AMENDED PLAN AND AGREEMENT OF DISTRIBUTION PURSUANT TO RULE 12b-1


      PLAN AND AGREEMENT made as of 30th day of September,  1997, by and between
INVESCO  INCOME  FUNDS,  INC., a Maryland  corporation  (hereinafter  called the
"Company"), and INVESCO DISTRIBUTORS, INC., a Delaware corporation ("INVESCO").

      WHEREAS,  the  Company  engages  in  business  as an  open-end  management
investment  company,  and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and

      WHEREAS,  the Company desires to finance the distribution of the shares of
each of its four classes or series of common stock,  each of which represents an
interest in a separate  portfolio of  investments,  together with any additional
such   classes  or  series  that  may   hereafter   be  offered  to  the  public
(individually,  a "Fund" and collectively, the "Funds"), in accordance with this
Plan and  Agreement  of  Distribution  pursuant to Rule 12b-1 under the Act (the
"Plan and Agreement"); and

      WHEREAS,  INVESCO desires to be retained to perform services in accordance
with such Plan and Agreement and on said terms and conditions; and

      WHEREAS,  this Plan and Agreement has been approved by a vote of the board
of directors of the Company,  including a majority of the  directors who are not
interested persons of the Company, as defined in the Act, and who have no direct
or indirect  financial interest in the operation of this Plan and Agreement (the
"Disinterested Directors") cast in person at a meeting called for the purpose of
voting on this Plan and Agreement;

      NOW,  THEREFORE,  the Company  hereby adopts the Plan set forth herein and
the Company and INVESCO hereby enter into this Agreement pursuant to the Plan in
accordance  with the  requirements  of Rule 12b-1 under the Act, and provide and
agree as follows:

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      1.    The Plan is defined as those  provisions of this document by which
            the  Company  adopts a Plan  pursuant to Rule 12b- 1 under the Act
            and  authorizes  payments as described  herein.  The  Agreement is
            defined as those  provisions of this document by which the Company
            retains  INVESCO to provide  distribution  services  beyond  those
            required  by  the  General  Distribution   Agreement  between  the
            parties,  as are  described  herein.  The  Company  may retain the
            Plan  notwithstanding  termination of the  Agreement.  Termination
            of the Plan  will  automatically  terminate  the  Agreement.  Each
            Fund is hereby  authorized to utilize the assets of the Company to
            finance certain  activities in connection with distribution of the
            Company's shares.

      2.    Subject to the supervision of the board of directors,  the Company
            hereby retains  INVESCO to promote the  distribution  of shares of
            each  of  the  Funds  by   providing   services  and  engaging  in
            activities beyond those specifically  required by the Distribution
            Agreement  between the Company and INVESCO and to provide  related
            services.  The  activities  and services to be provided by INVESCO
            hereunder  shall  include  one or more of the  following:  (a) the
            payment  of   compensation   (including   trail   commissions  and
            incentive   compensation)   to   securities   dealers,   financial
            institutions   and  other   organizations,   which   may   include
            INVESCO-affiliated   companies,   that  render   distribution  and
            administrative  services in connection  with the  distribution  of
            the  shares  of  each  of  the  Funds;   (b)  the   printing   and
            distribution of reports and  prospectuses for the use of potential
            investors in each Fund;  (c) the  preparing  and  distributing  of
            sales  literature;  (d) the providing of advertising  and engaging
            in   other   promotional   activities,   including   direct   mail
            solicitation,  and  television,  radio,  newspaper and other media
            advertisements;  and (e) the providing of such other  services and
            activities  as may  from  time  to  time  be  agreed  upon  by the
            Company.   Such  reports  and   prospectuses,   sales  literature,
            advertising  and  promotional  activities  and other  services and
            activities may be prepared  and/or  conducted  either by INVESCO's
            own staff,  the staff of  INVESCO-affiliated  companies,  or third
            parties.

      3.    INVESCO  hereby  undertakes to use its best efforts to promote sales
            of shares of each of the Funds to  investors  by  engaging  in those
            activities  specified in paragraph (2) above as may be necessary and
            as it from time to time  believes  will best  further  sales of such
            shares.

