant to Section 7.05(b)(i)(B)) by a party hereto (or an Affiliate), the other party hereto shall, in a timely manner, reimburse (or cause to be reimbursed) such party (or such Affiliate) for its “Service Costs” (as defined in the Transition Services Agreement; except that for this purpose, (x) “Provider” as used therein will be deemed to mean such party or such Affiliate providing the services under such Temporary Investment Services Agreement and (y) “Services” as used therein will mean the services provided under such Temporary Investment Services Agreement) in providing such services; provided, however, that this sentence shall not apply to any fees or “Service Costs” payable in respect of an “interim” new advisory contract entered into pursuant to Rule 15a-4 under the Investment Company Act if such application would result in a violation of Law.

     (A) With respect to each Client (other than a Non-Consenting Morgan Stanley Client) whose Transferring Team has not converted to Buyer’s front-office and middle-office platform (i.e., the Charles River system and similar portfolio management or trading systems) and become employees of Buyer (or a Subsidiary of Buyer) by the Closing (or, if later in the case of such a Morgan Stanley-Branded Transferred Client, the date such Client satisfies the respective Assignment Requirements), such

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Transferring Team shall (to the extent permitted by Law) provide investment management services to such Client through a Subsidiary of Seller pursuant to a Temporary Investment Services Agreement from Closing until the earlier of (i) the date of such conversion and employment of such Transferring Team and (ii) the end of the True-Up Period (or such earlier time as may be required by law, including Rule 15a-4 under the Investment Company Act). Nothing in this Section 7.05(a)(v)(A) shall be construed to mean that either Buyer or Seller (or any Fund) is required to seek any approval from the interest holders of a Fund other than in connection with the consent solicitation process otherwise provided for in this Section 7.05.

     (B) With respect to each Morgan Stanley-Branded Transferred Client that has not satisfied the respective Assignment Requirements as of the Closing Date (a “Non-Consenting Morgan Stanley Client”), the parties shall cooperate to make reasonable and appropriate arrangements for the continued provision of investment management services to such Client by the respective Transferring Team (notwithstanding that, at the Closing Date, such team may transfer to Buyer) until the end of the Delegation Period. Without limiting the generality of the foregoing, except in the case of ‘40 Act Management Funds (for which provision in this regard is made by Section 7.05(b)(i)(B)), the parties shall, in a timely manner, take the actions reasonably necessary, and in accordance with the requirements of Law, to permit Buyer (or its Affiliates) and Seller (or its Affiliates) each to act, pursuant to a Temporary Investment Services Agreement, as delegated investment manager, or as sub-advisor or in a similar capacity (any such arrangement, a “Delegation Arrangement”) with respect to a Non-Consenting Morgan Stanley Client during the Delegation Period to the extent reasonably necessary or convenient to permit the respective Transferring Team to continue to provide investment management services with respect to such Client, including to the extent required (i) by notifying such Client (and, in the case of a Fund, the interest holders thereof) of such Delegation Arrangements as part of the consent solicitation process provided for in this Section 7.05 and (ii) prior to Closing, making any necessary regulatory filings and obtaining necessary regulatory approvals to reflect and implement such Delegation Arrangements. Nothing in this Section 7.05(a)(v)(B) shall be construed to mean that either Buyer or Seller (or any Fund) is required to seek any approval from the interest holders of a Fund other than in connection with the consent solicitation process otherwise provided for in this Section 7.05.

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     (b) ‘40 Act Management Funds. With respect to each ‘40 Act Management Fund:

     (i) Seller agrees to use, and to cause each of its Affiliates to use, reasonable best efforts to obtain (A) the consents and approvals (including such approvals by the board of directors or trustees and shareholders of such ‘40 Act Management Fund) for (1) in the case of an open-end ‘40 Act Management Fund that is not a Sub-Advised Fund, a Fund Merger, (2)in the case of a closed-end ‘40 Act Management Fund that is not a Sub-Advised Fund, a Closed-End Fund Assignment Arrangement and (3) in the case of a ‘40 Act Management Fund that is a Sub-Advised Fund, a New Advisory Contract on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract in effect as of the date hereof, in each case in accordance with the requirements of applicable Law, including Section 15 of the Investment Company Act, to the extent necessary to satisfy the Assignment Requirements with respect to the Existing Advisory Contract for such ‘40 Act Management Fund and (B) all required approvals by the board of directors or trustees of such ‘40 Act Management Fund of an “interim” new advisory contract pursuant to Rule 15a-4 thereunder (but only to the extent (1) all required consents and approvals for such Fund Merger or Closed-End Fund Assignment Arrangement or New Advisory Contract (in the case of a Sub-Advised Fund), as the case may be, are not obtained prior to Closing and/or (2) necessary to implement the intent of Section 7.05(a)(v)), it being understood that with respect to such “interim” new advisory contract for each ‘40 Act Management Fund that is a Morgan Stanley-Branded Transferred Client, a Subsidiary of Seller shall be named as primary investment adviser and a Subsidiary of Buyer shall be named as sub-adviser pursuant to a Temporary Investment Services Agreement.

     (ii) Seller shall use its reasonable best efforts to cause such ‘40 Act Management Fund (to the extent shareholder consent shall be required for such Fund Merger, Closed-End Fund Assignment Arrangement or New Advisory Contract, as the case may be) to call a special meeting of the shareholders of such ‘40 Act Management Fund to be held as soon as reasonably practicable after the date of this Agreement for purposes of obtaining the requisite approval of such shareholders for such Fund Merger, Closed-End Fund Assignment Arrangement or New Advisory Contract (in the case of a Sub-Advised Fund), as the case may be. In connection therewith, (A) with respect to (1) each ‘40 Act Management Fund that is a Sub-Advised Fund (but, in the case of Sub-Advised Funds, only to the extent such shareholder approval is required by Law) or is not an open-end fund, Seller will use (or will cause an Affiliate to use) its reasonable best efforts to cause each such ‘40 Act Management Fund to prepare and to file with the SEC (to the extent such filing is required) all proxy solicitation materials necessary to comply in all material respects

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with the applicable provisions of Section 14 of the Exchange Act and Section 20 of the Investment Company Act and (2) each open-end ‘40 Act Management Fund that is not a Sub-Advised Fund, Buyer will use (or will cause an Affiliate to use) its reasonable best efforts to cause the Buyer Fund that is the party to such ‘40 Act Management Fund’s proposed Fund Merger to prepare and to file with the SEC (to the extent such filing is required) all securities registrations statements and prospectuses and proxy solicitation materials necessary to comply in all material respects with the applicable provisions of the Securities Act, Section 14 of the Exchange Act and Section 20 of the Investment Company Act, including a securities registration statement on SEC Form N-14 (or successor form thereto) containing a joint proxy statement and prospectus (a “Fund Merger Proxy Statement/Prospectus”), (B) Seller will use (or will cause an Affiliate to use) its reasonable best efforts to cause each such ‘40 Act Management Fund (1) to mail such proxy solicitation materials (including, as applicable, a Fund Merger Proxy Statement/Prospectus) to the shareholders of such ‘40 Act Management Fund as promptly as practicable after review by the SEC and (2) as soon as practicable following the mailing of such proxy solicitation materials, submit, or cause to be submitted, to the shareholders of such ‘40 Act Management Fund, for a vote at such shareholders meeting, the proposals described in the first sentence of this Section 7.05(b)(ii). For the avoidance of doubt, the Existing Advisory Contract of each Morgan Stanley-Branded Transferred Client that is a ‘40 Act Management Fund shall be assigned to Buyer or one of its subsidiaries in the event that the Assignment Requirements with respect to such Fund have not been satisfied as of Closing, which purported assignment will have the effect of terminating such Existing Advisory Contracts and thereby permit the Seller Fund board to appoint interim adviser(s) pursuant to Rule 15a-4(b)(2) of the Investment Company Act; provided that such assignment shall be effected (A) with respect to each such Morgan Stanley-Branded Transferred Client whose portfolio management team is a Transferring Team, upon Closing, with no consideration being given to the date by which such team has converted to Buyer’s front-office and middle-office platform and become employees of Buyer (or a Subsidiary of Buyer); (B) with respect to each other such Morgan Stanley-Branded Transferred Client, at Closing; and (C) at such other time as the parties may agree.

     (iii) Buyer and Seller agree that consent for any Existing Advisory Contract with a ‘40 Act Management Fund shall be deemed given for all purposes under this Agreement only if a Fund Merger, Closed-End Fund Assignment Arrangement or New Advisory Contract (in the case of a Sub-Advised Fund), as the case may be, has been approved by the board of such ‘40 Act Management Fund under Section 7.05(b)(i)(A) and by the shareholders of the applicable Fund in accordance with Section 7.05(b)(ii) and applicable Law (but, in the case of Sub-

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Advised Funds, only to the extent such shareholder approvals are required by Law).

     (c) Other Registered Funds. With respect to any Fund that is Registered with any Government Entity as an investment fund (or the equivalent) and is not a ‘40 Act Management Fund, as promptly as practicable following the date of this Agreement, to the extent required by applicable Law or the terms of any Existing Advisory Contract with such Fund, Seller shall (or shall cause an Affiliate to) (i) provide notice (the “Notice”) of the transactions contemplated by this Agreement to such Fund and, where required by applicable Law, to the investors in such Fund, and (ii) use reasonable best efforts to obtain any approval, consent or other action, if any, that is required from or by the board of directors or other comparable governing body of such Fund, the investors in such Fund or any regulating or self-regulating authority for such Fund, (A) in the case of any such Fund that is not a Japan Fund or a UIT Fund, to effect a Fund Merger, (B) in the case of a Japan Fund, to effect a Client Assignment Arrangement or (C) in the case of any such Fund that is a UIT Fund, so that, after the Closing, the Van Kampen Business may continue to provide services to such UIT Fund in accordance with such Fund’s Existing Advisory Contract or otherwise on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract in effect on the date hereof. To the extent consistent with applicable Law and SEC and FINRA pronouncements, unless affirmative approval, consent or action is required under the applicable Existing Advisory Contract, such approval, consent or other action may take the form of a so-called implied or negative consent (including such consent obtained pursuant to the process described in clause (y)(2) of the second sentence of Section 7.05(d)). For the avoidance of doubt, the parties agree that, with respect to the Existing Advisory Contract for a UIT Fund, the consent or approval of the trustee of such Fund shall be sufficient for all purposes under this Agreement.

     (d) Non-Registered Funds and Advisory Clients. With respect to any Fund that is not Registered as an investment fund (or the equivalent) with any Government Entity and with respect to any Advisory Client, as promptly as practicable following the date of this Agreement and to the extent required by applicable Law or the terms of any Existing Advisory Contract with such Fund or such Advisory Client, Seller shall (or shall cause an Affiliate to) (i) provide the Notice to such Fund or Advisory Client and (ii) use reasonable best efforts to obtain any approval, consent or other action that is required from or by such Fund (and, if applicable, its interest holders) or such Advisory Client (A) in the case of any such Client that is not a Morgan Stanley-Branded Transferred Client, so that, as applicable after the Closing, the Van Kampen Business may continue to provide services to such Fund or Advisory Client in accordance with such Fund’s or such Advisory Client’s Existing Advisory Contract or otherwise on terms substantially comparable (but having the same advisory and same aggregate non-advisory fees) to those of the applicable Existing Advisory Contract in effect on the date hereof or (B) in the case of a Morgan Stanley-Branded Transferred

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Client, to effect a Client Assignment Arrangement. Buyer and Seller agree that any consent required for any Existing Advisory Contract with a Client (other than a Fund that is Registered as an investment fund (or the equivalent) with a Government Entity) to continue after the Closing or to effect a Client Assignment Arrangement shall be deemed given for all purposes under this Agreement, (x) if written consent is required under applicable Law or the respective Existing Advisory Contract, upon receipt of the written consent requested in the Notice prior to the Closing Date, or (y) if consent other than written consent is permitted under applicable Law and the respective Existing Advisory Contract, (1) upon receipt of a written consent requested in the Notice prior to the Closing Date or (2) if no such written consent is received, if 45 days (such period expiring at least five (5) Business Days prior to the Closing Date) shall have passed since the sending of written notice (the “Negative Consent Notice”) to such Client (which Negative Consent Notice may be included in the Notice) requesting written consent as aforesaid and informing such Client, to the extent appropriate: (A) of the intention to complete the transactions contemplated hereby, which will result in an assignment or a deemed assignment, as the case may be, of such Client’s Existing Advisory Contract (or other consequences triggering a consent requirement under applicable Law in the case of such Client); (B) of the Transferred Entities’ or one of their respective Affiliates’ (or a Subsidiary of Buyer’s, as the case may be) intention to continue to provide the advisory services pursuant to the Existing Advisory Contract (or other applicable Client Assignment Arrangement) with such Client after the Closing if such Client does not terminate such agreement prior to the Closing; and (C) that the consent of such Client will be deemed to have been granted if such Client continues to accept such advisory services for a period of at least 45 days after the sending of the Negative Consent Notice without termination; provided that in any case under clause (x) or (y), no consent shall be deemed to have been given for any purpose under this Agreement if at any time prior to the Closing such Client terminates or notifies the Van Kampen Business in writing that such Client has not consented or is terminating its Existing Advisory Contract.

     (e) In connection with the consent solicitation provided for in this Section 7.05, (i) Buyer shall be provided a reasonable opportunity to review and comment on all consent materials be used by Seller or its Affiliates prior to distribution and (ii) Seller shall be provided a reasonable opportunity to review and comment on each Fund Merger Proxy Statement/Prospectus. Seller and its Affiliates shall promptly upon their receipt make available to Buyer 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 7.05.

     (f) Notwithstanding anything else contained in this Agreement, with respect to any Fund for which it is contemplated under this Agreement that the Assignment Requirement is to be satisfied by a Fund Merger involving such Fund, in the event that such Fund’s board of trustees provides the approvals required of it to proceed with the Fund Merger but the respective Buyer Fund’s

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board of trustees fails to provide the approvals required of it to proceed with the Fund Merger in a timely manner, then the parties agree that, with respect to such Fund, the transactions contemplated hereby will be executed (and the Assignment Requirement will be satisfied) without a Fund Merger by obtaining Fund board and shareholder approval under Applicable Law as necessary to permit such Fund’s Existing Advisory Contract to be replaced with a New Advisory Contract with a Subsidiary of Buyer (provided that in the case of a Morgan Stanley-Branded Transferred Client such New Advisory Contract shall provide for a Subsidiary of Seller to be named as primary investment adviser and a Subsidiary of Buyer to be named as sub-adviser).

     Section 7.06. Section 15(f). (a) Buyer acknowledges and agrees that the transactions contemplated by this Agreement are intended to qualify for the treatment described in Section 15(f) of the Investment Company Act. In this regard, Buyer shall, and from and after the Closing Date shall, to the extent within its control, cause the Van Kampen Business to comply with the conditions of Section 15(f) of the Investment Company Act in respect of each ‘40 Act Fund, including (i) by ensuring that for a period of three years after the Closing Date, at least 75% of the board of trustees or board of directors (if any), as the case may be, of such ‘40 Act Fund or any successor thereto (including by reorganization or otherwise) are not “interested persons” (as that term is defined under applicable provisions of the Investment Company Act and interpreted by the SEC) of (A) any investment adviser of such ‘40 Act Fund after the Closing or (B) the investment adviser of such ‘40 Act Fund prior to the Closing; and (ii) by not imposing or seeking to impose for a period of two years after the Closing Date, any “unfair burden” (as that term is defined in Section 15(f) of the Investment Company Act and interpreted by the SEC) on such ‘40 Act Fund.

