MEMORANDUM OF CHANGES
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 181
The Prospectus filed with Amendment No. 1 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen Focus Portfolios, Series 181 on September 21, 1999. An effort has been
made to set forth below each of the major changes and also to reflect the same
by blacklining the marked counterparts of the Prospectus submitted with the
Amendment.
Cover Page. The date of the Prospectus has been completed.
Pages 2-3. "The Summary of Essential Financial Information" section and
"Fee Table" have been completed.
Pages 5-6. Revisions have been made and the portfolio has been completed.
Pages 7-9. The descriptions of the Security issuers have been completed.
Pages 10-11. The Report of Independent Certified Public Accountants and
Statement of Condition have been completed.
FILE NO. 333-85921
CIK #1025335
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact Name of Trust: VAN KAMPEN FOCUS PORTFOLIOS, SERIES 181
B. Name of Depositor: VAN KAMPEN FUNDS INC.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
D. Name and complete address of agents for service:
CHAPMAN AND CUTLER VAN KAMPEN FUNDS INC.
Attention: Mark J. Kneedy Attention: A. Thomas Smith III, General Counsel
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title of securities being registered: Units of proportionate interest
F. Approximate date of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT
/X/ Check box if it is proposed that this filing will become effective at 2:00
p.m. on September 21, 1999 pursuant to Rule 487.
Gruntal &Co.
Investment Advice Since 1880
E-Commerce Software Growth Trust, Series 1
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Van Kampen Focus Portfolios, Series 181 includes the unit investment trust
described above (the "Trust"). The Trust seeks to increase the value of your
Units by investing in a diversified portfolio of common stocks of companies
within the e-commerce and software industries. Of course, we cannot guarantee
that the Trust will achieve its objective.
September 21, 1999
You should read this prospectus and retain it for future reference.
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The Securities and Exchange Commission has not approved or disapproved of the
Units or passed upon the adequacy or accuracy of this prospectus. Any contrary
representation is a criminal offense.
Summary of Essential Financial Information
September 21, 1999
Public Offering Price
Aggregate value of Securities per Unit (1) $ 9.90
Sales charge 0.45
Less deferred sales charge 0.35
Public offering price per Unit (2) $ 10.00
Trust Information
Initial number of Units (3) 15,200
Aggregate value of Securities (1) $ 150,477
Redemption price per Unit (4) $ 9.87
General Information
Initial Date of Deposit September 21, 1999
Mandatory Termination Date September 21, 2003
Record Dates June 10 and December 10
Distribution Dates June 25 and December 25
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(1) Each Security is valued at the last closing sale price on its principal
trading exchange or, if not listed, at the last asked price on the day
before the Initial Date of Deposit. You will bear all or a portion of the
expenses incurred in organizing and offering your Trust. The Public
Offering Price includes the estimated amount of these costs. The Trustee
will deduct these expenses from your Trust at the end of the initial
offering period (approximately three months). The estimated amount is
described on the next page.
(2) The Public Offering Price will include any accumulated dividends or cash in
the Income or Capital Accounts.
(3) The number of Units may be adjusted so that the Public Offering Price per
Unit equals $10 at the Evaluation Time on the Initial Date of Deposit. The
number of Units and fractional interest of each Unit will increase or
decrease to the extent of any adjustment.
(4) The redemption price is reduced by any remaining deferred sales charge. See
"Rights of Unitholders--Redemption of Units". The redemption price includes
the estimated organizational and offering costs. The redemption price will
not include these costs after the initial offering period.
Fee Table
Transaction Fees (as % of offering price)
Initial sales charge (1)........................... 1.00%
Deferred sales charge (2).......................... 3.50%
----------
Maximum sales charge .............................. 4.50%
==========
Maximum sales charge on reinvested dividends....... 3.50%
==========
Estimated Organizational Costs per Unit (3)........ $ 0.02652
==========
Estimated Annual Expenses per Unit
Trustee's fee and operating expenses............... $ 0.01145
Evaluation fees.................................... $ 0.00250
Supervisory fees................................... $ 0.00250
----------
Estimated annual expenses per Unit................. $ 0.01645
==========
Estimated Costs Over TIme
One year........................................... $ 49
Three years........................................ $ 53
Five years......................................... $ 57
Ten years.......................................... N/A
This fee table is intended to assist you in understanding the costs that you
will bear and to present a comparison of fees. The "Estimated Costs Over Time"
example illustrates the expenses you would pay on a $1,000 investment assuming a
5% annual return and redemption at the end of each period. This example assumes
that you reinvest your Trust distributions at the end of each year. Of course,
you should not consider this example a representation of actual past or future
expenses or annual rate of return which may differ from those assumed for this
example. The sales charge and expenses are described under "Public Offering" and
"Trust Operating Expenses".
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(1) The initial sales charge is the difference between the maximum sales charge
and the deferred sales charge.
(2) The deferred sales charge is actually equal to $0.35 per Unit. This amount
will exceed the percentage above if the Public Offering Price per Unit
falls below $10 and will be less than the percentage above if the Public
Offering Price per Unit exceeds $10. The deferred sales charge accrues
daily from April 10, 2000 through September 9, 2000. The Trust pays a
proportionate amount of this charge on the 10th day of each month beginning
in the accrual period until paid in full.
(3) You will bear all or a portion of the expenses incurred in organizing and
offering your Trust. The Trustee will deduct the actual amount of these
expenses from your Trust at the end of the initial offering period.
E-Commerce Software Growth Trust
The Trust seeks to offer diversification and capital appreciation over time
by investing in e-commerce and software companies expected to benefit from the
growth in business-to-business e-commerce. Gruntal & Co., L.L.C. selected the
securities for the portfolio which, in their opinion, are well-positioned for
future growth and represent good investment opportunities in
business-to-business e-commerce.
The Internet is allowing people to share information and conduct business
electronically around the world. To keep up with the pace of the Internet,
e-commerce and software companies must bring new products and technologies to
market. Analysts at Gruntal & Co. believe that a number of factors have
facilitated the growth of the Internet and its commercial use, including:
o a large and growing base of personal computers in homes and
businesses;
o easier and cheaper Internet access;
o improvements in network infrastructure and bandwidth; and
o expanding availability of online content and commerce.
International Data Corporation (IDC) projects that the number of Internet
users worldwide could grow from an estimated 97 million users at the end of 1998
to an estimated 320 million by 2002. With this increase and the quality of
Internet content and development tools, the Internet has expanded from a medium
primarily used for publishing information to one enabling complex business
communications and commerce.
E-commerce Internet transactions have already seen significant growth in the
past year, particularly in the business-to-consumer market. Gruntal analysts
believe the worldwide business-to-business e-commerce market will exceed that of
the business-to-consumer market over the next five years. IDC projects the
worldwide Internet commerce market to grow from $50.4 billion in 1998 to $733.6
billion in 2002. Forrester Research, Inc., projects that Internet-based
business-to-business e-commerce could grow from $43 billion in 1998 to $1.3
trillion in 2003. If Forrester projections are realized, business-to-business
e-commerce would exceed business-to-consumer e-commerce by a factor of nine to
one in 2003.
E-commerce can revolutionize every aspect of the supply chain by enhancing
information flow, reducing product cycle times, lowering inventories and
increasing efficiency. To date, large-scale deployments of business-to-business
e-commerce systems have been constrained because of the lack of applications
that integrate end-users, resellers, distributors and manufacturers as well as
the preoccupation of most business with resolving the Y2K problem. However,
Gruntal analysts believe that many companies will devote large portions of their
information technology budgets to deploying business-to-business e-commerce
systems. Gruntal analysts expect business-to-business e-commerce to be a major
growth industry for the foreseeable future.
Gruntal analysts believe that the focus to implement e-commerce systems could
create significant opportunities for software companies. In their opinion, the
beneficiaries of this growth include companies providing database software,
decision support and analysis tools, web-based procurement solutions, customer
relationship management software, systems/network management software and
enterprise application integration companies.
Of course, we cannot guarantee that the Trust will achieve its objective or
that expectations of the e-commerce software industry will be realized. The
value of your Units may fall below the price you paid for the Units. You should
read the "Risk Factors"section before you invest.
