DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 30th day of September, 1997 between INVESCO
DIVERSIFIED 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 one 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 September 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 DIVERSIFIED FUNDS, INC.
ATTEST:
By: /s/ Xxx X. Xxxxxx
-----------------
Xxx X. Xxxxxx
/s/ Xxxx X. Xxxxx President
-------------------------
Xxxx X. Xxxxx
Secretary
INVESCO DISTRIBUTORS, INC.
ATTEST:
By: /s/ Xxxxxx X. Xxxxxx
--------------------
/s/ Xxxx X. Xxxxx Xxxxxx X. Xxxxxx
-------------------------- Senior Vice President
Xxxx X. Xxxxx
Secretary