     (b) In complying with Section 7.06(a)(i), Buyer shall, and from and after the Closing Date shall, to the extent within its control, cause the Van Kampen Business to (i) cause any employee, officer, director or agent of Buyer, any Subsidiary of Buyer or any of their respective “affiliated persons” (as that term is defined under applicable provisions of the Investment Company Act and interpreted by the SEC) who shall be a trustee or director of any ‘40 Act Fund or any successor thereto (including by reorganization or otherwise) to resign when required to maintain the percentage referred to in Section 7.06(a)(i) and (ii) ensure that vacancies on the board of trustees or board of directors, as the case may be, of any such ‘40 Act Fund or any successor thereto (including by reorganization or otherwise) will be filled by a Person who is not an “interested person” (as that term is defined under applicable provisions of the Investment Company Act and interpreted by the SEC) of such an investment adviser referred to in Section 7.06(a)(i)(A) or (B), who has been selected and proposed for election by a majority of the trustees or directors who are not such interested persons, and who has been elected by shareholders in accordance with Section 16(b) of the Investment Company Act.

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     (c) For a period of three years after the Closing Date, Buyer shall not engage, and shall use reasonable best efforts to cause its Affiliates not to engage, in any transaction that would constitute an “assignment” (as that term is defined under applicable provisions of the Investment Company Act and interpreted by the SEC) to a third party of any Investment Advisory Arrangement between Buyer or any of its Affiliates and any ‘40 Act Fund, without first obtaining from the counterparty to such transaction a covenant in all material respects comparable to that contained in this Section 7.06.

     (d) None of Buyer or any of its affiliated persons (as that term is defined under applicable provisions of the Investment Company Act and interpreted by the SEC) has, and Buyer shall ensure that no such persons have, any express or implied understanding or arrangement which would reasonably be expected to impose an “unfair burden” (as that term is defined in Section 15(f) of the Investment Company Act and interpreted by the SEC) on any ‘40 Act Fund as a result of the transactions contemplated hereby or which would in any way violate, or otherwise make unavailable to Seller, Section 15(f) of the Investment Company Act.

     Section 7.07. Certain Post-Closing Filings. Following the Closing Date, Buyer agrees to cause each Transferred Entity registered with the SEC as an investment adviser promptly to amend its Form ADV and promptly to file such amendment with the SEC and any applicable state authorities, for the purpose of disclosing information about the change in control of such Transferred Entity, and to cause any Transferred Entity that is an investment adviser or commodity trading adviser to make such similar appropriate updates to their respective registration statements or other filings with a Government Entity as may be required by the transactions contemplated by this Agreement. Following the Closing Date, Buyer agrees to, or to cause its applicable Subsidiaries to, make all necessary filings relating to the consummation of the transactions contemplated by this Agreement that may be required to be made with any applicable Government Entity.

     Section 7.08. Information for Fund Boards. With respect to each Fund, Buyer and Seller promptly shall provide to the board of directors or board of trustees of such Fund (or similar body) all information relating to such party and its Affiliates that is necessary and/or reasonably requested by such board to enable it to evaluate the terms of each applicable New Advisory Contract, agreement, or arrangement proposed, or consent requested, in connection with the transactions contemplated by this Agreement and relating to any such Fund. Buyer and Seller shall promptly provide to the other party copies of all information provided to a Fund board in accordance with this Section 7.08.

     Section 7.09. Van Kampen Seed Capital. (a) Seller shall take such actions as may be required to ensure that, as of the Closing, each Van Kampen Seeded Fund has a Van Kampen Seed Capital Closing NAV equal to at least the minimum amount of Van Kampen Seed Capital set forth opposite the name of

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each such Van Kampen Seeded Fund on Section 1.01(a) of the Seller Disclosure Schedule.

     (b) Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall, or shall cause its applicable Subsidiaries to, transfer the Van Kampen Seed Capital then owned by Seller or one of its Subsidiaries (except such Van Kampen Seed Capital as is held by the Transferred Entities) to Buyer, and Buyer shall receive the Van Kampen Seed Capital from Seller or such Subsidiaries, free and clear of any Encumbrances, for no additional consideration.

     (c) Seller shall be entitled to withdraw, or otherwise cause to be redeemed, (i) all amounts invested in any Fund or Client account (other than the Van Kampen Seeded Funds) on or before the Closing Date and (ii) all Van Kampen Seed Capital from all Van Kampen Seeded Funds on the Closing Date in excess of the amounts required to be held in each such Van Kampen Seeded Funds and transferred to Buyer pursuant to this Section 7.09.

     Section 7.10. Notices of Certain Events. Each party shall promptly notify the other party of:

     (a) any notice or other communication received by such party from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

     (b) any notice or other communication from any Government Entity received by such party in connection with the transactions contemplated by this Agreement;

     (c) any Legal Proceedings commenced relating to such party or its Affiliates that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.08 or Section 4.19 as applicable;

     (d) any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that could reasonably be expected to cause the conditions set forth in Section 10.02(b) or Section 10.03(b) not to be satisfied or that is otherwise material to Buyer or the Van Kampen Business, as the case may be; and

     (e) any failure of that party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder;

provided that the delivery of any notice pursuant to this Section 7.10 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

     Section 7.11. Alternative Transaction Structure. The parties hereto agree that if Seller delivers written notice of an election to invoke this Section 7.11

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either (i) within 90 days after the signing of this Agreement or (ii) at any time prior to Closing if the condition set forth in either Section 10.02(d) or Section 10.03(e) cannot be satisfied (in either case, an “Alternative Transaction Structure Election”), the acquisition of the Transferred Entities by Buyer from Seller shall not occur by way of the Merger, but rather shall occur through the purchase by Buyer and sale by Seller of the Van Kampen Parent common stock for the same consideration that would otherwise have constituted the Merger Consideration (the "Alternative Transaction Structure”). In the event of an Alternative Transaction Structure Election by Seller, the parties agree to enter into an amendment to this Agreement to implement such Alternative Transaction Structure; provided that such amendment shall not otherwise alter or affect the rights and obligations of the parties hereto. For avoidance of doubt, the parties hereto acknowledge and agree that (i) the purchase and sale of the Van Kampen Parent common stock pursuant to the Alternative Transaction Structure is intended to constitute a taxable sale of such stock by Seller for U.S. federal income tax purposes and (ii) no election under Section 338 of the Code (including Section 338(h)(10) of the Code) shall be made with respect to such sale.

     Section 7.12. WARN Act. Buyer and Seller shall cooperate in good faith to determine whether any notification may be required under the U.S. Worker Adjustment and Retraining Notification Act or any other worker notification Laws applicable to any Van Kampen Business Employee arising as a result of the transactions contemplated by this Agreement. Other than as provided for in Article 9 with respect to Foreign Employees who primarily work or reside in a country other than Japan or the United Kingdom, Buyer shall assume all obligations and liabilities for the provision of notice or payment in lieu of notice or any applicable penalties with respect to the Transferred Employees under such worker notification laws arising as a result of actions taken by Buyer on or after the Closing Date. Seller shall retain or assume all obligations and liabilities for the provision of notice or payment in lieu of notice or any applicable penalties with respect to the Van Kampen Business Employees under such worker notification laws arising as a result of actions taken by Seller or its Affiliates on or prior to the Closing Date. Seller (or its applicable Affiliate) shall promptly provide Buyer with such information as is reasonably requested by Buyer in order to determine whether any actions taken by Seller or its Affiliates prior to the Closing Date will, if aggregated with actions that may be taken by Buyer or its Affiliates after the Closing Date, require the provision of notice or payment in lieu of notice to the Transferred Employees.

     Section 7.13. Confidentiality. (a) Prior to the Closing Date and after any termination of this Agreement, (i) Buyer and its Affiliates will hold in confidence, pursuant and subject to the terms of the Confidentiality Agreement, all documents and information concerning the Van Kampen Business (including documents and information relating to clients, prospective clients, distributors and strategic business partners) furnished to, or prepared by, Buyer, its Affiliates or any of their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents and other representatives in connection with the transactions

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contemplated by this Agreement and the Ancillary Agreements and (ii) Seller and its Affiliates will hold in confidence, pursuant and subject to the terms of the Confidentiality Agreement, all documents and information concerning Buyer and its Affiliates (including documents and information relating to clients, prospective clients, distributors and strategic business partners) furnished to, or prepared by, Seller, its Affiliates or any of their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents and other representatives in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.

     (b) From and after the Closing, Seller shall, and shall cause its Affiliates and its and their officers, directors, employees, consultants, agents and advisors to keep confidential, and not use for its benefit (other than as may be necessary to enforce its rights hereunder, and, in the case of clause (ii) only, as used in the businesses of Seller and its Affiliates, other than the Van Kampen Business) or for the benefit of any other Person, any and all non-public information (including information obtained pursuant to Section 6.02) (i) relating to Buyer and its Affiliates that becomes known to Seller or its Affiliates or its or their officers, directors, employees, consultants, agents or advisors in connection with or as a result of the transactions contemplated by this Agreement and the Ancillary Agreements or (ii) relating to the Van Kampen Business, including its business and financial condition, that is not generally known or made available to the general public.

     (c) Notwithstanding the foregoing, if the party that receives such confidential information described under Section 7.13(b) (including information obtained pursuant to Section 6.02) or Section 6.04 (such party the “Receiving Party”) from the disclosing party (the “Disclosing Party”) is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any such information, (i) the Receiving Party will provide the Disclosing Party with prompt notice of such request so that the Disclosing Party may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of Section 7.13(b) or Section 6.04, as applicable, and, if such protective order or other remedy is not obtained, or the Disclosing Party waives compliance with the terms of Section 7.13(b) or Section 6.04, as applicable, the Receiving Party may furnish without violation of Section 7.13(b) or Section 6.04, as applicable, that portion (and only that portion) of such non-public information that the Receiving Party, in the opinion of the Receiving Party’s counsel, is legally compelled to disclose; provided that the Receiving Party exercises its reasonable best efforts, at the request and expense of the Disclosing Party, to obtain an order or other reliable assurance that confidential treatment will be accorded to the disclosed information. Non-public information for purposes of Section 7.13(b) and Section 6.04 shall not include information which (i) becomes generally available to the public other than as a result of a disclosure by the Receiving Party in breach thereof, (ii) becomes available to the Receiving Party after the Closing Date on a non-confidential basis from a source other than the

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Disclosing Party or its Affiliates, provided that such source is not known by the Receiving Party to be bound by any obligation of confidentiality to a Disclosing Party, its Affiliates or any other Person or (iii) is independently developed by the Receiving Party or others on its behalf without reference to or reliance upon any non-public information of the Disclosing Party.

     Section 7.14. Conversion. The parties will cooperate in respect of the actions contemplated by Exhibit K (the “Conversion Plan”) as promptly as practicable. The Parties acknowledge that certain aspects of the integration plan for the integration of the Van Kampen Business into Buyer’s business as of and after Closing are still being developed (including, human resources, compliance (e.g., regulatory filings, board reporting, compliance monitoring and temporary advisory agreements), finance and accounting and the Japan business), and Seller agrees to cooperate in good faith to assist Buyer in further developing its integration plan and thereby by mutual agreement amending the Conversion Plan in respect thereof. To the extent any matters contemplated in the preceding sentence may be requested by Buyer after the date hereof to constitute Services (as defined in the Transition Services Agreement) (for avoidance of doubt, which shall not include IT, legal and compliance (other than in respect of compliance and legal services to support services to be provided under any Temporary Investment Services Agreement (whether or not pursuant to Rule 15a-4 under the Investment Company Act)), operations, portfolio management, or trading), then such matters shall be mutually agreed upon within 30 days of execution of this Agreement, it being understood that Seller and its Affiliates are under no obligation to provide such Services unless so agreed upon but Seller and its Affiliates will cooperate with Buyer in good faith to determine if such Services can be performed.

     Section 7.15. Restricted Activities.

     (a) From and after the Closing until such time as Seller ceases to own, directly or indirectly, 5.0% or more (including in Seller’s ownership for purposes of this calculation only the shares of Buyer Stock and Equivalent Buyer Preferred Stock (which shall be counted on an as-converted basis) acquired hereunder) of the outstanding Buyer Stock:

     (i) [Reserved]

     (ii) neither party hereto nor its respective Affiliates shall enter into any settlement or consent with respect to a regulatory enforcement matter that would be reasonably likely to cause the other party hereto or any of its Affiliates to suffer regulatory disqualification, suspension of registration or other materially adverse regulatory consequences; and

     (iii) neither party hereto nor its respective Affiliates shall enter into any contract, arrangement, commitment or understanding (i) that limits or otherwise restricts (or purports to limit or restrict) in any material

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respect the other party hereto or its respective Affiliates from engaging or competing in any material line of business in any location or with any Person or (ii) that includes any material exclusive dealing arrangement or any other material arrangement that grants any material right of first refusal or material right of first offer or similar material right or that limits or purports to limit in any material respect the ability of such other party hereto or its Affiliates to own, operate, sell, transfer, pledge or otherwise dispose of any material assets or business.

     (b) From and after the Closing, if Buyer undertakes any action or transaction, including any repurchase of Buyer Stock, at Seller’s request, Buyer shall swap (x) a number of shares of Buyer Stock owned by Seller and its Affiliates for (y) a number of shares of Equivalent Buyer Preferred Stock that is convertible into a like number of swapped shares of Buyer Stock, to the minimum extent necessary to reduce Seller’s beneficial ownership (as defined in Rule 13d of the Exchange Act) of Buyer Stock such that it does not exceed the Common Stock Cap.

     (c) From and after the Closing until such time as the Distribution Agreement is terminated pursuant to its terms, (i) neither Seller nor its Affiliates shall undertake any action or transaction that would cause Seller’s beneficial ownership in Buyer (as determined by Seller based on its reporting and compliance policies and procedures in respect thereof and discussed with Buyer and assuming that beneficial ownership does not distinguish between voting and non-voting stock) to exceed 9.9% in vote or value (the “Seller’s Ownership Limit”) and (ii) prior to Buyer undertaking any action or transaction, including any repurchase of Buyer Stock, that would be reasonably likely to cause the Seller’s Ownership Limit to be exceeded, (x) Buyer shall provide prior written notice to Seller and (y) promptly following receipt of any such notice, Seller shall sell to Buyer, and Buyer shall purchase, at a price per share equal to the then current market price, the minimum number of shares of Buyer Stock necessary to reduce Seller’s and its Affiliate’s collective equity ownership, directly or indirectly, in Buyer to not exceed Sellers’s Ownership Limit after giving effect to such Buyer proposed action or transaction. For purposes of the foregoing “vote” shall mean the power under the equity to vote in the election of directors of Buyer (whether or not that power is retained by the equity holder, transferred to another party or surrendered) and “value” shall mean the pro rata fair market value of the equity.

     (d) Subject to the restrictions of Section 6.01, from the date hereof until the Closing, Buyer shall not undertake any action or transaction, including any repurchase of Buyer Stock, that would be reasonably likely to cause the Seller’s Ownership Limit to be exceeded as of Closing unless (i) Buyer provides prior written notice to Seller of any such action or transaction and (ii) to the extent such action or transaction would cause Seller’s Ownership Limit to be exceeded as of Closing, (A) the Aggregate Equity Consideration shall be reduced by the minimum number of shares of Buyer Stock necessary such that Seller’s

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Ownership Limit will not be exceeded as of Closing and (B) the Aggregate Cash Consideration shall be increased by an amount equal to the number of shares determined pursuant to the preceding clause (A) multiplied by the Buyer Signing Price.