<TABLE>
<CAPTION>
Portfolio
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Cost of
Number Market Value Dividend Securities
of Shares Name of Issuer (1) per Share (2) Yield to Trust (2)
---------- ----------------------------------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
34 Ariba, Inc. $ 134.500 0.00% $ 4,573.00
24 BroadVision, Inc. 127.625 0.00 3,063.00
+ 85 Business Objects S.A. 53.500 0.00 4,547.50
62 Clarify, Inc. 50.125 0.00 3,107.75
39 Commerce One, Inc. 125.000 0.00 4,875.00
156 Computer Associates International, Inc. 57.250 0.14 8,931.00
137 Diamond Technology Partners, Inc. 41.000 0.00 5,617.00
135 Digital River, Inc. 22.375 0.00 3,020.63
200 Entrust Technologies, Inc. 22.625 0.00 4,525.00
40 Exodus Communications, Inc. 74.750 0.00 2,990.00
376 Hyperion Solutions Corporation 20.438 0.00 7,684.50
147 i2 Technologies, Inc. 40.125 0.00 5,898.38
22 Inktomi Corporation 131.688 0.00 2,897.13
59 International Business Machines Corporation 130.875 0.37 7,721.63
53 Internet Capital Group, Inc. 97.500 0.00 5,167.50
163 InterWorld Corporation 38.750 0.00 6,316.25
349 Keane, Inc. 25.938 0.00 9,052.19
62 Microsoft Corporation 97.563 0.00 6,048.88
453 Network Associates, Inc. 19.375 0.00 8,776.88
378 New Era of Networks, Inc. 21.750 0.00 8,221.50
407 Novell, Inc. 21.625 0.00 8,801.38
170 Oracle Corporation 45.188 0.00 7,681.88
86 pcOrder.com, Inc. 35.875 0.00 3,085.25
41 Siebel Systems, Inc. 71.875 0.00 2,946.88
285 Sterling Commerce, Inc. 20.563 0.00 5,860.31
65 Sun Microsystems, Inc. 94.563 0.00 6,146.56
40 Vignette Corporation 73.000 0.00 2,920.00
---------- -------------
4,068 $ 150,476.98
========== =============
</TABLE>
Notes to Portfolio
(1) The Securities are initially represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited
with the Trustee. Contracts to acquire Securities were entered into on
September 20, 1999 and have a settlement date of September 23, 1999 (see
"The Trust").
(2) The market value of each Security is based on the closing sale price on the
applicable exchange or, if not listed, the last asked price on the day
prior to the Initial Date of Deposit. Other information regarding the
Securities, as of the Initial Date of Deposit, is as follows:
Profit
Cost to (Loss) To
Sponsor Sponsor
-------------- --------------
$ 150,477 $ --
"+" indicates that the stock is held in the form of American Depositary Receipts
or similar receipts.
"3" indicates that the stock is traded on a foreign securities exchange.
"#" indicates that the stock is a foreign common stock traded on a United States
securities exchange.
The Securities. A brief description of each of the issuers of the Securities
is listed below.
Ariba, Inc. Ariba, Inc. provides intranet- and Internet-based
business-to-business electronic commerce solutions for operating resources.
Operating resources include information technology and telecommunications
equipment, professional services, facilities and office equipment, and expense
items.
BroadVision, Inc. BroadVision, Inc. develops, markets, and supports
application software solutions. The company's solutions manage one-to-one
relationships for the extended enterprise. BroadVision's solutions enable
businesses to use the Internet as a platform to conduct commerce, offer online
financial services, provide self-service, and deliver targeted information.
Business Objects S.A. Business Objects S.A. develops, markets, and supports
integrated enterprise decision support software. The company's software allows
users to access, analyze, and share information derived from a variety of
sources. The BUSINESSOBJECTS software product is an integrated query, reporting,
and online analytical processing tool that operates in various operating
systems.
Clarify, Inc. Clarify, Inc. develops and provides enterprise-scale,
Internet-ready front office applications. The company's integrated front office
suite includes sales and marketing, customer service, field service and
logistics, quality assurance, and help desk applications. Clarify's products are
sold through offices in North America, Europe, and the Asia/Pacific region.
Commerce One, Inc. Commerce One, Inc. provides Web-based, enterprise
procurement solutions that link buying and supplying organizations into
real-time trading communities. The company's Commerce Chain Solution automates
the entire indirect goods and services supply chain.
Computer Associates International, Inc. Computer Associates International,
Inc. designs, develops, markets, licenses, and supports standardized computer
software products. The company's products are used with a variety of desktop,
midrange, and mainframe computers. Computer Associates offers various enterprise
systems management, information management, and business applications solutions
to a variety of organizations.
Diamond Technology Partners, Inc. Diamond Technology Partners, Inc. is a
management consulting firm that develops digital strategies which leverage
information technology. The company also manages the implementation of those
strategies. Diamond Technology serves clients in the financial services,
telecommunications, consumer products, utilities, insurance, and health care
industries.
Digital River, Inc. Digital River, Inc. provides comprehensive electronic
commerce outsourcing solutions to software publishers and online retailers. The
company also provides data mining and merchandising services to assist clients
in increasing Internet page view traffic to web sites.
Entrust Technologies, Inc. Entrust Technologies, Inc. develops, markets, and
sells products and services that allow enterprises to manage secure electronic
communications and transactions over networks. Networks include the Internet,
extranets, and intranets. The company's solution automates the management of
digital certificates through public key infrastructure technology.
Exodus Communications, Inc. Exodus Communications, Inc. provides Internet
system and network management solutions for enterprises with mission-critical
Internet operations. The company manages its operations through Internet data
centers located throughout the United States and a server hosting facility in
England. Exodus also provides, through a subsidiary, network and system security
consulting services.
Hyperion Solutions Corporation. Hyperion Solutions Corporation provides
analytic application software for reporting, analysis, modeling, and planning.
The Company's products include server, developer, and end-user tools. Hyperion
sells its products around the world.
i2 Technologies, Inc. i2 Technologies, Inc. provides supply chain management
software. The company's products are used to plan and schedule manufacturing and
related logistics, from raw materials procurement to customer delivery. i2's
product, "RHYTHM", allows customers to model supply chains and generate
integrated solutions to planning and scheduling problems.
Inktomi Corporation. Inktomi Corporation develops and markets scalable
software applications designed to enhance the performance and intelligence of
large-scale networks. The company's systems use parallel-processing technology
across clusters of workstations to deliver the speed and performance while
utilizing smaller workstations.
International Business Machines Corporation (IBM). International Business
Machines Corporation (IBM) provides customer solutions through the use of
advanced information technology. The company's solutions include technologies,
systems, products, services, software, and financing. IBM offers its products
through its global sales and distribution organization, as well as through a
variety of third party distributors and resellers.
Internet Capital Group, Inc. Internet Capital Group, Inc. is an Internet
holding company primarily involved in managing and operating a network of
business-to-business e-commerce companies.
InterWorld Corporation. InterWorld Corporation provides Internet commerce
software. The company's products enable manufacturers, distributors, and
retailers to conduct business over the Internet. InterWorld's Commerce Exchange
family of products includes a scalable platform, applications, tools, and
business adapters.
Keane, Inc. Keane, Inc. provides management and information technology
consulting, application software development and integration, application
management, and call center management services. The company provides its
services to corporations, government agencies, and healthcare facilities.
Microsoft Corporation. Microsoft Corporation develops, manufactures,
licenses, sells, and supports software products. The company offers operating
system software, server application software, business and consumer applications
software, software development tools, and Internet and intranet software.
Microsoft also develops the MSN network of Internet products and services.
Network Associates, Inc. Network Associates, Inc. develops and provides
software products that address network security and network management. The
company also offers a range of consumer-oriented security and management
software products to retail customers, including anti-virus, Internet
security/privacy, and desktop utilities software.
New Era of Networks, Inc. New Era of Networks, Inc. develops, markets, and
supports application integration software and services. The company's
architectural platform provides a structured software platform for the
integration and maintenance of disparate systems and applications.
