DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 30th day of Septmeber, 1997 between INVESCO
TAX-FREE INCOME FUNDS, INC., a Maryland corporation (the "Fund"), and INVESCO
DISTRIBUTORS, INC., a Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end management
investment company and currently has one class of shares (the "Shares") which is
divided into two series, and which may be divided into additional series (the
"Series"), each representing an interest in a separate portfolio of investments,
and it is in the interest of the Fund to offer the Shares for sale continuously;
and
WHEREAS, the Underwriter is engaged in the business of selling shares of
investment companies either directly to investors or through other securities
dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into an agreement with
each other with respect to the continuous offering of the Shares of each Series
in order to promote growth of the Fund and facilitate the distribution of the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the distribution
of Shares of each Series in jurisdictions wherein such Shares legally may be
offered for sale; provided, however, that the Fund in its absolute discretion
may (a) issue or sell Shares of each Series directly to purchasers, or (b) issue
or sell Shares of a particular Series to the shareholders of any other Series or
to the shareholders of any other investment company, for which the Underwriter
or any affiliate thereof shall act as exclusive distributor, who wish to
exchange all or a portion of their investment in Shares of such Series or in
shares of such other investment company for the Shares of a particular Series.
Notwithstanding any other provision hereof, the Fund may terminate, suspend or
withdraw the offering of Shares whenever, in its sole discretion, it deems such
action to be desirable. The Fund reserves the right to reject any subscription
in whole or in part for any reason.
2. The Underwriter hereby agrees to serve as agent for the distribution of
the Shares and agrees that it will use its best efforts with reasonable
promptness to sell such part of the authorized Shares remaining unissued as from
time to time shall be effectively registered under the Securities Act of 1933,
as amended (the "1933 Act"), at such prices and on such terms as hereinafter set
forth, all subject to applicable federal and state securities laws and
regulations. Nothing herein shall be construed to prohibit the Underwriter from
engaging in other related or unrelated businesses.
3. In addition to serving as the Fund's agent in the distribution of the
Shares, the Underwriter shall also provide to the holders of the Shares certain
maintenance, support or similar services ("Shareholder Services"). Such services
shall include, without limitation, answering routine shareholder inquiries
regarding the Fund, assisting shareholders in considering whether to change
dividend options and helping to effectuate such changes, arranging for bank
wires, and providing such other services as the Fund may reasonably request from
time to time. It is expressly understood that the Underwriter or the Fund may
enter into one or more agreements with third parties pursuant to which such
third parties may provide the Shareholder Services provided for in this
paragraph. Nothing herein shall be construed to impose upon the Underwriter any
duty or expense in connection with the services of any registrar, transfer agent
or custodian appointed by the Fund, the computation of the asset value or
offering price of Shares, the preparation and distribution of notices of
meetings, proxy soliciting material, annual and periodic reports, dividends and
dividend notices, or any other responsibility of the Fund.
4. Except as otherwise specifically provided for in this Agreement, the
Underwriter shall sell the Shares directly to purchasers, or through qualified
broker-dealers or others, in such manner, not inconsistent with the provisions
hereof and the then effective Registration Statement of the Fund under the 1933
Act (the "Registration Statement") and related Prospectus (the "Prospectus") and
Statement of Additional Information ("SAI") of the Fund as the Underwriter may
determine from time to time; provided that no broker-dealer or other person
shall be appointed or authorized to act as agent of the Fund without the prior
consent of the directors (the "Directors") of the Fund. The Underwriter will
require each broker-dealer to conform to the provisions hereof and of the
Registration Statement (and related Prospectus and SAI) at the time in effect
under the 1933 Act with respect to the public offering price of the Shares of
any Series. The Fund will have no obligation to pay any commissions or other
remuneration to such broker-dealers.
5. The Shares of each Series offered for sale or sold by the Underwriter
shall be offered or sold at the net asset value per share determined in
accordance with the then current Prospectus and/or SAI relating to the sale of
the Shares of the appropriate Series except as departure from such prices shall
be permitted by the then current Prospectus and/or SAI of the Fund, in
accordance with applicable rules and regulations of the Securities and Exchange
Commission. The price the Fund shall receive for the Shares of each Series
purchased from the Fund shall be the net asset value per share of such Share,
determined in accordance with the Prospectus and/or SAI applicable to the sale
of the Shares of such Series.