     Section 7.16. Jersey City Facility. In connection with the services to be provided pursuant to the Transition Services Agreement by employees located at Seller’s facility at the Harborside Financial Center, Jersey City, New Jersey (the “Jersey City Site”) pursuant to Schedule A-1 of the Transition Services Agreement, Seller shall, on or before a date mutually agreed to by Seller and Buyer (but no later than prior to the Closing Date), physically relocate all designated employees who are employed at the Jersey City Site (and who are to provide such services) to a separate floor selected by Seller at the Jersey City Site in its existing configuration (the “Dedicated Location”), and as soon as reasonably practicable after the date hereof, Seller and Buyer shall agree on a written plan for the Dedicated Location to facilitate the provision of such services. As soon as reasonably practicable after the date hereof (and in any event no later than 90 days prior to the Closing Date), Seller shall grant Buyer access, at reasonable hours, on reasonable notice and in a manner designed to minimize disruption, to the Dedicated Location to permit Buyer to accomplish the infrastructure and IT build described therein. Buyer shall be responsible for implementing, and shall pay all out-of-pocket costs and expenses for, such infrastructure and IT build. Buyer shall, at its sole cost, restore the Dedicated Location to its condition existing before the work done as contemplated in the prior sentence, as soon as reasonably practicable after the earlier of the termination of this Agreement or the termination of such services at the Dedicated Location.

     Section 7.17. Distribution Agreement. Seller and Buyer agree that the provisions of Section 6 of the form of Distribution Agreement attached hereto shall be effective as of the date hereof, and each party shall cause its applicable Subsidiary that will be a party to the Distribution Agreement to be subject to the provisions of such Section 6; provided that, for the sake of clarity, upon any termination of this Agreement, Seller, Buyer and their respective Subsidiaries shall have no further obligations under such Section 6 after any such termination.

ARTICLE 8
Tax Matters

     Section 8.01. Termination of Tax Sharing Agreements. Any and all existing Tax sharing agreements between the Transferred Entities and any member of the Seller Group shall be terminated as of the Closing Date. After such date neither the Transferred Entities, on the one hand, or Seller and its Affiliates, on the other hand, shall have any further rights or liabilities thereunder with respect to the other party or parties. This Agreement shall be the sole Tax

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sharing agreement relating to the Transferred Entities for all Pre-Closing Tax Periods.

     Section 8.02. Seller Tax Covenants. Except as set forth on Section 8.02 of the Seller Disclosure Schedule:

     (a) From the date hereof until the Effective Time, without the consent of Buyer (such consent not to be unreasonably withheld or delayed), none of the Transferred Entities shall make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Returns or claims for material Tax refunds, enter into any material closing agreement, surrender any material Tax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if such action or omission would have the effect of increasing the Tax liability or reducing any Tax asset of the Transferred Entities.

     (b) The Transferred Entities shall establish or cause to be established in accordance with GAAP on or before the Effective Time an adequate accrual for all Taxes due with respect to any period or portion thereof ending prior to or as of the Effective Time.

     (c) Seller shall promptly pay or cause to be paid to Buyer all refunds of Taxes and interest thereon received by Seller or any Affiliate of Seller attributable to Taxes paid by Buyer or the Transferred Entities with respect to any Post-Closing Tax Period. If, in lieu of receiving any such refund, Seller or any Affiliate of Seller elects to reduce a Tax liability with respect to a Pre-Closing Tax Period or increase a Tax asset that can be carried forward to a Post-Closing Tax Period of Seller or any Affiliate of Seller, Seller shall promptly pay or cause to be paid to Buyer the amount of such refund as would otherwise have been obtained in the absence of such election.

     Section 8.03. Buyer Tax Covenants. (a) Buyer covenants that it will not cause or permit the Transferred Entities, any Subsidiary or any Affiliate of Buyer to take any action on the Closing Date other than in the ordinary course of business, including but not limited to the distribution of any dividend or the effectuation of any redemption that could give rise to any Tax liability or reduce any Tax asset of the Seller Group or give rise to any loss of the Seller or the Seller Group under this Agreement.

     (b) Buyer shall promptly pay or cause to be paid to Seller all refunds of Taxes and interest thereon received by Buyer, any Affiliate of Buyer or the Transferred Entities attributable to Taxes paid by Seller or the Transferred Entities (or any predecessor or Affiliate of Seller) with respect to any Pre-Closing Tax Period. If, in lieu of receiving any such refund, any Transferred Entity elects to reduce a Tax liability with respect to a Post-Closing Tax Period or increase a

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Tax asset that can be carried forward to a Post-Closing Tax Period, Buyer shall promptly pay or cause to be paid to Seller the amount of such refund as would otherwise have been obtained in the absence of such election.

     (c) If Seller owns at least 10% of the voting stock of Buyer during any taxable year, Buyer shall provide Seller such information as Seller may reasonably request to allow Seller to determine its eligibility for, and compute the amount of, any “deemed-paid” credit to which it may be entitled under Section 902 of the Code with respect to any distribution made by Buyer during such taxable year. Seller shall be obligated to reimburse 50% of all out-of-pocket third-party expenses incurred by Buyer in providing such information, provided that Buyer shall not be obligated to, and shall not, incur any such costs unless previously requested or approved by Seller.

     (d) Until such time as Seller has ceased to file under Section 13 of the Exchange Act, Buyer shall (i) promptly notify Seller in writing if Buyer at any time determines that there is a reasonable possibility that it is or may become a PFIC for any taxable year, and (ii) provide Seller such information as Seller may reasonably request to permit Seller to determine whether Buyer is or is reasonably likely to be a PFIC in such taxable year. Seller shall be obligated to reimburse 50% of all out-of-pocket third party expenses incurred by Buyer in providing such information, provided that Buyer shall not be obligated to, and shall not, incur any such costs unless previously requested or approved by Seller.

     (e) Until such time as Seller’s filings under Section 13 of the Exchange Act show that it has ceased to own 10% or more of Iridium’s outstanding common stock, Buyer shall promptly notify Seller in writing if Buyer becomes aware of any information that could reasonably lead to the conclusion that Buyer is or will become a “controlled foreign corporation” under Section 957 of the Code.

     (f) Buyer agrees not to take any action between the date of this Agreement and Closing that would reasonably be expected to result in Buyer failing to satisfy the “active trade or business test” with respect to the acquisition of Van Kampen set forth in Treas. Reg. Section 1.367(a)-3(c)(1)(iv). This Section 8.03(f) shall not be applicable if Seller has made an Alternative Transaction Structure Election pursuant to Section 7.11.

     (g) Buyer acknowledges that Seller will enter into a “gain recognition agreement” under Treas. Reg. Section 1.367(a)-8 (a “GRA”) with respect to the Merger. Buyer (i) shall not, and shall not permit any of its Subsidiaries to, take any actions that would result in the recognition of gain by Seller under the GRA without the prior written consent of Seller, not to be unreasonably withheld or delayed provided, however, that Buyer shall be permitted to undertake the transactions contemplated by Exhibit L, and provided further, that this clause (i) shall cease to apply upon the earlier of the end of the Seller’s fifth full taxable year following close of the taxable year in which the Closing occurs and such

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time as Seller owns less than 4% of the Aggregate Equity Consideration, and (ii) upon request by Seller, shall provide Seller at Seller’s expense with such information as Seller may reasonably require to enable Seller (x) to comply with its reporting obligations in respect of such GRA under Treas. Reg. Section 1.367(a)-8, and (y) to prepare, on behalf of Van Kampen, the statement required under Treas. Reg. Section 1.367(a)-3(c)(6), provided, that this clause (ii) shall cease to apply upon the earlier of the filing by Seller of its federal income tax return for the fifth full taxable year following the close of the taxable year in which the Closing occurs and the filing by Seller of its federal income tax return for the first taxable year in which Seller no longer owns any of the Aggregate Equity Consideration. This Section 8.03(g) shall not be applicable if Seller has made an Alternative Transaction Structure Election pursuant to Section 7.11.

     Section 8.04. Transfer Taxes. All transfer, documentary, sales, use, stamp, registration and other similar Taxes (collectively, “Transfer Taxes”) incurred in connection with transactions contemplated by this Agreement shall be borne equally by Seller on the one hand, and Buyer on the other hand. Any Tax Returns that must be filed in connection with Transfer Taxes shall be prepared by the party primarily or customarily responsible under applicable Law for filing such Tax Returns, and such party shall provide such Tax Returns to the other party at least 10 Business Days prior to the date such Tax Returns are due to be filed. Buyer and Seller shall cooperate in the timely completion and filing of all such Tax Returns.

     Section 8.05. Transferred Assets. All real property taxes, personal property taxes and similar ad valorem obligations levied with respect to the Purchased Assets for a taxable period which includes (but does not end on) the Closing Date (collectively, the “Apportioned Obligations”) shall be apportioned between Seller and Buyer based on the number of days of such taxable period included in the Pre-Closing Tax Period and the Post-Closing Tax Period. Seller shall be liable for the proportionate amount of such taxes that is attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the proportionate amount of such taxes that is attributable to the Post-Closing Tax Period. Apportioned Obligations shall be timely paid, and all applicable filings, reports and returns shall be filed, by Buyer or Seller as provided by applicable Law, provided that the paying party shall be entitled to reimbursement from the non-paying party in accordance with this Section 8.05. Upon payment of any such Apportioned Obligation, the paying party shall present a statement to the non-paying party setting forth the amount of reimbursement to which the paying party is entitled under this Section 8.05, together with such supporting evidence as is reasonably necessary to calculate the amount to be reimbursed. The non-paying party shall make such reimbursement promptly but in no event later than 10 Business Days after the presentation of such statement. Any payment not made within such time shall bear interest at the rate set forth in Section 1.01(a) for each day until paid, retroactive from the date of the presentation of such statement.

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     Section 8.06. Preparation and Filing of Tax Returns for Transferred Entities. (a) Seller shall prepare or cause to be prepared, in accordance with past practice, and timely file or cause to be timely filed, and shall pay all Taxes shown as due thereon, (i) all Tax Returns with respect to the Transferred Entities due on or prior to the Closing Date and (ii) all Tax Returns with respect to the Transferred Entities for periods ending on or before the Closing Date.

     (b) Buyer shall prepare or cause to be prepared, and shall timely file or cause to be timely filed, all other Tax Returns with respect to the Transferred Entities, and, subject to Section 8.09, shall pay all Taxes shown as due thereon; provided that as to any Tax Return for which Seller may be liable to indemnify Buyer under Section 8.09, (i) such Tax Return shall be prepared in accordance with the past practice of the Transferred Entities unless otherwise required by Law, (ii) Buyer shall deliver any such Tax Return to Seller at least 60 days before it is due, including extensions, (iii) Seller shall have the right to examine and comment on any such Tax Return prior to the filing thereof, and such Tax Return shall not be filed without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed, and (iv) Seller shall either provide such written consent or deliver a notice of objection no later than 50 days before the Tax Return is due. In the event that Buyer and Seller are unable to resolve any dispute within 25 days of the receipt by Buyer of a notice of objection from Seller, Buyer and Seller shall jointly cause the Accounting Referee to resolve the dispute. In addition to the foregoing, after the delivery by Buyer to Seller of any such Tax Return, Buyer and Seller shall work in good faith to agree on a schedule (each such schedule, a “Section 8.06(b) Schedule”) of the positions either (i) which Buyer, acting in good faith, would have taken on such Tax Return but for its obligation to prepare such Tax Return in accordance with the past practices of the Transferred Entities or (ii) taken by Buyer on such Tax Return that Seller believes are not consistent with the past practices of the Transferred Entities and are not required by Law or (each such position in clauses (i) and (ii) a "Buyer Proposed Straddle Period Position”), and the corresponding position that is consistent with the past practices of the Transferred Entities and permitted by Law (each such position, a "Corresponding Seller Straddle Period Position”). In the event that Buyer and Seller are unable to agree as to inclusion or exclusion of any position with respect to such schedule within 25 days of the due date for filing (including extensions) of such Tax Return, Buyer and Seller shall jointly cause the Accounting Referee to resolve the dispute, provided that, for avoidance of doubt, so long as such Corresponding Seller Straddle Period Position is permitted by Law, such Tax Return shall reflect the Corresponding Seller Proposed Straddle Position. The costs, fees and expenses of the Accounting Referee shall be borne equally by Buyer and Seller.

     (c) Buyer and Seller agree that, to the extent permitted by law and except as they may otherwise agree in writing, the Transferred Entities will treat the Closing Date as the end of the applicable Tax Period for purposes of filing any Tax Return.

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     (d) Buyer shall not amend any Tax Return of a Transferred Entity relating to a Pre-Closing Tax Period without the consent of Seller.

     Section 8.07. Cooperation. Buyer and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information (including access to books and records) and assistance relating to the Transferred Entities and the Purchased Assets as is reasonably necessary (i) for the filing of any Tax Return, for the preparation for any audit, and for the prosecution or defense of any claim, suit or proceeding relating to any proposed adjustment, or (ii) for any financial accounting purpose. Buyer and Seller agree to retain or cause to be retained all books and records pertinent to the Transferred Entities and the Purchased Assets until the applicable period for assessment under applicable Law (giving effect to any and all extensions or waivers) has expired, and to abide by or cause the abidance with all record retention agreements entered into with any Taxing Authority. Each of Buyer and Seller agree to give the other reasonable notice prior to transferring, discarding or destroying any such books and records relating to Tax matters and, if so requested, shall allow the other party to take possession of such books and records. Buyer and Seller shall cooperate with each other in the conduct of any audit or other proceedings involving the Transferred Entities or the Purchased Assets for any Tax purposes and each shall execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 8.07. In no case will Seller be required to provide tax information except with respect to the Transferred Entities, the Purchased Assets and the Assumed Liabilities.

     Section 8.08. 368 Reorganization. (a) Prior to the Effective Time, each of Buyer and the Seller shall use its reasonable best efforts to cause the Merger to qualify as a 368 Reorganization, and shall not take any action that could reasonably be expected to cause the Merger not so to qualify.

     (b) Buyer shall not take, or cause the Surviving Corporation to take, any action after the Effective Time that would reasonably be expected to cause the Merger not to qualify as a 368 Reorganization.

     (c) Each of Buyer and the Seller shall use its reasonable best efforts to obtain the opinions referred to in Section 10.02(d) and 10.03(e).

     (d) This Section 8.08 shall not be applicable if Seller has made an Alternative Transaction Structure Election pursuant to Section 7.11.