<PAGE>
      4.    Each Fund is hereby authorized to expend,  out of its assets, on a
            monthly  basis,  and shall pay INVESCO to such  extent,  to enable
            INVESCO at its  discretion  to engage over a rolling  twelve-month
            period (or the rolling  twenty-four  month period specified below)
            in the activities and provide the services  specified in paragraph
            (2) above,  an amount  computed  at an annual rate of .25 of 1% of
            the  average  daily  net  assets  of the Fund  during  the  month.
            INVESCO  shall not be entitled  hereunder  to payment for overhead
            expenses  (overhead  expenses  defined as  customary  overhead not
            including   the  costs  of  INVESCO's   personnel   whose  primary
            responsibilities   involve   marketing  of  the  INVESCO   Funds).
            Payments  by a Fund  hereunder,  for  any  month,  may be  used to
            compensate  INVESCO  for: (a)  activities  engaged in and services
            provided  by INVESCO  during the  rolling  twelve-month  period in
            which  that  month  falls,  or  (b)  to the  extent  permitted  by
            applicable law, for any month during the first twenty-four  months
            following a Fund's commencement of operations,  activities engaged
            in  and   services   provided   by  INVESCO   during  the  rolling
            twenty-four  month  period  in which  that  month  falls,  and any
            obligations  incurred  by  INVESCO  in  excess  of the  limitation
            described  above  shall  not be paid  for out of Fund  assets.  No
            Fund  shall be  authorized  to expend,  for any  month,  a greater
            percentage of its assets to pay INVESCO for activities  engaged in
            and services  provided by INVESCO  during the rolling  twenty-four
            month  period  referred  to  above  than  it  would  otherwise  be
            authorized  to  expend  out  of its  assets  to  pay  INVESCO  for
            activities  engaged in and services provided by INVESCO during the
            rolling  twelve-month  period referred to above, and no Fund shall
            be authorized to expend,  for any month,  a greater  percentage of
            its assets to pay INVESCO for  activities  engaged in and services
            provided  by INVESCO  pursuant to the Plan and  Agreement  than it
            would  otherwise have been  authorized to expend out of its assets
            to  reimburse   INVESCO  for  expenditures   incurred  by  INVESCO
            pursuant  to  the  Plan  and  Agreement  as it  existed  prior  to
            February  5,  1997.  No  payments  will  be  made  by the  Company
            hereunder after the date of termination of the Plan and Agreement.

<PAGE>
      5.    To the extent  that  obligations  incurred  by  INVESCO out of its
            own  resources  to finance  any  activity  primarily  intended  to
            result  in  the  sale of  shares of a Fund, pursuant  to this Plan
            and  Agreement  or  otherwise, may  be  deemed  to constitute  the
            indirect use  of Fund  assets,  such  indirect use  of Fund assets
            is hereby  authorized  in addition  to, and  not  in  lieu of, any
            other payments authorized under this Plan and Agreement.

      6.    The  Treasurer of INVESCO  shall provide to the board of directors
            of the  Company,  at least  quarterly,  a  written  report  of all
            moneys spent by INVESCO on the activities  and services  specified
            in paragraph (2) above  pursuant to the Plan and  Agreement.  Each
            such report shall itemize the  activities  engaged in and services
            provided  by INVESCO to a Fund as  authorized  by the  penultimate
            sentence  of  paragraph  (4)  above.  Upon  request,  but no  less
            frequently  than  annually,  INVESCO shall provide to the board of
            directors of the Company such  information  as may  reasonably  be
            required for it to review the  continuing  appropriateness  of the
            Plan and Agreement.



<PAGE>


      7.    This Plan and Agreement  shall each become  effective  immediately
            since  the  predecessor   Plan  and  Agreement  had  already  been
            approved  by a  vote  of a  majority  of  the  outstanding  voting
            securities  of the  Company  as  defined  in the  Act,  and  shall
            continue in effect until  September 30, 1998 unless  terminated as
            provided   below.   Thereafter,   the  Plan  and  Agreement  shall
            continue  in  effect  from  year  to  year,   provided   that  the
            continuance  of each is  approved  at least  annually by a vote of
            the board of  directors  of the  Company,  including a majority of
            the  Disinterested  Directors,  cast in person at a meeting called
            for the  purpose  of voting on such  continuance.  The Plan may be
            terminated  at any time as to any Fund,  without  penalty,  by the
            vote of a majority of the  Disinterested  Directors or by the vote
            of a majority of the outstanding  voting  securities of that Fund.
            INVESCO,   or  the   Company,   by  vote  of  a  majority  of  the
            Disinterested  Directors  or of the  holders of a majority  of the
            outstanding  voting  securities  of the Fund,  may  terminate  the
            Agreement under this Plan as to such Fund,  without penalty,  upon
            30 days'  written  notice to the other  party.  In the event  that
            neither  INVESCO nor any  affiliate of INVESCO  serves the Company
            as  investment  adviser,  the agreement  with INVESCO  pursuant to
            this Plan shall  terminate  at such time.  The board of  directors
            may  determine  to approve a  continuance  of the Plan,  but not a
            continuance of the Agreement, hereunder.