6. Except as may be otherwise agreed to by the Fund, the Underwriter shall
be responsible for issuing and delivering such confirmations of sales made by it
pursuant to this Agreement as may be required; provided, however, that the
Underwriter or the Fund may utilize the services of other persons or entities
believed by it to be competent to perform such functions. Shares shall be
registered on the transfer books of the Fund in such names and denominations as
the Underwriter may specify.
7. The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of the Fund as
a broker-dealer where necessary or advisable) in such states as the Underwriter
may reasonably request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in the opinion of the
Directors of the Fund is unduly burdensome). The Underwriter, at its own
expense, will effect all qualifications of itself as broker or dealer, or
otherwise, under all applicable state or Federal laws required in order that the
Shares may be sold in such states or jurisdictions as the Fund may reasonably
request.
8. The Fund shall prepare and furnish to the Underwriter from time to time
the most recent form of the Prospectus and/or SAI of the Fund and/or of each
Series of the Fund. The Fund authorizes the Underwriter to use the Prospectus
and/or SAI, in the forms furnished to the Underwriter from time to time, in
connection with the sale of the Shares of the Fund and/or of each Series of the
Fund. The Fund will furnish to the Underwriter from time to time such
information with respect to the Fund, each Series, and the Shares as the
Underwriter may reasonably request for use in connection with the sale of the
Shares. The Underwriter agrees that it will not use or distribute or authorize
the use, distribution or dissemination by broker-dealers or others in connection
with the sale of the Shares any statements, other than those contained in a
current Prospectus and/or SAI of the Fund or applicable Series, except such
supplemental literature or advertising as shall be lawful under Federal and
state securities laws and regulations, and that it will promptly furnish the
Fund with copies of all such material.
9. The Underwriter will not make, or authorize any broker-dealers or others
to make any short sales of the Shares of the Fund or otherwise make any sales of
the Shares unless such sales are made in accordance with a then current
Prospectus and/or SAI relating to the sale of the applicable Shares.
10. The Underwriter, as agent of and for the account of the Fund, may cause
the redemption or repurchase of the Shares at such prices and upon such terms
and conditions as shall be specified in a then current Prospectus and/or SAI. In
selling, redeeming or repurchasing the Shares for the account of the Fund, the
Underwriter will in all respects conform to the requirements of all state and
federal laws and the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale, redemption or repurchase, as
the case may be. The Underwriter will observe and be bound by all the provisions
of the Articles of Incorporation or Bylaws of the Fund and of any provisions in
the Registration Statement, Prospectus and SAI, as such may be amended or
supplemented from time to time, notice of which shall have been given to the
Underwriter, which at the time in any way require, limit, restrict or prohibit
or otherwise regulate any action on the part of the Underwriter.