     Section 8.09. Tax Indemnification with Respect to Transferred Entities, Purchased Assets and Assumed Liabilities. (a) Seller hereby indemnifies Buyer against and agrees to hold it harmless from and to pay any (i) Tax of the Transferred Entities relating to a Pre-Closing Tax Period, (ii) Taxes of any other Person for which the Transferred Entities may be liable as a result of Treas. Reg. Section 1.1502-6 (or any similar provision of applicable Law) or as a transferee or successor, (iii) Tax or Damages incurred or suffered by Buyer or any of its

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Affiliates (including, effective upon the Closing, a Transferred Entity), arising out of a breach of any covenant or agreement of Seller or its Affiliates contained in this Article 8, (iv) Taxes arising out of or relating to the Purchased Assets and Assumed Liabilities for or applicable to any Pre-Closing Period, (v) Tax of Buyer or any Affiliate thereof (including, after the Closing, any Transferred Entity) arising out of or resulting from the receipt by Buyer of any reimbursement, payment or contribution (or deemed contribution) from Seller pursuant to Sections 9.05, 9.06 or 9.07, (vi) penalties, interest or additions to Tax (but not the underlying Taxes) of the Transferred Entities attributable to the post-Closing portion of any Straddle Period incurred as a result of the inclusion of a Corresponding Seller Straddle Period Position shown on any Section 8.06(b) Schedule in any Tax Return of a Transferred Entity for a Straddle Period, and (vii) liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses), arising out of or incident to the imposition, assessment or assertion of any such Tax, including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, in each case incurred or suffered by Buyer, any of its Affiliates or, effective upon the Closing, the Transferred Entities (the sum of (i) through (v) being referred to as a “Loss”); provided, however, that Seller shall have no liability for the payment of any Loss attributable to or resulting from any action described in Section 8.03(a) or Section 8.08(b) hereof and provided, further, that Seller shall have no obligation to make any payment pursuant to this Section 8.09 if at the time the Loss is incurred or suffered by any Transferred Entity, as the case may be, Buyer no longer owns such Transferred Entity.

     (b) For purposes of this Section 8.09, in the case of any Taxes that are imposed on a periodic basis and are payable for a Tax period that includes (but does not end on) the Closing Date (a "Straddle Period”), the portion of such Tax related to the portion of such Tax period ending on and including the Closing Date shall (x) in the case of any Taxes other than gross receipts, sales or use Taxes and Taxes based upon or related to income, be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on and including the Closing Date and the denominator of which is the number of days in the entire Tax period and (y) in the case of any Tax based upon or related to income and any gross receipts, sales or use Tax, be deemed equal to the amount which would be payable if the relevant Tax period ended on and included the Closing Date. All determinations necessary to give effect to the allocation set forth in the foregoing clause (y) shall be made in a manner consistent with prior practice of the Transferred Entities.

     (c) If Seller’s indemnification obligation under this Section 8.09 arises in respect of an adjustment which makes allowable to Buyer, any of its Affiliates or, effective upon the Closing, a Transferred Entity any deduction, amortization, exclusion from income or other allowance (a “Tax Benefit”) which would not, but for such adjustment, be allowable, then Buyer shall pay to Seller an amount equal to the Tax Benefit if, as and when such Tax Benefit is actually realized in

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cash or a reduction in Taxes otherwise due. For purposes of this Section 8.09(c), the second through eighth sentences of Section 9.07(b) shall apply mutatis mutandis.

     (d) Any payment by Seller pursuant to this Section 8.09 shall be made in immediately available funds at least two Business Days before the date payment of the Taxes to which such payment relates is due, or, if no Tax is payable, not later than 10 days after receipt by Seller of written notice from Buyer stating that any Loss has been paid by Buyer, any of its Affiliates or, effective upon the Closing, a Transferred Entity and the amount thereof and of the indemnity payment requested.

     (e) If any claim or demand for Taxes in respect of which indemnity may be sought pursuant to this Section 8.09 is asserted in writing against Buyer, any of its Affiliates or, effective upon the Closing, a Transferred Entity, Buyer shall notify Seller of such claim or demand within 10 days of receipt thereof, or such earlier time that would allow Seller to timely respond to such claim or demand, and shall give Seller such information with respect thereto as Seller may reasonably request; provided, however, that the failure to give such prompt notice shall not relieve Seller of any of its obligations under this Section 8.09, except to the extent that Seller is actually prejudiced thereby. Seller may discharge, at any time, its indemnification obligation under this Section 8.09 by paying to Buyer the amount payable pursuant to this Section 8.09, calculated on the date of such payment. Seller may, at its own expense, participate in and, upon notice to Buyer, assume the defense of any such claim, suit, action, litigation or proceeding (including any Tax audit). If Seller assumes such defense, Seller shall have the sole discretion as to the conduct of such defense and Buyer shall have the right (but not the duty) to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by Seller. Whether or not Seller chooses to defend or prosecute any claim, all of the parties hereto shall cooperate in the defense or prosecution thereof.

     (f) Notwithstanding anything to the contrary in this Section 8.09, Buyer agrees that Seller is to have no liability for any Tax resulting from any action referred to in Section 8.03(a) of Buyer, any Affiliate of Buyer, or, after the Closing, any Transferred Entity, and agrees to indemnify and hold harmless Seller and its Affiliates against (i) any such Tax (together with any interest, penalty, addition to Tax or additional amount), (ii) any Tax or Damages incurred or suffered by Seller or any of its Affiliates, arising out of a breach of any other covenant or agreement of Buyer or its Affiliates contained in this Article 8, (iii) any Tax imposed on any Transferred Entity that is not subject to Seller’s indemnification obligation under this Section 8.09 and (iv) any liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorney’s fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax described in clause (i), (ii) or (iii) above. For purposes of this Section 8.09(f), Sections 8.09(b), (d) and (e) shall apply mutatis mutandis.

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     Section 8.10. Coordination and Survival. Claims for indemnification with respect to Taxes (other than in respect of any claim for misrepresentation or breach of warranty made by Seller under Section 3.13(e) or Section 3.22(k), which shall be governed exclusively by Article 11) shall be governed by this Article 8 and not Article 11. Notwithstanding anything in this Agreement to the contrary, the covenants and agreements contained in this Article 8 and the representation contained in Section 3.13(e) shall survive for ninety (90) days following the full period of all statutes of limitations (giving effect to any waiver, mitigation or extension thereof).

ARTICLE 9
Employee Matters and Benefits

     Section 9.01. Van Kampen Business Employees.

     (a) List of Van Kampen Business Employees; Categories of Van Kampen Business Employees. Seller and Buyer acknowledge and agree that the list of Van Kampen Business Employees set forth on Section 9.01(a) of the Seller Disclosure Schedule is comprised of both (i) Van Kampen Business Employees employed by the Transferred Entities (the “Transferred Entity Employees”) and (ii) Van Kampen Business Employees not employed by the Transferred Entities who otherwise primarily provide services to the Van Kampen Business (the “Other Included Employees”). Prior to the Closing Date, Seller or its appropriate Affiliate shall transfer the employment of any employee of the Transferred Entities who is not a Van Kampen Business Employee or who is a Leave Recipient to one of its Affiliates other than a Transferred Entity. Buyer shall, upon written notice to Seller, have the unilateral right prior to November 30, 2009, in its sole discretion, except as would be unlawful, to remove any of the Transferred Entity Employees and Other Included Employees that the parties shall have designated as of the date hereof with an asterisk (*) on Section 9.01(a) of the Seller Disclosure Schedule (such employees, the “Potential Van Kampen Business Employees”) from the list of Van Kampen Business Employees set forth on Section 9.01(a) of the Seller Disclosure Schedule and, upon Buyer’s exercise of such right, Seller or its appropriate Affiliate shall, with respect to any Potential Van Kampen Business Employee who is so removed (any such Potential Van Kampen Business Employee, a “Removed Van Kampen Business Employee”), if such Removed Van Kampen Business Employee is employed by a Transferred Entity, transfer the employment of such Removed Van Kampen Business Employee to one of its Affiliates other than a Transferred Entity. For the avoidance of doubt, any Removed Van Kampen Business Employees shall not be treated as Transferred Employees for purposes of this Agreement. Prior to the Closing Date, Seller shall update Section 9.01(a) of the Seller Disclosure Schedule to (i) denote which Van Kampen Business Employees are Transferred Entity Employees, which are Other Included Employees and which are Leave Recipients (taking into account the pre-Closing transfers required by the foregoing provisions of this Section 9.01(a)), (ii) delete any such employee who

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should no longer be a Van Kampen Business Employee because (w) his or her employment has been or will be prior to the Closing Date terminated (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)), (x) he or she has been or will be prior to the Closing Date reassigned (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)) and, as a result of such reassignment, he or she is no longer a Transferred Entity Employee or an Other Included Employee, (y) he or she is a Removed Van Kampen Business Employee or (z) Seller and Buyer mutually agree to such deletion, and (iii) add such employees who become Transferred Entity Employees or Other Included Employees, as the case may be, due to (x) their hire by Seller or its Affiliates (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)) or (y) the mutual agreement of Seller and Buyer.

     (b) Updating of Van Kampen Business Employee Information List. Seller shall provide Buyer, not later than the tenth day of each month prior to the Closing Date, with an updated Van Kampen Business Employee Information List that (i) contains the information required under Section 3.14(j) with respect to each individual whose information was not previously set forth on the Van Kampen Business Employee Information List and who became a Van Kampen Business Employee during the preceding month, either due to his or her hire by Seller or its Affiliates (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)) or due to the mutual agreement of Seller and Buyer and (ii) indicates each individual who was previously set forth on the Van Kampen Business Employee Information List and who is no longer a Van Kampen Business Employee because, during the preceding month, (w) his or her employment was terminated (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)), (x) he or she was reassigned (if applicable, to the extent permitted by Section 5.01(b)(iv)(E)) and, as a result of such reassignment, he or she is no longer a Transferred Entity Employee or an Other Included Employee, (y) he or she is a Removed Van Kampen Business Employee or (z) Seller and Buyer mutually agree that such individual should no longer be set forth on the Van Kampen Business Employee Information List.

     (c) Continued Employment; Offers of Employment. Buyer shall, or shall cause one of its Affiliates to, (i) continue to, as of the Closing Date, employ each of the Transferred Entity Employees who are employed immediately prior to the Closing and (ii) prior to the Closing Date (subject to Section 9.01(d) with respect to Leave Recipients) make a written offer, or cause one of its Affiliates (including the Transferred Entities) to make a written offer, of employment, commencing as of the Closing Date, to each Other Included Employee. Seller shall cooperate with Buyer in good faith to assist Buyer in its efforts to secure reasonably satisfactory employment arrangements with the Van Kampen Business Employees; provided that such arrangements are consistent with the provisions of this Article 9, including Appendix A to this Agreement with respect to Foreign Employees who primarily work or reside in the United Kingdom and Appendix B to this Agreement with respect to Foreign Employees who primarily work or reside in Japan, and in accordance with applicable Law. Each Van Kampen Business Employee whose employment continues automatically by operation of

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Law, and each Other Included Employee who accepts Buyer’s offer of employment and who continues or commences, as applicable, active employment with Buyer or one of its Affiliates (including, after the Closing, a Transferred Entity) as of his or her Transfer Date (as defined below), shall be referred to as a “Transferred Employee.”

     (d) Special Provisions for Leave Recipients. Buyer also shall, or shall cause its Affiliates to, make a written offer of employment to each Van Kampen Business Employee who is not actively employed immediately prior to the Closing Date and who has a right of reinstatement (collectively, "Leave Recipients”) on return from any approved leave or absence to the extent (i) Seller or its Affiliates would have been required to reinstate such Leave Recipient pursuant to applicable Law or any applicable Seller policy (pursuant to the terms of such policy as in effect as of the date hereof) and (ii) such Leave Recipient returns to active employment within the 180-day period following the Closing Date or any such longer period required pursuant to applicable Law. A list of Leave Recipients as of not later than five Business Days prior to the date hereof has been provided to Buyer. Such list shall be updated by Seller as of the Closing Date and delivered to Buyer within five Business Days following the Closing Date. Any Leave Recipient who meets the foregoing requirements shall be treated as a Transferred Employee as of 12:01 a.m., New York City time, of the date on which he or she returns to active employment with Buyer or its Affiliates. For the avoidance of doubt, any Leave Recipient to whom Buyer is not required to offer employment pursuant to this Section 9.01(d) shall not be a Transferred Employee for purposes of this Agreement.

     (e) Transfer Dates. The employment of Transferred Employees with Buyer or one of its Affiliates (including the Transferred Entities), as applicable, shall be effective as of 12:01 a.m., New York City time, on the Closing Date; provided, that, notwithstanding the foregoing, the employment of Leave Recipients will become effective as provided in Section 9.01(d) above. The date on which a Transferred Employee’s employment with Buyer or one of its Affiliates, as applicable, becomes effective is hereafter referred to as that Transferred Employee’s “Transfer Date.”

     (f) Individual Contracts. Buyer or one of its Affiliates shall assume each employment agreement, offer letter or similar individual Contract of each Transferred Employee that is set forth on Section 9.01(f) of the Seller Disclosure Schedule (each, a “Transferred Employee Agreement”) as of the applicable Transfer Date. For the avoidance of doubt, each such assumed Transferred Employee Agreement shall be an Assumed Benefit and Compensation Arrangement for all purposes under this Agreement including Buyer’s obligation to, and to cause its Affiliates to, honor such Transferred Employee Agreement in accordance with its terms pursuant to Section 9.02(j). For the avoidance of doubt, neither Buyer nor any of its Affiliates (including, after the Closing Date, the Transferred Entities) shall assume any Liability or obligation of Seller or any of its Affiliates under any Benefit and Compensation Arrangement that is not an

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Assumed Benefit and Compensation Arrangement pursuant to Buyer’s assumption of the Transferred Employee Agreements.

     (g) Severance. Seller and its Affiliates (excluding, after the Closing Date, the Transferred Entities) shall be responsible for any Liabilities related to any severance, termination, indemnity, redundancy or any other similar payment (including amounts incurred by Buyer or any of its Affiliates (including, after the Closing Date, the Transferred Entities)) with respect to any (i) employee of Seller or its Affiliates who is not a Van Kampen Business Employee, (ii) former employee of the Van Kampen Business or (iii) Removed Van Kampen Business Employee. Except as provided in the following sentence, in no event shall Seller, Buyer or their respective Affiliates (including the Transferred Entities) be obligated to pay severance to any Other Included Employee who rejects an offer of employment with Buyer or one of its Affiliate or accepts an offer of employment with Buyer or one of its Affiliates but subsequently refuses to become an employee of Buyer or any of its Affiliates. Notwithstanding the foregoing, if (i) any (A) Other Included Employee or (B) Leave Recipient who is able to return to active employment does not accept an offer of employment from Buyer or any of its Affiliates on the basis that such offer is conditioned on such employee’s relocating his or her principal place of employment in excess of 35 miles from its location as of immediately prior to the Closing and (ii) Seller or any of its Affiliates terminates the employment of such employee within 60 days following (A) the Closing Date, in the case of an Other Included Employee, or (B) the date on which such employee is able to return to active employment, in the case of a Leave Recipient, then Buyer shall promptly reimburse Seller for any severance or similar payment or benefit that is provided to such employee in connection with such termination.

     Section 9.02. Employee Matters.