Novell, Inc. Novell, Inc. provides directory-enabled networking software. The
company offers channel, consulting, developer, education, and technical support
programs. Novell sells its products to end users through licensing agreements as
well as through distributors and national retail chains.
Oracle Corporation. Oracle Corporation supplies software for enterprise
information management. The company offers databases and relational servers,
application development and decision support tools, and enterprise business
applications. Oracle's software runs on network computers, personal digital
assistants, set-top devices, workstations, PCs, minicomputers, mainframes, and
massively parallel computers.
pcOrder.com, Inc. pcOrder.com, Inc. provides Internet-based electronic
commerce solutions. The company's solutions enable the computer industry's
suppliers, resellers, and end-users to buy and sell computer products online.
Siebel Systems, Inc. Siebel Systems, Inc. supplies enterprise-class sales,
marketing, and customer service information systems. The company's customers
include organizations focused on increasing sales and service effectiveness in
field sales, service organizations, telesales, telemarketing, call centers, and
third-party resellers. Siebel designs, develops, and markets a web-based
application software product.
Sterling Commerce, Inc. Sterling Commerce, Inc. provides electronic commerce
products, services, and solutions worldwide. The company's customers include the
banking, healthcare, manufacturing, pharmaceutical, retail, telecommunications,
and transportation industries. Sterling has 16 direct sales offices, a
Pan-European support center, an Asian support and development center, and more
than 40 distributors.
Sun Microsystems, Inc. Sun Microsystems, Inc. provides products, services,
and support solutions for building and maintaining network computing
environments. The company sells scalable computer systems, high-speed
microprocessors, and a complete line of high-performance software for operating
network computing equipment and storage products. Sun also provides support,
education, and professional services.
Vignette Corporation. Vignette Corporation provides Internet relationship
management software products and services. The company's solutions enable mid-to
large-sized enterprises to develop and manage online customer relationships for
the purpose of increasing their web-based revenues and market share. Vignette
licenses its "StoryServer" software platform to clients worldwide in a variety
of industries.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of Van
Kampen Focus Portfolios, Series 181:
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen Focus Portfolios, Series 181 as of September 21, 1999.
The statement of condition and portfolio are the responsibility of the Sponsor.
Our responsibility is to express an opinion on such financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of an irrevocable letter of credit deposited to purchase securities
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen Focus Portfolios, Series
181 as of September 21, 1999 in conformity with generally accepted accounting
principles.
GRANT THORNTON LLP
Chicago, Illinois
September 21, 1999
STATEMENT OF CONDITION
As of September 21, 1999
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 150,477
-----------
Total $ 150,477
===========
LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $ 403
Deferred sales charge liability (3) 5,320
Interest of Unitholders--
Cost to investors (4) 152,000
Less: Gross underwriting commission
and organizational costs (2)(4)(5) 7,246
-----------
Net interest to Unitholders (4) 144,754
-----------
Total $ 150,477
===========
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(1) The value of the Securities is determined by Interactive Data Corporation
on the bases set forth under "Public Offering--Offering Price". The
contracts to purchase Securities are collateralized by an irrevocable
letter of credit which has been deposited with the Trustee.
(2) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the Trust.
The amount of these costs are set forth in the "Fee Table". A distribution
will be made as of the close of the initial offering period to an account
maintained by the Trustee from which this obligation of the investors will
be satisfied.
(3) Represents the amount of mandatory distributions from the Trust on the
bases set forth under "Public Offering".
(4) The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering-- Offering Price".
(5) Assumes the maximum sales charge.
THE TRUST
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The Trust was created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the date of
this Prospectus (the "Initial Date of Deposit"), among Van Kampen Funds Inc., as
Sponsor, Van Kampen Investment Advisory Corp., as Supervisor, The Bank of New
York, as Trustee, and American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator.
The Trust offers the opportunity to purchase Units representing proportionate
interests in a portfolio of actively traded equity securities. The Trust may be
an appropriate medium for investors who desire to participate in a portfolio of
common stocks with greater diversification than they might be able to acquire
individually.
On the Initial Date of Deposit, the Sponsor deposited delivery statements
relating to contracts for the purchase of the Securities and an irrevocable
letter of credit in the amount required for these purchases with the Trustee. In
exchange for these contracts the Trustee delivered to the Sponsor documentation
evidencing the ownership of Units of the Trust. Unless otherwise terminated as
provided in the Trust Agreement, the Trust will terminate on the Mandatory
Termination Date and any remaining Securities will be liquidated or distributed
by the Trustee within a reasonable time. As used in this Prospectus the term
"Securities" means the securities (including contracts to purchase these
securities) listed in "Portfolio" any additional securities deposited into the
Trust.
Additional Units may be issued at any time by depositing in the Trust (i)
additional Securities, (ii) contracts to purchase Securities together with cash
or irrevocable letters of credit or (iii) cash (or a letter of credit or the
equivalent) with instructions to purchase additional Securities. As additional
Units are issued by the Trust, the aggregate value of the Securities will be
increased and the fractional undivided interest represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits into the Trust
following the Initial Date of Deposit provided that the additional deposits will
be in amounts which will maintain, as nearly as practicable, the same percentage
relationship among the number of shares of each Security in the Trust's
portfolio that existed immediately prior to the subsequent deposit. Investors
may experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the deposit and the purchase of the Securities and because
the Trust will pay the associated brokerage or acquisition fees.
Each Unit initially offered represents an undivided interest in the Trust. To
the extent that any Units are redeemed by the Trustee or additional Units are
issued as a result of additional Securities being deposited by the Sponsor, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase or decrease accordingly, although the actual interest in the Trust
will remain unchanged. Units will remain outstanding until redeemed upon tender
to the Trustee by Unitholders, which may include the Sponsor, or until the
termination of the Trust Agreement.
The Trust consists of (a) the Securities (including contracts for the
purchase thereof) listed under the "Portfolio" as may continue to be held from
time to time in the Trust, (b) any additional Securities acquired and held by
the Trust pursuant to the provisions of the Trust Agreement and (c) any cash
held in the related Income and Capital Accounts. Neither the Sponsor nor the
Trustee shall be liable in any way for any failure in any of the Securities.
OBJECTIVES AND SECURITIES SELECTION
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The objective of the Trust is to provide capital appreciation by investing in
a portfolio of actively traded equity securities of companies within the
e-commerce and software industries. We cannot guarantee that the Trust will
achieve its objective. The Securities were selected by Gruntal & Co., L.L.C.
(the "Underwriter").
Vivek N. J. Rao primarily selected the stocks for the portfolio. Mr. Rao is a
Senior Vice President in Gruntal's Equity Research Department with primary
responsibility for covering the Software and Software Services industries with a
particular focus on Business-to-Business E-Commerce. With over 13 years
experience on Wall Street, Mr. Rao is frequently quoted in leading financial,
business and trade journals and also appears frequently on television.
Throughout his career, Mr. Rao has been focused on the high-technology industry
and has extensive knowledge and a broad-based perspective on the industry. Prior
to joining Gruntal, Mr. Rao worked for nine years at J. P. Morgan. He holds an
MBA from the University of Chicago and an MS in Engineering from the University
of Cincinnati.
The Underwriter uses the list of Securities in its independent capacity as an
investment adviser and distributes this information to various individuals and
entities. The Underwriter may recommend or effect transactions in the
Securities. This may have an adverse effect on the prices of the Securities.
This also may have an impact on the price the Trust pays for the Securities and
the price received upon Unit redemptions or Trust termination.
The Underwriter has acquired or may acquire the Securities for the Sponsor
and may benefit from doing so. The Underwriter acts as agent or principal in
connection with the purchase and sale of equity securities, including the
Securities, and may act as a market maker in the Securities. The Underwriter
also issues reports and makes recommendations on the Securities. The
Underwriter's research department, including the analyst that selected the
portfolio, will receive compensation based on the broker commissions generated
by research and/or sales of Units. The analyst that selected the portfolio may
trade the Securities in his personal accounts.