11. (a) The Fund shall indemnify, defend and hold harmless the Underwriter,
its officers and directors and any person who controls the Underwriter within
the meaning of the 1933 Act, from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any attorney fees incurred in connection
therewith) which the Underwriter, its officers and directors or any such
controlling person, may incur under the federal securities laws, the common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or any related Prospectus
and/or SAI or arising out of or based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Notwithstanding the foregoing, this indemnity agreement, to the extent that
it might require indemnity of the Underwriter or any person who is an officer,
director or controlling person of the Underwriter, shall not inure to the
benefit of the Underwriter or officer, director or controlling person thereof
unless a court of competent jurisdiction shall determine, or it shall have been
determined by controlling precedent, that such result would not be against
public policy as expressed in the federal securities laws and in no event shall
anything contained herein be so construed as to protect the Underwriter against
any liability to the Fund, the Directors or the Fund's shareholders to which the
Underwriter would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
This indemnity agreement is expressly conditioned upon the Fund's being
notified of any action brought against the Underwriter, its officers or
directors or any such controlling person, which notification shall be given by
letter or by telegram addressed to the Fund at its principal address in Denver,
Colorado and sent to the Fund by the person against whom such action is brought
within ten (10) days after the summons or other first legal process shall have
been served upon the Underwriter, its officers or directors or any such
controlling person. The failure to notify the Fund of any such action shall not
relieve the Fund from any liability which it may have to the person against whom
such action is brought by reason of any such alleged untrue statement or
omission otherwise than on account of the indemnity agreement contained in this
paragraph. The Fund shall be entitled to assume the defense of any suit brought
to enforce such claim, demand, or liability, but in such case the defense shall
be conducted by counsel chosen by the Fund and approved by the Underwriter,
which approval shall not be unreasonably withheld. If the Fund elects to assume
the defense of any such suit and retain counsel approved by the Underwriter, the
defendant or defendants in such suit shall bear the fees and expenses of an
additional counsel obtained by any of them. Should the Fund elect not to assume
the defense of any such suit, or should the Underwriter not approve of counsel
chosen by the Fund, the Fund will reimburse the Underwriter, its officers and
directors or the controlling person or persons named as defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
the Underwriter or them. In addition, the Underwriter shall have the right to
employ counsel to represent it, its officers and directors and any such
controlling person who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriter against the Fund
hereunder if in the reasonable judgment of the Underwriter it is advisable for
the Underwriter, its officers and directors or such controlling person to be
represented by separate counsel, in which event the reasonable fees and expenses
of such separate counsel shall be borne by the Fund. This indemnity agreement
and the Fund's representations and warranties in this Agreement shall remain
operative and in full force and effect and shall survive the delivery of any of
the Shares as provided in this Agreement. This indemnity agreement shall inure
exclusively to the benefit of the Underwriter and its successors, the
Underwriter's officers and directors and their respective estates and any such
controlling person and their successors and estates. The Fund shall promptly
notify the Underwriter of the commencement of any litigation or proceeding
against it in connection with the issue and sale of the Shares.
(b) The Underwriter agrees to indemnify, defend and hold harmless the Fund,
its Directors and any person who controls the Fund within the meaning of the
1933 Act, from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any attorney fees incurred in connection therewith) which the
Fund, its Directors or any such controlling person may incur under the Federal
securities laws, the common law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its Directors or such controlling
person resulting from such claims or demands shall arise out of or be based upon
(a) any alleged untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Fund specifically for use in the
Registration Statement or any related Prospectus and/or SAI or shall arise out
of or be based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement or the
related Prospectus and/or SAI or necessary to make such information not
misleading and (b) any alleged act or omission on the Underwriter's part as the
Fund's agent that has not been expressly authorized by the Fund in writing.
Notwithstanding the foregoing, this indemnity agreement, to the extent that
it might require indemnity of the Fund or any Director or controlling person of
the Fund, shall not inure to the benefit of the Fund or Director or controlling
person thereof unless a court of competent jurisdiction shall determine, or it
shall have been determined by controlling precedent, that such result would not
be against public policy as expressed in the federal securities laws and in no
event shall anything contained herein be so construed as to protect any Director
of the Fund against any liability to the Fund or the Fund's shareholders to
which the Director would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence or reckless disregard of the duties involved in
the conduct of his office.