     (a) Continuation of Compensation and Benefits. For a period of one year following each Transferred Employee’s Transfer Date, Buyer shall provide to (i) such Transferred Employee a base salary or wage rate that is not less than such Transferred Employee’s base salary or wage rate as in effect immediately prior to the Closing Date, (ii) such Transferred Employee whose employment is terminated without cause by Buyer or any of its Affiliates during such year, payments and benefits in accordance with Buyer’s Severance Plan, Amended and Restated as of May 1, 2009 (taking into account the provisions of Section 9.02(d)), which payments and benefits shall be conditioned on such Transferred Employee’s execution and non-revocation of a release of claims against Buyer, Seller and their respective Affiliates, and (iii) the Transferred Employees, collectively, benefits (other than severance payments and benefits) that are substantially comparable in the aggregate to the benefits (other than severance payments and benefits) provided by Seller and its Affiliates to the Transferred Employees as in effect immediately prior to the Closing Date; provided, however, that Buyer’s provision of benefits to the Transferred Employees that are substantially comparable in the aggregate to the benefits that are made available

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to similarly situated employees of Buyer or its Subsidiaries (other than the Transferred Entities) shall be deemed to satisfy the foregoing provisions of this Section 9.02(a)(iii) (it being understood that participation in such plans may commence at different times with respect to each such plan and whether or not such Transferred Employee elects to participate in any such plan and that in no event shall any closed or frozen plan of Buyer or its Subsidiaries be taken into account for purposes of determining whether Buyer has satisfied its obligation pursuant to this Section 9.02(a)(iii)). For the avoidance of doubt, the foregoing shall not apply to any incentive or variable incentive compensation arrangements, the provision of which shall be governed by Section 9.02(b) and Section 9.02(c).

     (b) Fiscal Year 2009 Incentive Compensation.

     (i) Prior to the Closing, Seller or one of its Affiliates shall, subject to approval by the Compensation, Management Development and Succession Committee of Seller’s Board of Directors (the “Seller Compensation Committee”), grant to each Van Kampen Business Employee who was designated as a Van Kampen Business Employee not later than November 30, 2009 and who is eligible to participate in any of the 2009 fiscal year incentive and variable incentive compensation plans or arrangements maintained by Seller or any of its Affiliates (each, a “2009 Bonus Plan” and each such Van Kampen Business Employee, a “2009 Bonus Plan Participant”) a cash-based long-term incentive compensation award (each, a “2009 Long-Term Incentive Award”), if such 2009 Bonus Plan Participant is eligible to receive a long-term incentive compensation award under any such 2009 Bonus Plan, and a bonus that is paid in cash pursuant to the terms of such 2009 Bonus Plan, if such 2009 Bonus Plan Participant is eligible to receive a cash bonus under any such 2009 Bonus Plan. Such 2009 Long-Term Incentive Awards shall contain the terms set forth in Section 9.02(b)(i) of the Seller Disclosure Schedule (the “2009 LTI Qualifying Terms”).

     (ii) The aggregate grant date value of the 2009 Long-Term Incentive Awards (such aggregate value, the “2009 LTI Value”) shall be the amount determined in accordance with Section 9.02(b)(ii) of the Seller Disclosure Schedule. The “2009 Deferred Compensation Amount” shall be an amount equal to (A) the 2009 LTI Value, plus (B) the aggregate appreciation, if any, in the value of the 2009 Long-Term Incentive Awards from their respective dates of grant through the Transferred Employees’ respective Transfer Dates, minus (C) the aggregate value of the 2009 Long-Term Incentive Awards held by the 2009 Bonus Plan Participants, if any, who do not become Transferred Employees.

     (iii) As soon as practicable following the Seller Compensation Committee’s approval of the 2009 Long-Term Incentive Awards, Seller shall provide Buyer with written notice that sets forth the terms of such

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awards, as so approved. If Buyer reasonably and in good faith determines that such terms are not substantially comparable to the 2009 LTI Qualifying Terms, then not later than ten Business Days following Seller’s notice, Buyer shall provide Seller with written notice indicating the specific reason(s) for Buyer’s determination.

     (iv) If Buyer does not provide Seller with written notice pursuant to Section 9.02(b)(iii), then Seller shall grant the 2009 Long-Term Incentive Awards, as approved pursuant to the first sentence of Section 9.02(b)(iii), and effective upon the Transfer Date applicable to a Transferred Employee, Buyer or one of its Affiliates shall assume such Transferred Employee’s 2009 Long-Term Incentive Award, which shall be subject to the same vesting and payment terms and have the same cash value (including for the avoidance of doubt any appreciation in such value from the date of grant of such award through such Transferred Employee’s Transfer Date) as applied to such award immediately prior to such assumption.

     (v) If Buyer provides Seller with written notice pursuant to Section 9.02(b)(iii), then Seller may elect to modify the terms of the 2009 Long-Term Incentive Awards, in which case Seller shall provide Buyer with written notice that sets forth the terms of such awards, as Seller proposes to modify them. If Buyer reasonably and in good faith determines that such terms are not substantially comparable to the 2009 LTI Qualifying Terms, then not later than five Business Days following Seller’s notice, Buyer shall provide Seller with written notice indicating the specific reason(s) for Buyer’s determination.

     (vi) If Buyer does not provide Seller with written notice pursuant to Section 9.02(b)(v), then Seller shall grant the 2009 Long-Term Incentive Awards, as modified pursuant to the first sentence of Section 9.02(b)(v), and effective upon the Transfer Date applicable to a Transferred Employee, Buyer or one of its Affiliates shall assume such Transferred Employee’s 2009 Long-Term Incentive Award, which shall be subject to the same vesting and payment terms and have the same cash value (including for the avoidance of doubt any appreciation in such value from the date of grant of such award through such Transferred Employee’s Transfer Date) as applied to such award immediately prior to such assumption.

     (vii) If Buyer determines reasonably and in good faith in accordance with this Section 9.02(b) that the terms of the 2009 Long-Term Incentive Awards (either as approved by the Seller Compensation Committee or as proposed to be modified by Seller following such approval) are not substantially comparable to the 2009 LTI Qualifying Terms or if Seller does not modify the terms of the 2009 Long-Term

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Incentive Awards after Buyer provides Seller with written notice pursuant to Section 9.02(b)(iii), then:

     (A) Buyer shall not assume the 2009 Long-Term Incentive Awards, Seller shall retain all liability in respect of such awards and such awards shall not be deemed Assumed Benefit and Compensation Arrangements for purposes of this Agreement; and

     (B) effective upon the Transfer Date applicable to a Transferred Employee, Buyer or one of its Affiliates shall grant to such Transferred Employee a long-term incentive award, which shall be subject to the same vesting and payment terms and such other terms as are set forth on Section 9.02(b)(i) of the Seller Disclosure Schedule and have the same cash value (including for the avoidance of doubt any appreciation in such value from the date of grant of such Transferred Employee’s 2009 Long-Term Incentive Award through such Transferred Employee’s Transfer Date) in each case as would have applied to such 2009 Long-Term Incentive Award had Buyer or such Affiliate assumed such award pursuant to this Section 9.02(b).

     (viii) Seller and Buyer shall cooperate in good faith to effectuate this Section 9.02(b) and Section 9.02(b) of the Seller Disclosure Schedule.

     (c) Fiscal Year 2010 Incentive Compensation. Seller and Buyer shall cooperate in good faith to establish fiscal year 2010 incentive and variable incentive compensation programs for the Van Kampen Business Employees who are 2009 Bonus Plan Participants (and any other Van Kampen Business Employees mutually selected by Seller and Buyer) which programs are to be generally consistent with the fiscal year 2010 incentive and variable incentive compensation programs established by Buyer in the ordinary course of business consistent with past practice with respect to its and its Subsidiaries’ (other than the Transferred Entities) similarly situated employees. Transferred Employees who are not covered by the immediately preceding sentence shall, with respect to Buyer’s 2010 fiscal year, be eligible to participate in such fiscal year 2010 incentive and variable incentive compensation programs that are offered to similarly situated employees of Buyer and its Subsidiaries (other than the Transferred Entities) in the ordinary course of business consistent with past practice (such programs, together with the programs established pursuant to the immediately preceding sentence, the “2010 Incentive Compensation Programs”). Without limiting the generality of the foregoing, with respect to each Van Kampen Business Employee who as of the date hereof has a “legally binding right” (as defined for purposes of Section 409A of the Code) to compensation payable with respect to fiscal year 2010, Seller and Buyer shall cooperate in good faith to ensure that the terms and conditions applicable to such compensation are intended to comply with Section 409A of the Code, to the

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extent applicable. For the avoidance of doubt, Buyer and its Subsidiaries shall be responsible for granting all awards under the 2010 Incentive Compensation Programs to the Transferred Employees and, except as otherwise expressly provided herein, paying all costs associated with such awards granted to the Transferred Employees.

     (d) Credit for Service. With respect to any employee benefit or compensation plan, program, policy, arrangement (including, for the avoidance of doubt, any vacation program or policy) or agreement of Buyer or any of its Subsidiaries in which any Transferred Employee becomes a participant, such Transferred Employee shall receive full credit for all purposes for such Transferred Employee’s service with Seller or any of its Subsidiaries (or predecessor employers) to the same extent that such service was recognized as of the Closing Date under an analogous plan of Seller and its Subsidiaries in which the Transferred Employee participated; provided that the foregoing shall not apply (i) with respect to benefit accrual under any defined benefit pension plan or (ii) to the extent that its application would result in a duplication of benefits. Subject to applicable Law and the provisions of this Agreement, after the Closing Date, Buyer expressly reserves the right to amend, modify or terminate any benefit plan or program established or maintained by Buyer or any of its Affiliates for the benefit of Transferred Employees in accordance with the terms of such plan or program and applicable Law.

     (e) Preexisting Conditions; Coordination. With respect to any welfare plan maintained by Buyer or any of its Subsidiaries in which any Transferred Employee is eligible to participate after the Closing Date, Buyer shall, or shall cause its Subsidiaries to, waive all limitations as to preexisting conditions and exclusions with respect to participation and coverage requirements applicable to such Transferred Employees and provide each Transferred Employee with credit for any co-payments and deductibles paid and for amounts paid toward any out-of-pocket maximums prior to the Closing Date in satisfying any analogous plan’s deductible or out-of-pocket requirements to the extent applicable under any such plan (other than a high deductible health plan with health savings accounts).

     (f) Vesting Under Seller’s 401(k) Plans. Seller shall fully vest the accounts of the Transferred Employees in the 401(k) savings plans of Seller and its Affiliates (the “Seller 401(k) Plans”) (or, in the case of Foreign Employees who become Transferred Employees, the accounts under a comparable Foreign Plan of Seller and its Affiliates). From and after the Closing Date, Seller will assume or retain, as the case may be, and be solely responsible for and will fully perform, pay and discharge, in accordance with their terms, all Liabilities in respect of Van Kampen Business Employees and former employees of the Transferred Entities (and claims by or relating to such Persons) under the Seller 401(k) Plans (or comparable Foreign Plan of Seller and its Affiliates).

     (g) Retiree Medical. Seller and its Affiliates shall permit each Transferred Employee who (i) but for the termination of his or her employment

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with Seller and its Affiliates in connection with the transactions contemplated by this Agreement, has or would have, as of his or her Transfer Date, satisfied the eligibility requirements for benefits under the Benefit and Compensation Arrangements that provide for retiree medical or retiree life insurance benefits (“Seller Retiree Welfare Benefits Arrangements”) and (ii) within the time period permitted by the Seller Retiree Welfare Benefits Arrangements has elected to commence coverage under the Seller Retiree Welfare Benefits Arrangements, to commence coverage under the Seller Retiree Welfare Benefits Arrangements after his or her Transfer Date. From and after the Closing Date, Seller and its Affiliates (excluding the Transferred Entities) will assume or retain, as the case may be, and be solely responsible for and will fully perform, pay and discharge, in accordance with their terms, all Liabilities in respect of Van Kampen Business Employees and former employees of the Transferred Entities (and claims by or relating to such Persons) with respect to Seller Retiree Welfare Benefits Arrangements, whether under the Benefit and Compensation Arrangements or otherwise.

     (h) Welfare Benefits Generally. (i) Subject to Section 9.01(g), Seller and its Affiliates shall be solely responsible for (A) claims for the type of benefits described in Section 3(1) of ERISA (whether or not covered by ERISA) (“Welfare Benefits”) and for workers’ compensation, in each case that are incurred by or with respect to any Transferred Employee before his or her Transfer Date; (B) claims relating to COBRA Coverage attributable to “qualifying events” with respect to any Transferred Employee and his or her beneficiaries and dependents that occur before such Transferred Employee’s Transfer Date; (C) claims for Welfare Benefits and for workers’ compensation, in each case that are incurred by or with respect to any current or former employee of the Van Kampen Business who does not become a Transferred Employee, whether incurred before, on or after the Closing Date; and (D) claims relating to COBRA Coverage attributable to “qualifying events” with respect to any Van Kampen Business Employee who does not become a Transferred Employee and his or her beneficiaries and dependents, whether occurring before, on or after the Closing Date; and (ii) Buyer and its Affiliates shall be solely responsible for (A) claims for Welfare Benefits and for workers compensation, in each case that are incurred by or with respect to any Transferred Employee on or after his or her Transfer Date, and (B) claims relating to COBRA Coverage attributable to “qualifying events” with respect to any Transferred Employee and his or her beneficiaries and dependents that occur on or after such Transferred Employee’s Transfer Date. For purposes of the foregoing, a medical/dental claim shall be considered incurred when the services are rendered, the supplies are provided or the medication is prescribed, and not when the condition arose; provided that claims relating to a hospital confinement that begins before the Transfer Date but continues thereafter shall be treated as incurred before the Transfer Date. A disability or workers’ compensation claim shall be considered incurred before the relevant Transferred Employee’s Transfer Date if the injury or condition giving rise to the claim occurs before such Transfer Date, but only if such claim is actually filed on or before the six-month anniversary of such Transfer Date.

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     (i) Paid Time-Off. Seller shall, or shall cause one of its Affiliates to, pay each Transferred Employee (except with respect to any Foreign Employee who primarily works or resides in the United Kingdom, which shall be treated in accordance with the terms specified on Appendix A) for any vacation time earned but unused by such Transferred Employee as of his or her Transfer Date, which payment shall be made on or as soon as is reasonably practicable following such Transfer Date. For the avoidance of doubt, but subject to the exception set forth above with respect to any Foreign Employee who primarily works or resides in the United Kingdom, Seller and its Affiliates (other than the Transferred Entities) shall retain and be responsible for liabilities in respect of the earned and unused vacation time of the Transferred Employees.

     (j) Honoring Assumed Benefit and Compensation Arrangements. Buyer shall, and shall cause its Affiliates to, assume and honor the terms of each Assumed Benefit and Compensation Arrangement and all obligations thereunder. Notwithstanding the foregoing, nothing contained herein shall prohibit Buyer, the Transferred Entities or any of their respective Affiliates from terminating or amending any particular Assumed Benefit and Compensation Arrangement after the Closing Date in accordance with the terms of such arrangement and applicable Law. Prior to the Closing Date, Seller shall, or shall cause the applicable Transferred Entity to transfer the Legacy Van Kampen Nonqualified Plans (and the assets and liabilities related thereto) to Seller or one of its Affiliates (other than the Transferred Entities), and Seller shall retain and be responsible for the liabilities under such Legacy Van Kampen Nonqualified Plans.

     Section 9.03. Compliance with Applicable Law for Non-U.S. Employees. With respect to any Foreign Employees who do not primarily work or reside in the United Kingdom or Japan, Buyer’s and Seller’s respective obligations under this Article 9 shall be consistent with those set forth in this Article 9 with respect to Van Kampen Business Employees primarily residing or working in the United States, with such modifications (other than the assumption of liability) as are necessary to comply with applicable Laws of the foreign countries and political subdivisions thereof in which such Foreign Employees primarily reside or work. Buyer’s and Seller’s respective obligations with respect to Foreign Employees who primarily work or reside in the United Kingdom and Japan shall be governed by the provisions of Appendix A and B to this Agreement, respectively.