Investors should note that the above criteria were applied to the Securities
for inclusion in the Trust as of the Initial Date of Deposit. Subsequent to this
date, the Securities may no longer meet the above criteria. Should a Security no
longer meet the selection criteria, the Security generally will not be removed
from the Trust portfolio as a result thereof.
RISK FACTORS
- --------------------------------------------------------------------------------
Price Volatility. The Trust invests in common stocks. The value of Units will
fluctuate with the value of these stocks and may be more or less than the price
you originally paid for your Units. The market value of common stocks sometimes
moves up or down rapidly and unpredictably. Because the Trust is unmanaged, the
Trustee will not sell stocks in response to market fluctuations as is common in
managed investments. As with any investment, we cannot guarantee that the
performance of the Trust will be positive over any period of time.
Dividends. Common stocks represent ownership interests in the issuers and are
not obligations of the issuers. Accordingly, common stockholders have a right to
receive dividends only after the company has provided for payment of its
creditors, bondholders and preferred stockholders. Common stocks do not assure
dividend payments. Dividends are paid only when declared by an issuer's board of
directors and the amount of any dividend may vary over time.
Technology Issuers. The Trust invests significantly in technology companies.
Any negative impact on this industry will have a greater impact on the value of
Units than on a portfolio diversified over several industries. You should
understand the risks of these industries before you invest. These companies face
risks related to rapidly changing technology, rapid product obsolescence,
cyclical market patterns, evolving industry standards and frequent new product
introductions. An unexpected change in technology can have a significant
negative impact on a company. The failure of a company to introduce new products
or technologies or keep pace with rapidly changing technology, can have a
negative impact on the company's results. Technology stocks tend to experience
substantial price volatility and speculative trading. Announcements about new
products, technologies, operating results or marketing alliances can cause stock
prices to fluctuate dramatically. At times, however, extreme price and volume
fluctuations are unrelated to the operating performance of a company.
This can impact your ability to redeem your Units at a price equal to or greater
than what you paid.
The market for certain products may have only recently begun to develop, is
rapidly evolving or is characterized by increasing suppliers. Key components of
some technology products are available only from limited sources. This can
impact the cost of and ability to acquire these components. Some technology
companies serve highly concentrated customer bases with a limited number of
large customers. Any failure to meet the standard of these customers can result
in a significant loss or reduction in sales. Many products and technologies are
incorporated into other products. As a result, some companies are highly
dependent on the performance of other technology companies. We cannot guarantee
that these customers will continue to place additional orders or will place
orders in similar quantities as in the past.
Foreign Stocks. Because the Trust may invest in common stocks of foreign
companies, it involves additional risks that differ from an investment only in
domestic stocks. These risks include the risk of losses due to future political
and economic developments, international trade conditions, foreign withholding
taxes and restrictions on foreign investments and exchange of securities. The
Trust also involves the risk that fluctuations in exchange rates between the
U.S. dollar and foreign currencies may negatively affect the value of the
stocks. The Trust involves the risk that information about the stocks is not
publicly available or is inaccurate due to the absence of uniform accounting and
financial reporting standards. In addition, some foreign securities markets are
less liquid than U.S. markets. This could cause the Trust to buy stocks at a
higher price or sell stocks at a lower price than would be the case in a highly
liquid market. Foreign securities markets are often more volatile and involve
higher trading costs than U.S. markets, and foreign companies, securities
markets and brokers are also generally not subject to the same level of
supervision and regulation as in the U.S. Certain stocks may be held in the form
of American Depositary Receipts or other similar receipts ("ADRs"). ADRs
represent receipts for foreign common stock deposited with a custodian (which
may include the Trustee). The ADRs in the Trust trade in the U.S. in U.S.
dollars and are registered with the Securities and Exchange Commission. ADRs
generally involve the same types of risks as foreign common stock held directly.
Some ADRs may experience less liquidity than the underlying common stocks traded
in their home market.
No FDIC Guarantee. An investment in your Trust is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
Year 2000 Readiness Disclosure. These two paragraphs constitute "Year 2000
Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act of 1998. If computer systems used by the Sponsor,
Evaluator, Supervisor, Trustee or other service providers to the Trust do not
properly process date-related information after December 31, 1999, the resulting
difficulties could adversely impact the Trust. This is commonly known as the
"Year 2000 Problem." The Sponsor, Evaluator, Supervisor and Trustee are taking
steps to address this problem and to obtain reasonable assurances that other
service providers to the Trust are taking comparable steps. We cannot guarantee
that these steps will be sufficient to avoid any adverse impact on the Trust.
This problem may impact corporations to varying degrees based on factors such as
industry sector and degree of technological sophistication. We cannot predict
what impact, if any, this problem will have on the issuers of the Securities.
In addition, computer failures throughout the financial services industry
beginning January 1, 2000 could have a detrimental effect on the markets for the
Securities. Improperly functioning trading systems may result in settlement
problems and liquidity issues. Moreover, corporate and governmental data
processing errors may adversely affect issuers and overall economic
uncertainties. Remediation costs will affect the earnings of individual issuers.
These costs could be substantial. Issuers may report these costs inconsistently
in U.S. and foreign financial markets. All of these issues could adversely
affect the Securities and the Trust.
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the initial sales charge, and cash, if any,
in the Income and Capital Accounts. The "Fee Table" describes the sales charge
in detail. If any deferred sales charge payment date is not a business day, the
payment will be charged on the next business day. Units purchased subsequent to
the initial deferred sales charge payment will be subject to only that portion
of the deferred sales charge payments not yet collected. A portion of the Public
Offering Price includes an amount of Securities to pay for all or a portion of
the costs incurred in establishing your Trust, including the cost of preparing
documents relating to the Trust (such as the prospectus, trust agreement and
closing documents, federal and state registration fees, the initial fees and
expenses of the Trustee and legal and audit expenses). Beginning on September
21, 2000, the secondary market sales charge will be 4.00% and will not include
deferred payments. This sales charge will reduce by 0.5% on each following
September 21 to a minimum of 3.00%. The initial offering period sales charge is
reduced as follows:
Aggregate
Dollar Amount
of Units Purchased* Sales Charge
- --------------------- ----------------
$50,000 - $99,999 4.25%
$100,000 - $249,999 4.00
$250,000 - $499,999 3.50
$500,000 or more 2.50
- ---------------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
Any sales charge reduction is the responsibility of the selling broker,
dealer or agent. Units may be purchased in the primary or secondary market at
the Public Offering Price less the concession the Sponsor typically allows to
brokers and dealers for purchases by (1) investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management service, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, (2) bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, (3) any person who for at least 90 days, has been an officer, director
or bona fide employee of any firm offering Units for sale to investors or their
spouses or children under 21 and (4) officers and directors of bank holding
companies that make Units available directly or through subsidiaries or bank
affiliates. Notwithstanding anything to the contrary in this Prospectus, such
investors, bank trust departments, firm employees and bank holding company
officers and directors who purchase Units through this program will not receive
sales charge reductions for quantity purchases.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of Van Kampen Funds Inc. and its affiliates, dealers
and their affiliates and vendors providing services to the Sponsor may purchase
Units at the Public Offering Price less the applicable dealer concession.
During the initial offering period, unitholders of any Van Kampen-sponsored
unit investment trust may utilize their redemption or termination proceeds from
such a trust to purchase Units of the Trust at the Public Offering Price per
Unit less 1%.
The minimum purchase is 100 Units (25 Units for retirement accounts) but may
vary by selling firm. However, in connection with fully disclosed transactions
with the Sponsor, the minimum purchase requirement will be that number of Units
set forth in the contract between the Sponsor and the related broker or agent.
Offering Price. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in accordance with
fluctuations in the prices of the underlying Securities in the Trust. The
initial price of the Securities was determined by Interactive Data Corporation,
a firm regularly engaged in the business of evaluating, quoting or appraising
comparable securities. The Evaluator will generally determine the value of the
Securities as of the Evaluation Time on each business day and will adjust the
Public Offering Price of Units accordingly. This Public Offering Price will be
effective for all orders received prior to the Evaluation Time on each business
day. The Evaluation Time is the close of the New York Stock Exchange on each
Trust business day. Orders received by the Trustee or Sponsor for purchases,
sales or redemptions after that time, or on a day which is not a business day,
will be held until the next determination of price. The term "business day", as
used herein and under of Unitholders--Redemption of Units", excludes Saturdays,
Sundays and holidays observed by the New York Stock Exchange.