      8.    So  long  as  the  Plan  remains  in  effect,  the  selection  and
            nomination  of persons to serve as  directors  of the  Company who
            are not "interested  persons" of the Company shall be committed to
            the  discretion  of the  directors  then  in  office  who  are not
            "interested  persons" of the Company.  However,  nothing contained
            herein shall  prevent the  participation  of other  persons in the
            selection and nomination  process,  provided that a final decision
            on any such  selection or nomination is within the  discretion of,
            and approved  by, a majority of the  directors of the Company then
            in office who are not "interested persons" of the Company.

      9.    This  Plan  may  not be amended to increase the amount to be spent
            by  a  Fund  hereunder  without  approval  of  a  majority  of the
            outstanding   voting   securities  of  that  Fund.   All  material
            amendments to the Plan and to the  Agreement  must be  approved by
            the  vote of the  board of directors  of the Company,  including a
            majority  of  the  Disinterested  Directors,  cast  in person at a
            meeting  called  for the  purpose of voting on such amendment.



<PAGE>


      10.   To the extent that this Plan and  Agreement  constitutes a Plan of
            Distribution  adopted  pursuant  to Rule  12b-1  under  the Act it
            shall  remain  in effect as such,  so as to  authorize  the use by
            each Fund of its assets in the  amounts and for the  purposes  set
            forth herein,  notwithstanding  the occurrence of an "assignment,"
            as defined by the Act and the rules  thereunder.  To the extent it
            constitutes  an  agreement  with  INVESCO  pursuant to a plan,  it
            shall terminate  automatically in the event of such  "assignment."
            Upon a termination  of the agreement  with INVESCO,  the Funds may
            continue  to make  payments  pursuant  to the Plan  only  upon the
            approval of a new agreement  under this Plan and Agreement,  which
            may  or  may  not be  with  INVESCO,  or  the  adoption  of  other
            arrangements  regarding  the use of the amounts  authorized  to be
            paid by the Funds  hereunder,  by the Company's board of directors
            in accordance with the procedures set forth in paragraph 7 above.

      11.   The Company shall  preserve  copies of this Plan and Agreement and
            all reports  made  pursuant to paragraph 6 hereof,  together  with
            minutes of all board of directors  meetings at which the adoption,
            amendment or continuance of the Plan were  considered  (describing
            the factors  considered and the basis for decision),  for a period
            of not  less  than  six  years  from  the  date of this  Plan  and
            Agreement,  or any such  reports or  minutes,  as the case may be,
            the first two years in an easily accessible place.

      12.   This Plan and Agreement  shall be construed in accordance with the
            laws  of the State of Colorado  and  applicable  provisions of the
            Act.  To the extent the applicable  laws of the State of Colorado,
            or   any   provisions   herein,   conflict   with  the  applicable
            provisions of the Act, the latter shall control.


      IN WITNESS  WHEREOF,  the parties  hereto have  executed  and  delivered
this Plan and Agreement on the 30th day of September, 1997.


                                          INVESCO INCOME FUNDS, INC.


                                          By:  /s/ Dan J. Hesser
                                               ------------------------
                                               Dan J. Hesser, President
ATTEST: /s/ Glen A. Payne
        ---------------------------
        Glen A. Payne, Secretary




                                          INVESCO DISTRIBUTORS, INC.


                                          By:  /s/ Ronald L. Grooms
                                               --------------------
                                               Ronald L. Grooms,
                                               Senior Vice President
ATTEST: /s/ Glen A. Payne
        ---------------------------
        Glen A. Payne, Secretary