     Section 9.04. Cooperation; Employee Communications. Seller has taken prior to the date hereof commercially reasonable actions as are necessary to enable the parties to carry out the transactions contemplated by this Agreement with respect to trade unions, works councils, employee representatives and employees, or, where such actions are required to be taken after the date hereof, whether by Law or otherwise, will take such actions as soon as reasonably practicable following the date hereof (and in any event prior to the Closing Date or as otherwise required under this Agreement or any exhibit hereto). Buyer and Seller will reasonably cooperate in making all appropriate filings required by Law, implementing all appropriate communications with participants, exchanging

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and sharing appropriate records and taking such other action as may be necessary or appropriate to implement the provisions of this Article 9. Any communications by Seller or its Affiliates (including, prior to the Closing Date, the Transferred Entities) in respect of the matters pertaining to this Agreement with the Van Kampen Business Employees prior to the Closing Date shall be subject to and in compliance with the terms of this Agreement. Written communications from Seller or its Affiliates (including, prior to the Closing Date, the Transferred Entities) in respect of the matters pertaining to this Agreement to the Van Kampen Business Employees (except with respect to any Foreign Employees who primarily work or reside in the United Kingdom and Japan to the extent specified on Appendix A and B to this Agreement, respectively) shall be subject to review and comment by Buyer, and Seller shall consider in good faith revising such written communications to reflect any comments that Buyer timely provides to Seller. Seller shall not make any legally binding promises or commitments to the Van Kampen Business Employees with respect to employment by Buyer or its Affiliates (including, after the Closing Date, the Transferred Entities) or the terms and conditions thereof.

     Section 9.05. Stock Options and Restricted Stock Units. (a) From and after the Closing Date, Seller and its Affiliates (excluding the Transferred Entities) will assume or retain, as the case may be, and be solely responsible for and will fully perform, pay and discharge, in accordance with their terms, all Liabilities in respect of Van Kampen Business Employees (including the Transferred Employees) and former employees of the Van Kampen Business (and claims by or relating to such Persons) with respect to such Seller Equity Awards.

     (b) Responsibility for Tax Deduction, Tax Withholding and Reporting Obligations and Tax and Dividend Equivalent Payments.

     (i) Party Eligible to Record Tax Deduction. With respect to each Seller Equity Award, including all dividend equivalent amounts paid in respect of such award, held by a Van Kampen Business Employee or a former employee of the Van Kampen Business, the party that will be entitled to the tax deduction with respect to such award will be the employer entity at the time of grant. For the avoidance of doubt, Buyer or an Affiliate (including, after the Closing, a Transferred Entity) will deduct for tax purposes the compensation expense with respect to each Seller Equity Award held by any such employee who was employed by any Transferred Entity at the time of grant (such Seller Equity Awards, the “Buyer Deductible Seller Equity Awards”), including all dividend equivalent amounts paid to such employee in respect of such Buyer Deductible Seller Equity Awards (such dividend equivalent amounts, the “Buyer Deductible Dividend Equivalent Amounts”), and Seller or an Affiliate (other than, after the Closing, a Transferred Entity) will deduct for tax purposes the compensation expense with respect to each Seller Equity Award held by any such employee who was employed by Seller or any of its Affiliates (other than a Transferred Entity) at the time of grant,

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including all dividend equivalent amounts paid to such employee in respect of such award.

     (ii) Responsibility for Tax Withholding and Reporting Obligations.

     (A) Party Responsible for Tax Withholding and Reporting Obligations. With respect to each Seller Equity Award held by a Van Kampen Business Employee or a former employee of the Van Kampen Business, the party that will be responsible for all tax withholding and reporting obligations that arise in connection with the exercise, conversion or other settlement of such award or the payment of dividend equivalent amounts with respect to such award will be the employer entity at the time of grant. For the avoidance of doubt, Buyer or an Affiliate (including, after the Closing, a Transferred Entity) will be responsible for all tax withholding and reporting obligations with respect to the Buyer Deductible Seller Equity Awards and Buyer Deductible Dividend Equivalent Amounts, and Seller or an Affiliate (other than a Transferred Entity) will be responsible for all tax withholding and reporting obligations with respect to each Seller Equity Award and any related dividend equivalent amounts held by any such employee who was employed by Seller or any of its Affiliates (other than a Transferred Entity) at the time of grant. Notwithstanding the foregoing or anything to the contrary contained herein, Seller or an Affiliate (other than a Transferred Entity) shall take the action necessary to satisfy all withholding requirements with respect to taxes that become payable due to vesting that occurs on the Transferred Employee’s respective Transfer Dates (without regard to whether such vesting results in the inclusion of an amount in gross income), which shall include for employees subject to taxation in the U.S. the withholding required under Sections 3121(v) and 3306(r) of the Code, and any such withheld amounts shall be reported by Seller.

     (B) Cash Transfer from Seller to Buyer for Net Share Settlement. With respect to each Buyer Deductible Seller Equity Award held by a Van Kampen Business Employee or a former employee of the Van Kampen Business, in each case who was employed by any Transferred Entity at the time of grant, in the event that, at or prior to the time of the exercise, conversion or other settlement of such award, such employee elects net share settlement to satisfy tax withholding, Seller and Buyer agree that Seller shall transfer to Buyer (i) cash, as soon as practicable following such exercise, conversion or other settlement but in no event later than the next applicable regular or special payroll date, in an amount equal to the value of any such shares withheld from

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delivery upon such exercise, conversion or other settlement (which amount shall in no event be less than the statutorily required amounts) and (ii) deliver to Buyer on a timely basis (i.e., giving Buyer a reasonable amount of time to fulfill any reporting obligations) any information regarding such exercise, conversion or other settlement that Buyer is obligated to report to the IRS in connection therewith.

     (C) Gross Share Settlement. If a Van Kampen Business Employee or former employee of the Van Kampen Business, in each case who was employed by any Transferred Entity at the time of grant of a Buyer Deductible Seller Equity Award has not elected net share settlement to satisfy tax withholding as set forth in (B) above (or otherwise incurs a tax liability, such as FICA taxation, imposed upon vesting of a Seller Equity Award that is deferred compensation without regard to whether such vesting results in the inclusion of an amount in gross income), Seller will (i) collect such withholding amount from such employee in a manner approved by Seller and will remit cash, as soon as practicable following exercise, conversion or other settlement of such award but in no event later than the next applicable regular or special payroll date, to Buyer in the amount of any tax withholding obligations that arise in connection with such exercise, conversion or other settlement (which amount shall in no event be less than the statutorily required amounts) and (ii) deliver to Buyer on a timely basis (i.e., giving Buyer a reasonable amount of time to fulfill any reporting obligations) any information regarding such event that Buyer is obligated to report to the IRS in connection therewith.

     (iii) Dividend Equivalent Payments. With respect to each Seller Equity Award held by a Van Kampen Business Employee or a former employee of the Van Kampen Business, in each case who was employed by a Transferred Entity at the time of grant, Seller will retain liability for all Buyer Deductible Dividend Equivalent Amounts owing to such employee in respect of such award and will have the obligation to transfer to Buyer an amount of cash equal to 100% of all Buyer Deductible Dividend Equivalent Amounts owing to such employee in respect of such award, payable to Buyer no later than the date on which dividend payments are payable to shareholders. Buyer or an Affiliate (including, after the Closing, a Transferred Entity) will have the obligation to pay such employee 100% of all such Buyer Deductible Dividend Equivalent Amounts net of any applicable tax withholding.

     Section 9.06. Cash Based Deferred Compensation.

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     (a) Vesting. To the extent provided under the terms of each unvested Cash Deferred Compensation Award, other than any 2009 Long-Term Incentive Award, held by a Van Kampen Business Employee who is a Transferred Employee that is outstanding under any Benefit and Compensation Arrangement on such Transferred Employee’s Transfer Date, such award will become fully vested on such Transferred Employee’s Transfer Date.

     (b) Allocation of Liabilities. Seller shall retain liabilities that relate to awards or account balances of deferred cash compensation outstanding under Benefit and Compensation Arrangements immediately prior to the Closing and held by Van Kampen Business Employees and former employees of the Van Kampen Business (such awards and account balances, collectively, the “Cash Deferred Compensation Awards”).

     (c) Party Eligible to Record Tax Deduction. With respect to each Cash Deferred Compensation Award, the party that will record the tax deduction with respect to such award will be the employer entity at the time of grant. For the avoidance of doubt, Buyer or an Affiliate (including, after the Closing, a Transferred Entity) will record the tax deduction with respect to each Cash Deferred Compensation Award held by any employee who was employed by any Transferred Entity at the time of grant (such Cash Deferred Compensation Awards, the “Buyer Deductible Cash Deferred Compensation Awards”), and Seller or an Affiliate (other than a Transferred Entity) will record the tax deduction with respect to each Cash Deferred Compensation Award held by any employee who was employed by Seller or any of its Affiliates (other than a Transferred Entity) at the time of grant.

     (d) Payment of Cash Deferred Compensation Awards; Responsibility for Tax Withholding and Reporting Obligations. In advance to the extent practicable and in no event later than the date on which a payment of a Buyer Deductible Cash Deferred Compensation Award for which Seller retains liability under this Section 9.06 first becomes due to an employee, Seller shall transfer to Buyer an amount of cash equal to the full value of the Buyer Deductible Cash Deferred Compensation Award or portion thereof actually paid. Buyer shall be responsible for all tax withholding and reporting obligations that arise in connection with any payments under any Buyer Deductible Cash Deferred Compensation Award. Notwithstanding the foregoing or anything to the contrary contained herein, Seller or an Affiliate (other than a Transferred Entity) shall take the action necessary to satisfy all withholding requirements with respect to taxes that become payable due to vesting that occurs on the Transferred Employee’s respective Transfer Dates (without regard to whether such vesting results in the inclusion of an amount in gross income), which shall include for employees subject to taxation in the U.S. the withholding required under Sections 3121(v) and 3306(r) of the Code, and any such withheld amounts shall be reported by Seller.

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     Section 9.07. Provision of Information; Reimbursement of Compensation Related Tax Benefit; Payment of Paying Agent Costs.

     (a) Provision of Withholding and Reporting Information and Information Necessary to Satisfy Accounting Obligations. Notwithstanding anything contained herein to the contrary, Buyer’s performance of its withholding and reporting obligations under Sections 9.05 and 9.06 shall be subject to Seller’s timely and accurate provision of the information necessary for Buyer to satisfy such obligations, including information to satisfy all reporting obligations with respect to compensation that is considered a “deferred compensation arrangement” within the meaning of Section 409A of the Code. Without limiting the foregoing sentence, in the case of Buyer’s withholding obligations, Seller shall provide Buyer, in advance to the extent possible and in any event no later than the date on which an amount in respect of a Buyer Deductible Seller Equity Award, Buyer Deductible Dividend Equivalent Amount or Buyer Deductible Cash Deferred Compensation Award first becomes includible in the gross income of an applicable employee for income tax purposes, with the following information in respect of a Buyer Deductible Seller Equity Award, Buyer Deductible Dividend Equivalent Amount or Buyer Deductible Cash Deferred Compensation Award: (i) the amount of taxable income in respect of such award exercise, settlement or payment, (ii) the cash value of any shares withheld in the case of awards for which net share settlement was elected; and (iii) the amount of any taxes previously withheld to satisfy tax withholding under Sections 3121(v) and 3306(r) of the Code or corresponding or similar provisions of state Laws. In addition, without limiting the obligation under the first sentence of this Section 9.07(a), Seller shall provide Buyer with the amount of “wages” in respect of a Buyer Deductible Seller Equity Award, Buyer Deductible Dividend Equivalent Amount or Buyer Deductible Cash Deferred Compensation Award, in advance to the extent possible and in any event no later than the date on which an amount in respect of a Buyer Deductible Seller Equity Award, Buyer Deductible Dividend Equivalent Amount or Buyer Deductible Cash Deferred Compensation Award becomes subject to tax withholding under Sections 3121(v) and 3306(r) of the Code or corresponding or similar provisions of state Laws, without regard to whether such amount is includible in gross income. In the case of Buyer’s reporting obligations, promptly after the end of the taxable period to which the reporting obligation relates (but in no event later than the date that is five Business Days prior to the reporting deadline without extension), Seller shall provide Buyer with all necessary information for Buyer or its applicable Affiliate to satisfy its reporting obligations. No later than the Closing, Seller shall provide Buyer with detailed information regarding all Buyer Deductible Seller Equity Awards, Buyer Deductible Dividend Equivalent Amounts or Buyer Deductible Cash Deferred Compensation Awards, including without limitation, payment and settlement dates and whether any such arrangement is considered a “deferred compensation arrangement” within the meaning of Section 409A of the Code, Buyer shall timely provide Seller and its Affiliates with all information necessary to enable Seller to determine whether any Transferred Employee has experienced a “separation from service” (as defined for purposes of Section 409A of the Code)

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under any Benefit and Compensation Arrangement (other than an Assumed Benefit and Compensation Arrangement) in which such Transferred Employee participates after his or her Transfer Date.

     (b) Compensation Related Tax Benefit. In the event that Buyer, any of its Affiliates or, effective upon the Closing, a Transferred Entity actually realizes any tax benefit (determined on a with and without basis), either in cash or as a reduction of Taxes otherwise due as a result of any tax deduction in respect of amounts paid pursuant to the Buyer Deductible Compensatory Arrangements, which, for avoidance of doubt, shall include the tax benefit associated with the use in any future tax year of a net operating loss carryforward, foreign tax credit carryforward or similar item that, but for the existence of such tax deduction in a prior year, would have been used in such prior year (any such tax benefit a “Compensation Related Tax Benefit”), Buyer shall pay to Seller an amount equal to such Compensation Related Tax Benefit (based on the actual Compensation Related Tax Benefit realized in respect of the applicable Buyer Deductible Compensatory Arrangement to which the Compensation Related Tax Benefit relates), as, if, and when such Compensation Related Tax Benefit is actually realized. Within 10 days after the filing of the federal income tax return for or that includes a Transferred Entity for each taxable year ending after the Closing Date (until Buyer and Seller agree in writing that no further payments in respect of Compensation Related Tax Benefits are required to be made by Buyer), Buyer shall provide Seller with a statement setting forth Buyer’s computation of the Compensation Related Tax Benefit realized by Buyer in such taxable year in reasonable detail. Buyer shall promptly provide to Seller such information as Seller may reasonably request regarding such computation. Within 10 days after receiving such statement, Seller shall either (i) deliver a written notice to Buyer stating that it agrees with such computation, or (ii) deliver a written notice to Buyer stating that it objects to Seller’s computation and setting forth in reasonable detail the basis for such objection(s). In the event that Seller delivers such written notice of objection, Buyer and Seller shall cooperate in good faith to try to resolve such dispute. In the event that Buyer and Seller are unable to resolve any dispute within 20 days after receipt of such notice from Seller, Buyer and Seller shall jointly cause the Accounting Referee to resolve the dispute within 20 days. The costs, fees and expenses of the Accounting Referee shall be borne equally by Buyer and Seller. Within three days after the resolution of such dispute by the parties or the Accounting Referee, or, if Seller delivers a written notice of agreement to Buyer, within three days after the receipt of such notice by Buyer, Buyer shall pay to Seller the Compensation Related Tax Benefit as so determined. Any payment not made within such time shall bear interest at the rate set forth in Section 5.08(d) for each day thereafter until paid. Buyer shall in no event be required to reimburse Seller for any tax benefit that Buyer or any of its Affiliates (including, after the Closing Date, the Transferred Entities) realize in respect of (i) the 2009 Long-Term Incentive Awards, (ii) any cash bonus that is awarded pursuant to the terms of a 2009 Bonus Plan that is not paid by Seller prior to the Closing Date or (iii) any awards granted under the 2010 Incentive Compensation Programs.