This indemnity agreement is expressly conditioned upon the Underwriter's
being notified of any action brought against the Fund, its Directors or any such
controlling person, which notification shall be given by letter or telegram
addressed to the Underwriter at its principal office in Denver, Colorado, and
sent to the Underwriter by the person against whom such action is brought,
within ten (10) days after the summons or other first legal process shall have
been served upon the Fund, its Directors or any such controlling person. The
failure to notify the Underwriter of any such action shall not relieve the
Underwriter from any liability which it may have to the person against whom such
action is brought by reason of any such alleged untrue statement or omission
otherwise than on account of the indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to assume the defense of any suit
brought to enforce such claim, demand, or liability, but in such case the
defense shall be conducted by counsel chosen by the Underwriter and approved by
the Fund, which approval shall not be unreasonably withheld. If the Underwriter
elects to assume the defense of any such suit and retain counsel approved by the
Fund, the defendant or defendants in such suit shall bear the fees and expenses
of an additional counsel obtained by any of them. Should the Underwriter elect
not to assume the defense of any such suit, or should the Fund not approve of
counsel chosen by the Underwriter, the Underwriter will reimburse the Fund, its
Directors or the controlling person or persons named as defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
the Fund or them. In addition, the Fund shall have the right to employ counsel
to represent it, its Directors and any such controlling person who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Fund against the Underwriter hereunder if in the reasonable
judgment of the Fund it is advisable for the Fund, its Directors or such
controlling person to be represented by separate counsel, in which event the
reasonable fees and expenses of such separate counsel shall be borne by the
Underwriter. This indemnity agreement and the Underwriter's representations and
warranties in this Agreement shall remain operative and in full force and effect
and shall survive the delivery of any of the Shares as provided in this
Agreement. This indemnity agreement shall inure exclusively to the benefit of
the Fund and its successors, the Fund's Directors and their respective estates
and any such controlling person and their successors and estates. The
Underwriter shall promptly notify the Fund of the commencement of any litigation
or proceeding against it in connection with the issue and sale of the Shares.
12. The Fund will pay or cause to be paid (a) expenses (including the fees
and disbursements of its own counsel) of any registration of the Shares under
the 1933 Act, as amended, (b) expenses incident to the issuance of the Shares,
and (c) expenses (including the fees and disbursements of its own counsel)
incurred in connection with the preparation, printing and distribution of the
Fund's Prospectuses, SAIs, and periodic and other reports sent to holders of the
Shares in their capacity as such. The Underwriter shall prepare and provide
necessary copies of all sales literature subject to the Fund's approval thereof.
13. This Agreement shall become effective as of the date it is approved by
a majority vote of the Directors of the Fund, as well as a majority vote of the
Directors who are not "interested persons" (as defined in the Investment Company
Act) of the Fund, and shall continue in effect for an initial term expiring
Septmeber 30, 1998, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually (a)(i) by a vote of the
Directors of the Fund or (ii) by a vote of a majority of the outstanding voting
securities of the Fund, and (b) by a vote of a majority of the Directors of the
Fund who are not "interested persons," as defined in the Investment Company Act,
of the Fund cast in person at a meeting for the purpose of voting on this
Agreement.
Either party hereto may terminate this Agreement on any date, without the
payment of a penalty, by giving the other party at least 60 days' prior written
notice of such termination specifying the date fixed therefor. In particular,
this Agreement may be terminated at any time, without payment of any penalty, by
vote of a majority of the members of the Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on not more than 60
days' written notice to the Underwriter.
Without prejudice to any other remedies of the Fund provided
for in this Agreement or otherwise, the Fund may terminate this Agreement at any
time immediately upon the Underwriter's failure to fulfill any of the
obligations of the Underwriter hereunder.
14. The Underwriter expressly agrees that, notwithstanding anything to the
contrary herein, or in any applicable law, it will look solely to the assets of
the Fund for any obligations of the Fund hereunder and nothing herein shall be
construed to create any personal liability on the part of any Director or any
shareholder of the Fund.
15. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 15, the definition of
"assignment" contained in the Investment Company Act shall be applied.
16. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
17. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the Fund and
the Underwriter and, if applicable, approved in the manner required by the
Investment Company Act.
18. Each provision of this Agreement is intended to be severable. If any
provision of this Agreement shall be held illegal or made invalid by a court
decision, statute, rule or otherwise, such illegality or invalidity shall not
affect the validity or enforceability of the remainder of this Agreement.
19. This Agreement and the application and interpretation hereof shall be
governed exclusively by the laws of the State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
Agreement to be executed on its behalf by an officer thereunto duly authorized
and the Underwriter has caused its corporate seal to be affixed as of the day
and year first above written.
INVESCO TAX-FREE INCOME FUNDS, INC.
By: /s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
President
ATTEST:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Secretary
INVESCO DISTRIBUTORS, INC.
ATTEST:
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxx Senior Vice President
--------------------------
Xxxx X. Xxxxx
Secretary