The aggregate underlying value of the Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Securities are listed on a national or foreign securities
exchange, this evaluation is generally based on the closing sale prices on that
exchange (unless it is determined that these prices are inappropriate as a basis
for valuation) or, if there is no closing sale price on that exchange, at the
closing ask prices. If the Securities are not listed on a national or foreign
securities exchange or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based on the current ask
price on the over-the-counter market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of current
ask prices for comparable securities, (b) by appraising the value of the
Securities on the ask side of the market or (c) by any combination of the above.
The value of any foreign securities is based on the applicable currency exchange
rate in U.S. dollars as of the Evaluation Time. The value of the Securities for
purposes of secondary market transactions and redemptions is described under
"Rights of Unitholders--Redemption of Units".
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather the
entire pool of Securities in a Trust, taken as a whole, which are represented by
the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. Units repurchased in the
secondary market, if any, may be offered by this Prospectus at the secondary
market Public Offering Price in the manner described above.
The Sponsor intends to qualify Units for sale in a number of states. Units
are not registered in any foreign country and neither Van Kampen Funds Inc. nor
the Underwriter take responsibility with respect to sales or offers made to sell
Units where sales are not legal. Sales or offers to sell in such countries may
only be made in accordance with applicable laws. The Trust is not registered
with the Swiss Federal Banking Commission, which acts as supervisory authority
in mutual fund matters in Switzerland. Accordingly, investors should note that
the Units may not be offered or distributed in or from Switzerland unless this
offer or distribution is exclusively addressed to Swiss institutional investors
without any public offering. During the initial offering period, Units will be
sold at the current Public Offering Price. When the initial offering period
ends, Units may be offered by this prospectus at the secondary market Public
Offering Price.
Dealers and other selling agents can purchase Units at prices which represent
a concession or agency commission of 3.0% of the Public Offering Price per Unit
(or 65% of the maximum sales charge after September 21, 2000). Eligible foreign
dealers and selling agents can purchase Units at prices which represent a
concession or agency commission of 2.0% of the Public Offering Price per Unit
(or 45% of the maximum sales charge after September 21, 2000). For transactions
involving unitholders of other Van Kampen unit investment trusts who use their
redemption or termination proceeds to purchase Units of the Trust, dealers and
other selling agents will receive a concession equal to $.23 per Unit ($.16 in
the case of foreign dealers and agents) if the Units are sold subject to the
maximum deferred sales charge or 66% (45% in the case of foreign dealers and
agents) of the then current maximum remaining deferred sales charge if the Units
are sold subject to a lesser amount.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. Notwithstanding anything to the
contrary herein, in no case shall the total of any concessions, agency
commissions and any additional compensation allowed or paid to any broker,
dealer or other distributor of Units with respect to any individual transaction
exceed the total sales charge applicable to such transaction. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units and to change the amount of the concession or agency commission to dealers
and others from time to time.
Broker-dealers of the Trusts, banks and/or others may be eligible to
participate in a program in which such firms receive from the Sponsor a nominal
award for each of their representatives who have sold a minimum number of units
of unit investment trusts created by the Sponsor during a specified time period.
In addition, at various times the Sponsor may implement other programs under
which the sales forces of brokers, dealers, banks and/or others may be eligible
to win other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to such brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Trusts. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of any Trust. These programs will not change the price Unitholders
pay for their Units or the amount that a Trust will receive from the Units sold.
Sponsor and Underwriter Compensation. The Underwriter will receive a gross
sales commission equal to the total sales charge applicable to each transaction.
Any sales charge discount provided to investors will be borne by the selling
dealer or agent. The Sponsor will receive from the Underwriter the difference
between the gross sales commission and 3.30% of the Public Offering Price per
Unit. The Sponsor will also pay the Underwriter an additional 0.30% of the
Public Offering Price per Unit sold during the initial offering period out of
its own assets. In addition, the Sponsor will realize a profit or loss as a
result of the difference between the price paid for the Securities by the
Sponsor and the cost of the Securities to each Trust on the Initial Date of
Deposit as well as on subsequent deposits. See "Notes to Portfolio". The Sponsor
has not participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities. The Sponsor may realize profit or loss as a result of the possible
fluctuations in the market value of the Securities, since all proceeds received
from purchasers of Units are retained by the Underwriter. In maintaining a
secondary market, the Underwriter will realize profits or losses in the amount
of any difference between the price at which Units are purchased and the price
at which Units are resold (which price includes the applicable sales charge) or
from a redemption of repurchased Units at a price above or below the purchase
price. Cash, if any, made available to the Sponsor prior to the date of
settlement for the purchase of Units may be used in the Sponsor's business and
may be deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934.
An affiliate of the Sponsor may have participated in a public offering of one
or more of the Securities. The Sponsor, an affiliate or their employees may have
a long or short position in these Securities. An affiliate may act as a
specialist or market marker for these Securities. An officer, director or
employee of the Sponsor or an affiliate may be an officer or director for
issuers of the Securities.
Market for Units. Although it is not obligated to do so, the Underwriter
currently intends to maintain a market for Units and to purchase Units at the
secondary market repurchase price (which is described under "Right of
Unitholders--Redemption of Units"). The Underwriter may discontinue purchases of
Units or discontinue purchases at this price at any time. In the event that a
secondary market is not maintained, a Unitholder will be able to dispose of
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". Unitholders should contact
their broker to determine the best price for Units in the secondary market.
Units sold prior to the time the entire deferred sales charge has been collected
will be assessed the amount of any remaining deferred sales charge at the time
of sale. The Trustee will notify the Underwriter of any tendered of Units for
redemption. If the Underwriter's bid in the secondary market equals or exceeds
the Redemption Price per Unit, it may purchase the Units not later than the day
on which Units would have been redeemed by the Trustee. The Underwriter may sell
repurchased Units at the secondary market Public Offering Price per Unit.
Tax-Sheltered Retirement Plans. Units are available for purchase in
connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for the individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The minimum
purchase for these accounts is reduced to 25 Units but may vary by selling firm.
The purchase of Units may be limited by the plans' provisions and does not
itself establish such plans.
RIGHTS OF UNITHOLDERS
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Distributions. Dividends and any net proceeds from the sale of Securities
received by a Trust will generally be distributed to Unitholders on each
Distribution Date to Unitholders of record on the preceding Record Date and as
determined by the Trustee. These dates are listed under "Summary of Essential
Financial Information". A person becomes a Unitholder of record on the date of
settlement (generally three business days after Units are ordered). Unitholders
will initially have distributions reinvested into additional Units but may elect
to receive distributions in cash. See "Rights of Unitholders--Reinvestment
Option".
Dividends received by a Trust are credited to the Income Account of the
Trust. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account. Proceeds received on the
sale of any Securities, to the extent not used to meet redemptions of Units or
pay deferred sales charges, fees or expenses, will be distributed to
Unitholders. Any distribution to Unitholders consists of each Unitholder's pro
rata share of the available cash in the Income and Capital Accounts as of the
related Record Date.
Reinvestment Option. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option (to the
extent Units may be lawfully offered for sale in the state in which the
Unitholder resides). Unitholders will be subject to the remaining deferred sales
charge payments due on Units. To participate in this reinvestment option, a
Unitholder should purchase Units with the Automatic Reinvestment Option CUSIP
number. A Unitholder's election will apply to all Units owned by the Unitholder
and will remain in effect until changed by the Unitholder. If Units are
unavailable for reinvestment, distributions will be paid in cash. Purchases of
additional Units made pursuant to the reinvestment plan will be made at the net
asset value for Units as of the Evaluation Time on the Distribution Date.