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     (c) Payment of Paying Agent Costs. Seller shall reimburse Buyer on a monthly basis in arrears for the following costs associated with being the paying agent for Seller Equity Awards, Cash Deferred Compensation Awards and Buyer Deductible Dividend Equivalent Amounts: (i) the amount of any employer portions of any social security or tax remittance obligations that are paid by Buyer or one of its Affiliates in satisfaction of the withholding obligations and that are not otherwise reimbursed to Buyer under Sections 9.05 and 9.06 (provided, that, in the case of the employer portion of social security tax or any similar tax remittance obligation paid by Buyer or one of its Affiliates that is subject to an annual or other periodic cap, Seller shall reimburse Buyer in arrears after the end of the relevant period and only to the extent that the aggregate amount paid by Buyer and its Affiliates taking into account the Seller Equity Awards, Cash Deferred Compensation Awards or Buyer Deductible Dividend Equivalent Amounts attributable to such period for such purposes exceeds the amount that would have been paid by Buyer without taking into account such items in such period) and (ii) the amount equal to the actual costs and expenses incurred by Buyer and its Affiliates in connection with the performance of the payment of, and withholding and reporting obligations in respect of, such Seller Equity Awards, dividend equivalent amounts and Cash Deferred Compensation Awards (the sum of the amounts set forth in clauses (i) and (ii), the “Buyer Paying Agent Costs”).

     (d) Timing of Reimbursements to Buyer. Seller shall reimburse Buyer for any applicable Buyer Paying Agent Costs promptly but in no event later than 10 days after Buyer’s presentation to Seller of a statement setting forth in reasonable detail the applicable Buyer Paying Agent Costs. Any payment not made within such time shall bear interest at the rate set forth in Section 5.08(d) for each day until paid, retroactive from the date of the presentation of such statement.

     (e) Agreed Tax Treatment of Payments. Buyer and Seller agree that (i) any payment made (or deemed for federal income tax purposes to have been made) by Seller to Buyer pursuant to Sections 9.05, 9.06 or 9.07(c)(i) shall be treated by both Buyer and Seller for all Tax purposes as a capital contribution by Seller to Van Kampen Parent that, for avoidance of doubt, does not constitute gross income to Buyer, Van Kampen Parent or any of their respective Affiliates, (ii) any payment made by Buyer to Seller pursuant to Section 9.07(b) shall be treated for all Tax purposes as an adjustment to the Merger Consideration and (iii) any payment made by Seller to Buyer pursuant to Section 9.07(c)(ii) shall be treated as a payment for services performed by Buyer for Seller.

     Section 9.08. Additional Provisions Applicable to Seller Equity Awards and Cash Based Deferred Compensation..

     (a) Indemnity; Offset. Buyer shall indemnify and hold harmless Seller for any breach of its obligations under Sections 9.05 and 9.06, and Seller shall indemnify and hold harmless Buyer for any breach of its obligations under

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Sections 9.05 and 9.06. Any cash transfers to be made by Seller to Buyer under Sections 9.05 or 9.06 may be offset or otherwise reduced by any payments (other than any disputed payments) owed by Buyer to Seller, and any cash transfers to be made by Buyer to Seller under Section 9.05 or 9.06 may be offset or otherwise reduced by any payments (other than disputed payments) owed by Seller to Buyer, and such transfers shall be made as soon as reasonably practicable following the end of the fiscal quarter of Seller. If a Transferred Entity ceases to be affiliated with the affiliated group of corporations (as defined in Section 1504(a) of the Code) controlled by Buyer, Buyer shall cause such Transferred Entity to assume all obligations of Buyer under Sections 9.05 and 9.06 in respect of each Seller Equity Award and Cash Deferred Compensation Award held by a Van Kampen Business Employee or former employee of the Van Kampen Business, in each case who was employed by such Transferred Entity at the time of grant of such award, and corresponding responsibilities of Seller under such sections in respect of Buyer shall apply in respect of such Transferred Entity.

     (b) Necessary Agreements; Establishment of Systems. Seller and Buyer agree to, in each case, as soon as practicable after the date hereof, but in any event, prior to the Closing Date, (i) enter into any necessary agreements regarding the subject matter of Sections 9.05 and 9.06 and (ii) establish any necessary systems and frameworks, in each case, to enable them to fulfill their respective obligations hereunder, including but not limited to compliance with all applicable Laws and regulations regarding the reporting, withholding or remitting of income and social insurance taxes, the transmittal of information, processing and integration of payroll systems and reimbursement of applicable amounts, and further including but not limited to any special arrangements generally consistent with the practices set forth in this Article 9 that may be necessary or mutually desirable in connection with any employee or former employee who was employed by any Transferred Entity at the time of grant of such employee’s Buyer Deductible Seller Equity Awards or Buyer Deductible Cash Deferred Compensation Awards or at the time of such employee’s participation in the applicable Legacy Van Kampen Nonqualified Deferred Compensation Plan (collectively, the “Necessary Arrangements and Systems”). Seller and Buyer shall each, no later than 10 Business Days after the date hereof, designate an individual who will be primarily responsible for establishing or entering into, as the case may be, any such Necessary Arrangements and Systems, overseeing the respective party’s obligations under Sections 9.05, 9.06 and 9.07 and having general supervisory authority over the respective party’s service providers performing such obligations.

     (c) Application to Foreign Employees or Non-U.S. Employees Who were Employed by a Transferred Entity at the Time of Grant. Notwithstanding anything contained herein to the contrary, as soon as reasonably practicable following the date hereof, the parties shall work in good faith to agree as to whether and, if so, the extent to which, the withholding and reporting provisions of Sections 9.05(b)(ii)(A), 9.05(b)(iii) and 9.06(d) shall apply to Buyer Deductible Seller Equity Awards and Buyer Deductible Cash Deferred Compensation

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Awards held by Foreign Employees or non-U.S. employees who were employed by a Transferred Entity as of the time of grant, but in each case only to the extent, if any, that an entity domiciled in a non-U.S. jurisdiction is responsible for any withholding or reporting obligations that arise in connection with the exercise, conversion or other settlement of such awards, taking into account the administrative practicality for Buyer; it being understood that if Buyer does not have a business unit or entity in a particular non-U.S. jurisdiction it will not be required to fulfill the withholding and reporting obligations under Sections 9.05(b)(ii)(A), 9.05(b)(iii) and 9.06(d) with respect to such awards.

     Section 9.09. No Amendment; No Third-Party Beneficiaries. Nothing in this Article 9 shall (a) be treated as an amendment of, or undertaking to amend, any benefit plan, (b) obligate Buyer, Seller or any of their respective Affiliates to retain the employment of any particular employee or (c) confer any rights or benefits on any person, including but not limited to any Van Kampen Business Employee, other than the parties to this Agreement.

ARTICLE 10
Conditions to Closing

     Section 10.01. Conditions to Obligations of Buyer and Seller. The obligations of Buyer and Seller to consummate the Closing are subject to the satisfaction of the following conditions:

     (a) Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated.

     (b) No order, injunction or decree issued by any Government Entity of competent jurisdiction, and no provision of any applicable Law, shall prohibit or make illegal the consummation of the Closing.

     (c) The Closing Revenue Run-Rate shall be equal to or greater than 0.70 multiplied by the Base Revenue Run-Rate.

     (d) All Seller Required Approvals, Transferred Entities Required Approvals and Buyer Required Approvals set forth on Section 10.01(d) of the Seller Disclosure Schedule and Section 10.01(d) of the Buyer Disclosure Schedule shall have been obtained and shall remain in full force and effect as of the Closing Date.

     Section 10.02. Conditions to Obligation of Buyer. Subject to the last sentence of Section 2.04, the obligation of Buyer to consummate the Closing is subject to the satisfaction of the following further conditions:

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     (a) Seller shall have performed in all material respects all of its obligations hereunder required to be performed by it on or prior to the Closing Date.

     (b) The representations and warranties of Seller contained in (i) Sections 3.01, 3.02, 3.03, 3.04, 3.07, 3.09, 3.10 and 3.28 (disregarding all materiality and Van Kampen Material Adverse Effect or similar qualifications contained therein) shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such date (except for representations and warranties that are made as of a specific date, which representations and warranties shall be true in all material respects at and as of such specific date); and (ii) any other Section of this Agreement (disregarding all materiality and Van Kampen Material Adverse Effect or similar qualifications contained therein) shall be true at and as of the Closing Date, as if made at and as of such date (except for representations and warranties that are made as of a specific date, which representations and warranties shall be true at and as of such specific date), with only such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Van Kampen Material Adverse Effect.

     (c) Buyer shall have received a certificate signed by any executive officer of Seller to the effect that the conditions specified in Sections 10.02(a) and 10.02(b) have been fulfilled.

     (d) So long as Seller has not exercised its rights under Section 7.11, Buyer shall have received an opinion of Wachtell, Lipton, Rosen & Katz in form and substance reasonably satisfactory to Buyer, on the basis of certain facts, representations and assumptions set forth in such opinion, dated the Closing Date, to the effect that the Merger will be treated for federal income tax purposes as a reorganization qualifying under the provisions of Section 368(a) of the Code. In rendering such opinion, Wachtell, Lipton, Rosen & Katz shall be entitled to require and rely upon customary representations of officers of Seller and Buyer.

     (e) Buyer shall have received a duly executed certificate of Seller and each Subsidiary of Seller that is not a foreign Person and that transfers Purchased Assets, dated as of the Closing Date, certifying under penalties of perjury that Seller and each such Subsidiary is not a foreign Person within the meaning of Section 1445(f)(3) of the Code, substantially in the form of the sample certification set forth in Treasury Regulation Section 1.1445-2(b)(2)(iv)(B).

     (f) Seller and its applicable Affiliates shall have executed and delivered the Ancillary Agreements.

     (g) Seller shall have delivered to Buyer the audited December 31, 2008, unaudited June 30, 2009 and (if the Closing occurs after May 15, 2010) audited December 31, 2009 financial statements and audit reports contemplated by Section 5.02(c)(i)(A) and (B) and, other than as described on Section 10.02(g) of the Seller Disclosure Schedule, such financial statements shall not differ from the

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Financial Statements in any manner that would reasonably be expected to have a material adverse effect on the Van Kampen Business, taken as a whole.

     Section 10.03. Conditions to Obligation of Seller. The obligation of Seller to consummate the Closing is subject to the satisfaction of the following further conditions:

     (a) Buyer shall have performed in all material respects all of its obligations hereunder required to be performed by it on or prior to the Closing Date.

     (b) The representations and warranties of Buyer contained in (i) Sections 4.01, 4.02, 4.03, 4.06, 4.07, 4.18 and 4.21 (disregarding all materiality and Buyer Material Adverse Effect or similar qualifications contained therein) shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such date (except for representations and warranties that are made as of a specific date, which representations and warranties shall be true in all material respects at and as of such specific date); and (ii) any other Section of this Agreement (disregarding all materiality and Buyer Material Adverse Effect or similar qualifications contained therein) shall be true at and as of the Closing Date, as if made at and as of such date (except for representations and warranties that are made as of a specific date, which representations and warranties shall be true at and as of such specific date), with only such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

     (c) Seller shall have received a certificate signed by any executive officer of Buyer to the effect that the conditions specified in Sections 10.03(a) and 10.03(b) have been fulfilled.

     (d) The shares of Buyer Stock representing the Aggregate Equity Consideration shall have been approved for listing on the NYSE, subject to official notice of issuance.

     (e) Seller shall have received a certificate signed by the general counsel of Buyer to the effect that Seller is unaware of any facts or circumstances that would reasonably be expected to prevent Buyer from performing its obligations under Section 6.06(a).

     (f) Buyer shall have fulfilled its obligations in accordance with Section 9.01(c)(ii).

     (g) So long as Seller has not exercised its rights under Section 7.11, Seller shall have received an opinion of Davis Polk & Wardwell LLP in form and substance reasonably satisfactory to Seller, on the basis of certain facts, representations and assumptions set forth in such opinion, dated the Closing Date, to the effect that the Merger will be treated for federal income tax purposes as a reorganization qualifying under the provision of Section 368(a) of the Code. In

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rendering such opinion, Davis Polk & Wardwell LLP shall be entitled to require and rely upon customary representations of officers of Seller and Buyer.

     (h) Buyer and its applicable Affiliates shall have executed and delivered the Ancillary Agreements.

     (i) At least 75% of the board of trustees or board of directors (if any), as applicable, of (i) each ‘40 Act Fund (that is not a Sub-Advised Fund) shall not be “interested persons” (as that term is defined in the Investment Company Act and interpreted by the SEC) of (A) the investment adviser to such ‘40 Act Fund or (B) the Person that will be the investment adviser to such ‘40 Act Fund immediately following the Closing and (ii) each ‘40 Act Fund that is a Sub-Advised Fund shall not be “interested persons” (as that term is defined in the Investment Company Act and interpreted by the SEC) of (A) the Van Kampen Business sub-adviser to such ‘40 Act Fund or (B) the Van Kampen Business sub-adviser (or such other sub-adviser substituted for such Van Kampen Business sub-adviser in connection with the transactions contemplated by this Agreement) to such ‘40 Act Fund immediately following the Closing.

ARTICLE 11
Survival; Indemnification

     Section 11.01. Survival. The representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing until March 31, 2011; provided that (i) the representations and warranties contained in Sections 3.01, 3.02, 3.03, 3.04, 3.07, 3.09, 3.10, 3.28, 4.01, 4.02, 4.03, 4.06, 4.07, 4.18 and 4.21 (the “Fundamental Representations”) shall survive indefinitely or until the latest date permitted by applicable Law, and (ii) except as otherwise set forth in Section 8.10, with respect to Section 3.13(e), the representations and warranties contained in Section 3.13 shall not survive the Closing. The covenants and agreements of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing indefinitely or for the shorter period explicitly specified therein, except that for such covenants and agreements that survive for such shorter period, breaches thereof shall survive indefinitely or until the latest date permitted by applicable Law. Notwithstanding the preceding sentences, any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if written notice of the inaccuracy or breach thereof giving rise to such right of indemnity (setting forth the basis therefor in reasonable detail) shall have been given to the party against whom such indemnity may be sought prior to such time, and such claim is pursued hereunder within a reasonable time period thereafter.

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     Section 11.02. Indemnification.

     (a) Effective at and after the Closing, Seller hereby indemnifies Buyer and its Affiliates and their respective directors, officers, employees, stockholders, agents, representatives, successors and assigns (collectively, the “Buyer Indemnified Parties”) against and agrees to hold each of them harmless from any and all damage, loss and expense (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding whether involving a third party claim or a claim solely between the parties hereto (“Damages”) actually suffered or incurred by a Buyer Indemnified Party arising out of or relating to:

     (i) any misrepresentation or breach of a representation or warranty, read for purposes of this Article 11 without reference to Van Kampen Material Adverse Effect, Buyer Material Adverse Effect, materiality or similar qualifications, except where Van Kampen Material Adverse Effect, Buyer Material Adverse Effect or materiality is referred to in Sections 3.08(b) (first sentence only), 3.11, 3.12, 3.14(a), 3.16(a), 3.16(e), 3.18 (other than the references to “Van Kampen Material Adverse Effect”), 3.19, 3.20(b) (first sentence only), 3.20(h) (other than the references to “Van Kampen Material Adverse Effect”), 3.22(d) (other than the references to “Van Kampen Material Adverse Effect”), 3.22(f) (other than the references to “Van Kampen Material Adverse Effect”), 3.22(h) (other than the references to “Van Kampen Material Adverse Effect), 3.22(i) (other than the references to “in all material respects”), 3.27, 3.29 (other than the references to “in all material respects”), 3.30, 3.32, 4.08 (last sentence only), 4.10, 4.14, 4.16 and 4.20 (other than the references to “Buyer Material Adverse Effect”) (each such misrepresentation or breach of a representation or warranty, a “Warranty Breach”) made by Seller pursuant to this Agreement (excluding any representation or warranty contained in Section 3.13, other than Section 3.13(e)); provided that, with respect to indemnification by Seller for Warranty Breaches pursuant to this Section 11.02(a)(i), the following shall apply (other than Warranty Breaches of any of the Fundamental Representations, for which none of the ensuing clauses (A) through (C) shall apply):

     (A) Seller shall not be liable for any claim (or series of related claims) for indemnification where the amount of Damages with respect to such claim (or related claims) does not exceed $100,000 (the “De Minimis Amount”) (and the amount of such Damages with respect to unrelated claims shall not be aggregated for purposes of clause (B));

     (B) Seller shall not be liable unless the aggregate amount of Damages with respect to such Warranty Breaches exceeds $50,000,000 (the “Deductible”) and then only to the extent of such excess; and

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     (C) Seller’s maximum liability for all such Warranty Breaches shall not exceed $250,000,000 (the “Cap”);

     (ii) any breach of covenant or agreement to be performed by Seller pursuant to this Agreement (other than a covenant or agreement made or to be performed pursuant to Article 8);

     (iii) (A) any liabilities expressly assumed or retained by Seller under Article 9, (B) all liabilities under any employee benefit or compensation plan, arrangement or agreement of Seller and its Affiliates (other than liabilities under the Assumed Benefit and Compensation Arrangements required to be assumed by Buyer pursuant to Section 9.02(j)) and (C) any Controlled Group Liability;

     (iv) any liabilities and obligations of any kind, character or description (whether known or unknown, accrued, absolute, contingent or otherwise and whether arising before, on or after the Closing Date) (A) of Seller or its Affiliates (other than the Transferred Entities) that are not Assumed Liabilities or (B) primarily relating to or arising from or under the Excluded Transferred Entity Business or the Excluded Payables; or

     (v) those matters listed on Section 11.02(a) of the Buyer Disclosure Schedule.

     (b) Effective at and after the Closing, Buyer hereby indemnifies Seller and its Affiliates and their respective directors, officers, employees, stockholders, agents, representatives, successors and assigns (collectively, the “Seller Indemnified Parties”) against and agrees to hold each of them harmless from any and all Damages actually suffered or incurred by a Seller Indemnified Party arising out of or relating to:

     (i) any Warranty Breach made by Buyer pursuant to this Agreement; provided that with respect to indemnification by Buyer for Warranty Breaches pursuant to this Section 11.02(b)(i), the following shall apply (other than Warranty Breaches of any of the Fundamental Representations, for which none of the ensuing clauses (A) through (C) shall apply):

     (A) Buyer shall not be liable for any claim (or series of related claims) for indemnification where the amount of Damages with respect to such claim (or related claims) does not exceed the De Minimis Amount (and the amount of such Damages with respect to unrelated claims shall not be aggregated for purposes of clause (B));

     (B) Buyer shall not be liable unless the aggregate amount of Damages with respect to such Warranty Breaches

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exceeds the Deductible and then only to the extent of such excess; and

     (C) Buyer’s maximum liability for all such Warranty Breaches shall not exceed the Cap;

     (ii) any breach of covenant or agreement to be performed by Buyer pursuant to this Agreement (other than covenant or agreement made or to be performed pursuant to Article 8); or

     (iii) any and all Assumed Liabilities.

     (c) For tax purposes, any indemnification payments made pursuant to this Section 11.02 or Section 8.09 shall be treated as an adjustment to the Aggregate Purchase Price.

     Section 11.03. Third Party Claim Procedures. (a) The party seeking indemnification under Section 11.02 (the “Indemnified Party”) agrees to give prompt notice in writing to the party against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any claim or the commencement of any suit, action or proceeding by any third party (“Third Party Claim”) in respect of which indemnity may be sought under such Section. Such notice shall set forth in reasonable detail such Third Party Claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have prejudiced the Indemnifying Party.

     (b) Except as provided below, the Indemnifying Party shall be entitled to control and select counsel (subject to the Indemnified Party’s right to reasonably object) for such defense at its expense.

     (c) If the Indemnifying Party shall assume the control of the defense of any Third Party Claim, (i) the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any settlement of such Third Party Claim, if the settlement does not release the Indemnified Party from all liabilities and obligations with respect to such Third Party Claim, the settlement is in excess of the maximum liability set forth in Section 11.02, or the settlement imposes injunctive or other equitable relief against the Indemnified Party and (ii) the Indemnified Party shall be entitled to participate in the defense of any Third Party Claim and to employ separate counsel of its choice for such purpose. The fees and expenses of such separate counsel shall be paid by the Indemnified Party. Notwithstanding the foregoing, (i) the Indemnifying Party shall not be entitled to assume such control, and shall be responsible for the fees and expenses of the Indemnified Party’s counsel, if the Indemnifying Party shall have failed, within twenty (20) Business Days after receipt of a Notice in respect of the applicable Third Party Claim, to

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assume the defense of such claim or to notify the Indemnified Party in writing that it will assume the defense of such claim and (ii) the Indemnifying Party shall be responsible for the fees and expenses of the Indemnified Party’s counsel if (A) the named parties to any such action (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party and such Indemnified Party shall have been advised in writing by counsel that there may be one or more legal defenses available to the Indemnified Party which are not available to, or the assertion of which would be adverse to the interests of, the Indemnifying Party or (B) the Indemnified Party shall have been advised in writing by counsel that the assumption of such defense by the Indemnifying Party would be inappropriate due to an actual or potential conflict of interest absent representation by the Indemnified Party by its own counsel (provided that the Indemnifying Party shall not be liable for the fees and expenses of more than one firm of counsel for all Indemnified Parties, other than local counsel).

     (d) Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.

     Section 11.04. Direct Claim Procedures. In the event an Indemnified Party has a claim for indemnity under Section 11.02 against an Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party agrees to give prompt notice in writing of such claim to the Indemnifying Party. Such notice shall set forth in reasonable detail such claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have prejudiced the Indemnifying Party.

     Section 11.05. Calculation of Damages. (a) The amount of any Damages payable under Section 11.02 by the Indemnifying Party shall be net of (i) any amounts actually recovered by the Indemnified Party under applicable insurance policies or from any other Person alleged to be responsible therefor (net of any deductible or any expenses incurred in securing such recovery), and (ii) any Tax benefit arising from the incurrence or payment of any such Damages, but shall be netted against any Damages payable under Section 11.02 by the Indemnifying Party, or repaid by the Indemnified Party, only if, as and when such Tax benefit is actually realized in cash or a reduction in Taxes otherwise due. For purposes of clause (ii) of the preceding sentence, the second through eighth sentences of Section 9.07(b) shall apply mutatis mutandis. If the Indemnified Party receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount

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received by the Indemnified Party, net of any deductible or expenses incurred by such Indemnified Party in collecting such amount.

     (b) The Indemnifying Party shall not be liable under Section 11.02 for any (i) punitive Damages (except to the extent included in any Third Party Claim) or (ii) consequential Damages, including for lost profits, that, in the case of this clause (ii), are remote or not reasonably foreseeable (except to the extent included in any Third Party Claim).

     (c) Each Indemnified Party shall use reasonable efforts to collect any amounts available under insurance coverage for any Damages payable under Section 11.02, provided that the expenses of such efforts shall be borne by the Indemnifying Party and such efforts will not limit the timing or amount of Damages payable under Section 11.02 during pendency of such insurance claims.

     Section 11.06. Assignment of Claims. If the Indemnified Party receives any payment from an Indemnifying Party in respect of any Damages pursuant to Section 11.02 and the Indemnified Party could have recovered all or a part of such Damages from a third party that is not a current or former client, customer, employee, officer or director of Buyer and its Affiliates (a “Potential Contributor”) based on the underlying Claim asserted against the Indemnifying Party, the Indemnified Party shall, to the extent permitted by applicable Law or contract, assign such of its rights to proceed against the Potential Contributor as are necessary to permit the Indemnifying Party to recover from the Potential Contributor the amount of such payment.

     Section 11.07. Exclusivity. After the Closing, Section 11.02 and Section 13.12 will provide the exclusive remedy for any misrepresentation, breach of warranty, covenant or other agreement (other than those contained in Sections 2.05, 2.06, 5.08 and 8.09) or other claim arising out of this Agreement or the transactions contemplated hereby, except in the case of common law fraud relating to claims made in respect of the representations or warranties contained herein.

ARTICLE 12
Termination

     Section 12.01. Grounds for Termination. This Agreement may be terminated at any time prior to the Closing:

     (a) by mutual written agreement of Seller and Buyer;

     (b) by either Seller or Buyer if the Closing shall not have been consummated on or before August 31, 2010; provided that the right to terminate this Agreement pursuant to this Section 12.01(b) shall not be available to any

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party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated by such date

     (c) by either Seller or Buyer if consummation of the transactions contemplated by this Agreement would violate any nonappealable final order, decree or judgment of any Government Entity having competent jurisdiction.

The party desiring to terminate this Agreement pursuant to Section 12.01(b) or Section 12.01(c) shall give notice of such termination to the other party.

     Section 12.02. Effect of Termination. If this Agreement is terminated as permitted by Section 12.01, such termination shall be without liability of either party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other party to this Agreement; provided that, if such termination shall result from the intentional (i) failure of either party to fulfill a condition to the performance of the obligations of the other party or (ii) failure to perform a covenant or agreement contained in this Agreement, such party shall be fully liable for any and all Damages incurred or suffered by the other party as a result of any intentional failure or breach. The provisions of this Section 12.02 and Sections 7.13, 13.03, 13.05, 13.06, 13.07, and 13.09 and the Confidentiality Agreement shall survive any termination hereof pursuant to Section 12.01.

ARTICLE 13
Miscellaneous

     Section 13.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including by facsimile transmission or e-mail) and shall be given,

     if to Buyer, to:

Invesco Ltd.
1555 Peachtree Street NE
Atlanta, Georgia 30309
Attention: Kevin M. Carome
Fax: (404) 962-8357
E-mail: kevin.carome@invesco.com

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

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Nicholas G. Demmo

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Fax: (212) 403-2000
E-mail: NGDemmo@wlrk.com

     if to Seller, to:

Morgan Stanley
1585 Broadway
New York, New York 10036
Attention: Arthur J. Lev
Fax: (212) 507-6976
E-mail: arthur.lev@morganstanley.com

Morgan Stanley
1221 Avenue of the Americas
New York, New York 10020
Attention: Martin Cohen
Fax: (212) 507-3334
Email: martin.cohen@morganstanley.com

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

Davis Polk & Wardwell llp
450 Lexington Avenue
New York, New York 10017
Attention: Louis L. Goldberg
                John D. Amorosi
Fax: (212) 450-3800
E-mail:louis.goldberg@davispolk.com
               john.amorosi@davispolk.com

or such other address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

     Section 13.02. Amendments and Waivers. (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.

     (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of

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any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.

     Section 13.03. Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided that Buyer and Seller shall each bear and pay 50% of the costs and expenses incurred in connection with seeking and obtaining the consents of Clients pursuant to Section 7.05, including in connection with the filing, printing and mailing of notices, proxy solicitation materials and other communications in connection therewith.

     Section 13.04. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns subject to the following sentence. No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto provided that Buyer may assign any of its rights and obligations under this Agreement to a wholly-owned Subsidiary of Buyer; provided further that no such assignment by Buyer shall relieve Buyer of any of its obligations hereunder.

     Section 13.05. Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without regard to the conflicts of law rules of such state.

     Section 13.06. Jurisdiction. (a) The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought exclusively in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 13.01 shall be deemed effective service of process on such party.

     (b) EACH OF BUYER AND SELLER HEREBY IRREVOCABLY DESIGNATES CORPORATION TRUST COMPANY (IN SUCH CAPACITY, THE “PROCESS AGENT”), WITH AN OFFICE AT 1209 ORANGE STREET, CITY OF WILMINGTON, COUNTY OF NEW CASTLE, DELAWARE 19801 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON

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ITS BEHALF SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT, AND SUCH SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT; PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY THEREOF TO EACH OTHER SUCH PARTY IN THE MANNER PROVIDED IN SECTION 13.01 OF THIS AGREEMENT. EACH PARTY SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT SUCH PARTY WILL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN WILMINGTON, DELAWARE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. EACH PARTY EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF DELAWARE AND OF THE UNITED STATES OF AMERICA.

     Section 13.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 13.08. Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

     Section 13.09. Entire Agreement. This Agreement, the Ancillary Agreements and the Confidentiality Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

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     Section 13.10. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Government Entity to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

     Section 13.11. Disclosure Schedules. The parties hereto agree that any reference in a particular Section of either the Seller Disclosure Schedule or the Buyer Disclosure Schedule shall only be deemed to be an exception to (or, as applicable, a disclosure for purposes of) (a) the representations and warranties (or covenants, as applicable) of the relevant party that are contained in the corresponding Section of this Agreement and (b) any other representations and warranties of such party that is contained in this Agreement, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) such representations and warranties would be readily apparent to a reasonable person who has read that reference and such representations and warranties, without any independent knowledge on the part of the reader regarding the matter(s) so disclosed. The parties acknowledge and agree that (i) the Schedules to this Agreement may include certain items and information solely for informational purposes for the convenience of Buyer or Seller, as applicable and (ii) the disclosure by Seller or Buyer, as applicable of any matter in the Schedules shall not be deemed to constitute an acknowledgment by Seller or Buyer, as applicable that the matter is required to be disclosed by the terms of this Agreement or that the matter is material.

     Section 13.12. Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions or other equitable relief to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any court set forth in Section 13.06, in addition to any other remedy to which they are entitled at Law or in equity.

154

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

INVESCO LTD.
By:
	Name:
	Title:

MORGAN STANLEY
By:
	Name:
	Title:

[Signature Page to Transaction Agreement]

155

EX-31.1

Exhibit 31.1

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Martin L. Flanagan, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Invesco Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

October 30, 2009
	/s/ Martin L. Flanagan Martin L. Flanagan
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Loren M. Starr, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Invesco Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

October 30, 2009
	/s/ Loren M. Starr Loren M. Starr
	Senior Managing Director and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF MARTIN L. FLANAGAN
PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Invesco Ltd.’s (the “Company”) Quarterly Report on Form 10-Q for the period ended September 30, 2009 (the “Report”), I, Martin L. Flanagan, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

October 30, 2009
	/s/ Martin L. Flanagan Martin L. Flanagan
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF LOREN M. STARR
PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Invesco Ltd.’s (the “Company”) Quarterly Report on Form 10-Q for the period ended September 30, 2009 (the “Report”), I, Loren M. Starr, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

October 30, 2009
	/s/ Loren M. Starr Loren M. Starr
	Senior Managing Director and Chief Financial Officer