A participant may elect to terminate his or her reinvestment plan and receive
future distributions in cash by notifying the Trustee in writing no later than
five days before a distribution date. The Sponsor shall have the right to
suspend or terminate the reinvestment plan at any time.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286. Certificates must be tendered to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed (or by providing satisfactory indemnity in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. On the seventh day following the tender, the
Unitholder will be entitled to receive in cash an amount for each Unit equal to
the Redemption Price per Unit next computed on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received by the Trustee after the Evaluation
Time or on a day which is not a Trust business day, the date of tender is deemed
to be the next business day.
Unitholders tendering 2,500 or more Units of a Trust for redemption may
request an in kind distribution of Securities equal to the Redemption Price per
Unit on the date of tender. The Trust will not make in kind distributions of
stocks held in foreign securities markets. An in kind distribution will be made
by the Trustee through the distribution of each of the Securities in book-entry
form to the account of the Unitholder's broker-dealer at Depository Trust
Company. Amounts representing fractional shares will be distributed in cash. The
Trustee may adjust the number of shares of any Security included in a
Unitholder's in kind distribution to facilitate the distribution of whole
shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in kind or sold, the size of a Trust will be, and
the diversity of a Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the Unitholder depending on the value of the Securities
at the time of redemption. Special federal income tax consequences will result
if a Unitholder requests an in kind distribution. See "Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rata share of each Unit in each Trust determined on
the basis of (i) the cash on hand in the Trust, (ii) the value of the Securities
in the Trust and (iii) dividends receivable on the Securities in the Trust
trading ex-dividend as of the date of computation, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) the accrued
expenses of the Trust and (c) any unpaid deferred sales charge payments. During
the initial offering period, the redemption price and the secondary market
repurchase price will also include estimated organizational costs. For these
purposes, the Evaluator may determine the value of the Securities in the
following manner: If the Securities are listed on a national or foreign
securities exchange, this evaluation is generally based on the closing sale
prices on that exchange (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price on
that exchange, at the closing bid prices. If the Securities are not so listed
or, if so listed and the principal market therefore is other than on the
exchange, the evaluation may be based on the current bid price on the
over-the-counter market. If current bid prices are unavailable or inappropriate,
the evaluation may be determined (a) on the basis of current bid prices for
comparable securities, (b) by appraising the Securities on the bid side of the
market or (c) by any combination of the above. The value of any foreign
securities is based on the applicable currency exchange rate in U.S. dollars as
of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the SEC determines that
trading on that Exchange is restricted or an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
for other periods as the SEC may permit.
Certificates. Ownership of Units is evidenced by certificates unless a
Unitholder makes a written request to the Trustee that ownership be in book
entry form. Units are transferable by making a written request to the Trustee
and, in the case of Units in certificate form, by presentation of the
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign the written
request, and certificate or transfer instrument, exactly as his name appears on
the records of the Trustee and on the face of any certificate with the signature
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or a signature guarantee program accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not limited
to, trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Fractional certificates
will not be issued. The Trustee may require a Unitholder to pay a reasonable fee
for each certificate reissued or transferred and to pay any governmental charge
that may be imposed in connection with each transfer or interchange. Destroyed,
stolen, mutilated or lost certificates will be replaced upon delivery to the
Trustee of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Reports Provided. Unitholders will receive a statement of dividends and other
amounts received by the Trust for each distribution. Within a reasonable time
after the end of each year, each person who was a Unitholder during that year
will receive a statement describing dividends and capital received, actual Trust
distributions, Trust expenses, a list of the Securities and other Trust
information. Unitholders may obtain the Evaluator's evaluations of the
Securities upon request.
TRUST ADMINISTRATION
- --------------------------------------------------------------------------------
Portfolio Administration. The Trust is not a managed fund and, except as
provided in the Trust Agreement, Securities generally will not be sold or
replaced. The Sponsor may, however, direct that Securities be sold in certain
limited circumstances to protect the Trust based on advice from the Supervisor.
These situations may include events such as the issuer having defaulted on
payment of any of its outstanding obligations or the price of a Security has
declined to such an extent or other credit factors exist so that in the opinion
of the Sponsor retention of the Security would be detrimental to the Trust. In
addition, the Trustee may sell Securities to redeem Units or pay Trust expenses
or deferred sales charges. The Trustee must reject any offer for securities or
property in exchange for the Securities. If securities or property are
nonetheless acquired by the Trust, the Sponsor may direct the Trustee to sell
the securities or property and distribute the proceeds to Unitholders or to
accept the securities or property for deposit in the Trust. Should any contract
for the purchase of any of the Securities fail, the Sponsor will (unless
substantially all of the moneys held in the Trust to cover the purchase are
reinvested in substitute Securities in accordance with the Trust Agreement)
refund the cash and sales charge attributable to the failed contract to all
Unitholders on or before the next distribution date.
When the Trust sells Securities, the composition and diversity of the
Securities in the Trust may be altered. In order to obtain the best price for
the Trust, it may be necessary for the Supervisor to specify minimum amounts
(generally 100 shares) in which blocks of Securities are to be sold. In
effecting purchases and sales of the Trust's portfolio securities, the Sponsor
may direct that orders be placed with and brokerage commissions be paid to
brokers, including brokers which may be affiliated with the Trust, the Sponsor
or dealers participating in the offering of Units. In addition, in selecting
among firms to handle a particular transaction, the Sponsor may take into
account whether the firm has sold or is selling units of unit investment trusts
which it sponsors.
Amendment of the Trust Agreement. The Trustee and the Sponsor may amend the
Trust Agreement without the consent of Unitholders to correct any provision
which may be defective or to make other provisions that will not adversely
affect Unitholders (as determined in good faith by the Sponsor and the Trustee).
The Trust Agreement may not be amended to increase the number of Units or permit
acquisition of securities in addition to or substitution for the Securities
(except as provided in the Trust Agreement). The Trustee will notify Unitholders
of any amendment.
Termination. The Trust will terminate on the Mandatory Termination Date or
upon the sale or other disposition of the last Security held in the Trust. The
Trust may be terminated at any time with consent of Unitholders representing
two-thirds of the outstanding Units or by the Trustee when the value of the
Trust is less than $500,000 ($3,000,000 if the value of the Trust has exceeded
$15,000,000) (the "Minimum Termination Value"). Unitholders will be notified of
any termination. The Trustee may begin to sell Securities in connection with a
Trust termination during a period beginning nine business days before, and no
later than, the Mandatory Termination Date. Approximately thirty days before
this date, the Trustee will notify Unitholders of the termination and provide a
form enabling qualified Unitholders to elect an in kind distribution of
Securities. See "Rights of Unitholders--Redemption of Units". This form must be
returned at least five business days prior to the Mandatory Termination Date.
Unitholders will receive a final cash distribution within a reasonable time
after the Mandatory Termination Date. All distributions will be net of Trust
expenses and costs. Unitholders will receive a final distribution statement
following termination. The Information Supplement contains further information
regarding termination of the Trust. See "Additional Information".
Limitations on Liabilities. The Sponsor, Evaluator, Supervisor and Trustee
are under no liability for taking any action or for refraining from taking any
action in good faith pursuant to the Trust Agreement, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad faith or gross
negligence (negligence in the case of the Trustee) in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
hereunder. The Trustee is not be liable for depreciation or loss incurred by
reason of the sale by the Trustee of any of the Securities. In the event of the
failure of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and is not be liable for any action taken by it in good faith under
the Trust Agreement. The Trustee is not liable for any taxes or other
governmental charges imposed on the Securities, on it as Trustee under the Trust
Agreement or on the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other taxing
authority having jurisdiction. In addition, the Trust Agreement contains other
customary provisions limiting the liability of the Trustee. The Trustee, Sponsor
and Supervisor may rely on any evaluation furnished by the Evaluator and have no
responsibility for the accuracy thereof. Determinations by the Evaluator shall
be made in good faith upon the basis of the best information available to it.
The Underwriter. Gruntal & Co., L.L.C. is a full-service investment bank
headquartered at One Liberty Plaza in New York, New York. Established in 1880,
Gruntal has a proud history of client service, financial stability and growth.
Today, Gruntal has over 2,100 employees in 29 offices across the United States.
The scope of Gruntal's business spans a broad range of financial services
including investment banking, research, trading, asset management and brokerage
services to individuals, institutions and corporations worldwide.
Sponsor. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Trust. The Sponsor is an indirect subsidiary of Morgan Stanley Dean Witter & Co.
Van Kampen Funds Inc. specializes in the underwriting and distribution of unit
investment trusts and mutual funds with roots in money management dating back to
1926. The Sponsor is a member of the National Association of Securities Dealers,
Inc. and has offices at One Parkview Plaza, Oakbrook Terrace, Illinois 60181,
(630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). The Information Supplement contains
additional information about the Sponsor.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law. Additional information
regarding the Trustee is set forth in the Information Supplement, including the
Trustee's qualifications and duties, its ability to resign, the effect of a
merger involving the Trustee and the Sponsor's ability to remove and replace the
Trustee. See "Additional Information".
Performance Information. The Sponsor may from time to time in its advertising
and sales materials compare the then current estimated returns on the Trust and
returns over specified time periods on other similar trusts (which may show
performance net of expenses and charges which the Trust would have charged) with
returns on other taxable investments such as the common stocks comprising the
Dow Jones Industrial Average, the S&P 500, other investment indices, corporate
or U.S. government bonds, bank CDs, money market accounts or money market funds,
or with performance data from Lipper Analytical Services, Inc., Morningstar
Publications, Inc. or various publications, each of which has characteristics
that may differ from those of the Trust. Information on percentage changes in
the dollar value of Units may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective Unitholders. Total return figures may not be averaged and may not
reflect deduction of the sales charge, which would decrease return. No provision
is made for any income taxes payable. Past performance may not be indicative of
future results. The Trust portfolio is not managed and Unit price and return
fluctuate with the value of common stocks in the portfolios, so there may be a
gain or loss when Units are sold. As with other performance data, performance
comparisons should not be considered representative of the Trust's relative
performance for any future period.
TAXATION
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General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the Units.
The summary is limited to investors who hold the Units as capital assets
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust. For purposes of the following discussion and opinions, it is assumed
that each Security is equity for federal income tax purposes. In the opinion of
Chapman and Cutler, special counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of the
Trust will be treated as income of the Unitholders thereof under the Code. Each
Unitholder will be considered to have received his pro rata share of income
derived from each Security when such income is considered to be received by the
Trust.
2. A Unitholder will be considered to have received all of the dividends paid
on his pro rata portion of each Security when such dividends are considered to
be received by the Trust regardless of whether such dividends are used to pay a
portion of any deferred sales charge imposed. Unitholders will be taxed in this
manner regardless of whether distributions from the Trust are actually received
by the Unitholder or are automatically reinvested (see "Rights of
Unitholders--Reinvestment Option").
3. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder from the Trust as
described below). The price a Unitholder pays for his Units, generally including
sales charges, is allocated among his pro rata portion of each Security held by
the Trust (in proportion to the fair market values thereof on the valuation date
closest to the date the Unitholder purchases his Units) in order to determine
his initial tax basis for his pro rata portion of each Security held by the
Trust. Unitholders should consult their own tax advisers with regard to the
calculation of basis. For federal income tax purposes, a Unitholder's pro rata
portion of the dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to a Security held by the Trust is taxable as ordinary
income to the extent of such corporation's current and accumulated "earnings and
profits". A Unitholder's pro rata portion of dividends paid on such Security
which exceed such current and accumulated earnings and profits will first reduce
a Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, the holding period for such capital gain will be
determined by the period of time a Unitholder has held his Units.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss (except in the case of a dealer or a
financial institution). Unitholders should consult their tax advisers regarding
the recognition of gains and losses for federal income tax purposes. Unitholders
should consult their tax advisers regarding the recognition of gains and losses
for federal income tax purposes.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes
sales charges, and such charges are not deductible. A portion of the sales
charge for the Trust is deferred. The income (or proceeds from redemption) a
Unitholder must take into account for federal income tax purposes is not reduced
by amounts deducted to pay the deferred sales charge. Unitholders should consult
their own tax advisers as to the income tax consequences of any deferred sales
charge imposed.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust (to the extent such
dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Securities paying such dividends (other than corporate
Unitholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code). Final regulations have
been issued which address special rules that must be considered in determining
whether the 46 day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unitholder
owns certain stock (or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. Unitholders should
consult their tax advisors with respect to the limitations on and modifications
to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. As a result of the Tax Reform Act of 1986, certain miscellaneous
itemized deductions, such as investment expenses, tax return preparation fees
and employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of a Trust as miscellaneous
itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. The Internal Revenue Service Restructuring and
Reform Act of 1998 (the "1998 Tax Act") provides that for taxpayers other than
corporations, net capital gain (which is defined as net long-term capital gain
over net short-term capital loss for the taxable year) realized from property
(with certain exclusions) is subject to a maximum marginal stated tax rate of
20% (10% in the case of certain taxpayers in the lowest tax bracket). Capital
gain or loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year or less.
The date on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. Capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust involved including his
pro rata portion of all Securities represented by a Unit. The Taxpayer Relief
Act of 1997 (the "1997 Tax Act") includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and opportunities for
gain (e.g., short sales, offsetting notional principal contracts, futures or
forward contracts, or similar transactions) as constructive sales for purposes
of recognition of gain (but not loss) and for purposes of determining the
holding period. Unitholders should consult their own tax advisers with regard to
any such constructive sales rules.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Trust. As discussed in "Rights of Unitholders--Redemption of
Units," under certain circumstances a Unitholder tendering Units for redemption
may request an In Kind Distribution of the Securities in the Trust. A Unitholder
may also under certain circumstances request an In Kind Distribution of the
Securities in the Trust upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units". The Unitholder requesting an In Kind
Distribution will be liable for expenses related thereto (the "Distribution
Expenses") and the amount of such In Kind Distribution will be reduced by the
amount of the Distribution Expenses. See "Rights of Unitholders--Redemption of
Units". As previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unitholder is considered as owning a pro rata
portion of each of the Trust's assets for federal income tax purposes. The
receipt of an In Kind Distribution will result in a Unitholder receiving an
undivided interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
with respect to each Security owned by the Trust will depend on whether or not a
Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion in the Securities held by
the Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of a Security held by the Trust, such Unitholder will generally
recognize gain or loss based upon the difference between the amount of cash
received by the Unitholder and his tax basis in such fractional share of a
Security held by the Trust.
Because the Trust will own many Securities, a Unitholder who requests an In
Kind Distribution will have to analyze the tax consequences with respect to each
Security owned by the Trust. The amount of taxable gain (or loss) recognized
upon such exchange will generally equal the sum of the gain (or loss) recognized
under the rules described above by such Unitholder with respect to each Security
owned by the Trust. Unitholders who request an In Kind Distribution are advised
to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax
basis in his Units will generally equal the price paid by such Unitholder for
his Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary income
as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Trust (other than those
that are not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unitholders and derived from dividends of foreign corporations will not be
subject to U.S. withholding tax provided that less than 25 percent of the gross
income of the foreign corporation for a three-year period ending with the close
of its taxable year preceding payment was not effectively connected to the
conduct of a trade or business within the United States. In addition, such
earnings may be exempt from U.S. withholding pursuant to a specific treaty
between the United States and a foreign country. Non-U.S. Unitholders should
consult their own tax advisers regarding the imposition of U.S. withholding on
distributions from the Trust.
It should be noted that payments to the Trust of dividends on Securities that
are attributable to foreign corporations may be subject to foreign withholding
taxes and Unitholders should consult their tax advisers regarding the potential
tax consequences relating to the payment of any such withholding taxes by the
Trust. Any dividends withheld as a result thereof will nevertheless be treated
as income to the Unitholders. Because, under the grantor trust rules, an
investor is deemed to have paid directly his share of foreign taxes that have
been paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect to such taxes.
The 1997 Tax Act imposes a required holding period for such credits. Investors
should consult their tax advisers with respect to foreign withholding taxes and
foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by the Trust. The Trustee
will also furnish annual information returns to Unitholders and to the Internal
Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel for New York tax matters, the Trust is not
an association taxable as a corporation and the income of the Trust will be
treated as the income of the Unitholders under the existing income tax laws of
the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders ("U.S. Unitholders") with regard to federal and certain aspects of
New York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers in
this regard. As used herein, the term "U.S. Unitholder" means an owner of a Unit
in the Trust that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source or (b) does not qualify as a U.S. Unitholder in paragraph (a) but whose
income from a Unit is effectively connected with such Unitholder's conduct of a
United States trade or business. The term also includes certain former citizens
of the United States whose income and gain on the Units will be taxable.
Unitholders should consult their tax advisers regarding potential foreign, state
or local taxation with respect to the Units.
TRUST OPERATING EXPENSES
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Compensation of Sponsor, Supervisor and Evaluator. The Sponsor will not
receive any fees in connection with its activities relating to the Trust.
However, the Supervisor and Evaluator, which are affiliates of the Sponsor, will
receive the annual fee for portfolio supervisory and evaluation services set
forth in the "Fee Table". These fees may exceed the actual costs of providing
these services to the Trust but at no time will the total amount received for
supervisory and evaluation services rendered to all Van Kampen unit investment
trusts in any calendar year exceed the aggregate cost of providing these
services in that year.
Trustee's Fee. For its services the Trustee will receive the fee from the
Trust set forth in the "Fee Table" (which includes the estimated amount of
miscellaneous Trust expenses). The Trustee benefits to the extent there are
funds in the Capital and Income Accounts since these Accounts are non-interest
bearing to Unitholders and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to the Trust is
expected to result from the use of these funds.
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the Trust,
(b) fees of the Trustee for extraordinary services, (c) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (d) various governmental charges, (e) expenses and costs of any action
taken by the Trustee to protect the Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) costs associated with liquidating the securities held in the Trust
portfolio, (i) offering costs incurred after the end of the initial offering
period and (j) expenditures incurred in contacting Unitholders upon termination
of the Trust. The Trust may pay the costs of updating its registration statement
each year. Unit investment trust sponsors have historically paid these costs.
General. The expenses of the Trust will accrue on a daily basis. The deferred
sales charge, fees and expenses are generally paid out of the Capital Account.
When these amounts are paid by or owing to the Trustee, they are secured by a
lien on the Trust's portfolio. It is expected that Securities will be sold to
pay these amounts which will result in capital gains or losses to Unitholders.
See "Taxation". The Supervisor's, Evaluator's and Trustee's fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of Shelter"
in the Consumer Price Index or, if this category is not published, in a
comparable category.
OTHER MATTERS
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Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
Independent Certified Public Accountants. The statement of condition and the
related portfolio included in this Prospectus have been audited by Grant
Thornton LLP, independent certified public accountants, as set forth in their
report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
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This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Trust with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Securities, investment risks and general information
about the Trust. The Information Supplement may be obtained by contacting the
Trustee at (800) 856-8487 or is available along with other related materials at
the SEC's internet site (http://www.sec.gov).
TABLE OF CONTENTS
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Title Page
----- ----
Summary of Essential Financial Information.. 2
Fee Table................................... 3
E-Commerce Software Growth Trust............ 4
Notes to Portfolio.......................... 6
The Securities.............................. 7
Report of Independent Certified
Public Accountants....................... 10
Statement of Condition ..................... 11
The Trust................................... A-1
Objectives and Securities Selection......... A-1
Risk Factors................................ A-2
Public Offering............................. A-3
Rights of Unitholders....................... A-7
Trust Administration........................ A-9
Taxation.................................... A-11
Trust Operating Expenses.................... A-14
Other Matters............................... A-15
Additional Information...................... A-15
PROSPECTUS
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September 21, 1999
E-Commerce Software
Growth Trust, Series 1
Gruntal &Co.
Investment Advice since 1880
14 Wall Street, 20th Floor
New York, NY 10005
(800) 223-7634
Please retain this prospectus for future reference.
Information Supplement
Van Kampen Focus Portfolios, Series 181
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This Information Supplement provides additional information concerning the
risks and operations of the Trust which is not described in the Prospectus. This
Information Supplement should be read in conjunction with the Prospectus. This
Information Supplement is not a prospectus, does not include all of the
information that an investor should consider before investing in the Trust and
may not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181 or by contacting your broker. This Information
Supplement is dated as of the date of the Prospectus and all capitalized terms
have been defined in the Prospectus.
Table of Contents
Page
Risk Factors 2
Sponsor Information 4
Trustee Information 5
Trust Termination 6
RISK FACTORS
Price Volatility. Because the Trust invests in common stocks, you should
understand the risks of investing in common stocks before purchasing Units.
These risks include the risk that the financial condition of the company or the
general condition of the stock market may worsen and the value of the stocks
(and therefore Units) will fall. Common stocks are especially susceptible to
general stock market movements. The value of common stocks often rises or falls
rapidly and unpredictably as market confidence and perceptions of companies
change. These perceptions are based on factors including expectations regarding
government economic policies, inflation, interest rates, economic expansion or
contraction, political climates and economic or banking crises. The value of
Units will fluctuate with the value of the stocks in the Trust and may be more
or less than the price you originally paid for your Units. As with any
investment, we cannot guarantee that the performance of the Trust will be
positive over any period of time. Because the Trust is unmanaged, the Trustee
will not sell stocks in response to market fluctuations as is common in managed
investments.
Dividends. Common stocks represent ownership interests in a company and are
not obligations of the company. Accordingly, common stockholders have a right to
receive payments from the company that is subordinate to the rights of
creditors, bondholders or preferred stockholders of the company. This means that
common stockholders have a right to receive dividends only if a company's board
of directors declares a dividend and the company has provided for payment of all
of its creditors, bondholders and preferred stockholders. If a company issues
additional debt securities or preferred stock, the owners of these securities
will have a claim against the company's assets before common stockholders if the
company declares bankruptcy or liquidates its assets even though the common
stock was issued first. As a result, the company may be less willing or able to
declare or pay dividends on its common stock.
Technology Issuers. The Trust is concentrated in issuers within the
technology industry. A portfolio concentrated in a single industry may present
more risk than a portfolio broadly diversified over several industries. The
Trust, and therefore Unitholders, may be particularly susceptible to a negative
impact resulting from adverse market conditions or other factors affecting
technology issuers because any negative impact on the technology industry will
not be diversified among issuers within other unrelated industries. Accordingly,
an investment in Units should be made with an understanding of the
characteristics of the technology industry and the risks which such an
investment may entail.
Technology companies generally include companies involved in the development,
design, manufacture and sale of computers, computer related equipment, computer
networks, communications systems, telecommunications products, electronic
products, and other related products, systems and services. The market for
technology products and services, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and frequent
new product introductions. The success of the issuers of the Securities depends
in substantial part on the timely and successful introduction of new products.
An unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be able to
respond timely to compete in the rapidly developing marketplace.
The market for certain technology products and
services may have only recently begun to develop, is rapidly evolving and is
characterized by an increasing number of market entrants. Additionally, certain
technology companies may have only recently commenced operations or offered
equity securities to the public. Such companies are in the early stage of
development and have a limited operating history on which to analyze future
operating results. It is important to note that following its initial public
offering a security is likely to experience substantial stock price volatility
and speculative trading. Accordingly, there can be no assurance that upon
redemption of Units or termination of a Trust a Unitholder will receive an
amount greater than or equal to the Unitholder's initial investment.
Based on trading history, factors such as announcements of new products or
development of new technologies and general conditions of the industry have
caused and are likely to cause the market price of technology common stocks to
fluctuate substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to the
operating performance of such companies. This market volatility may adversely
affect the market price of the Securities and therefore the ability of a
Unitholder to redeem units, or roll over Units into a new trust, at a price
equal to or greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the future
suppliers will be able to meet the demand for components in a timely and cost
effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for, or
and interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer base
consisting of a limited number of large customers who may require product
vendors to comply with rigorous and constantly developing industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies are incorporated into
other related products, certain companies are often highly dependent on the
performance of other computer, electronics and communications companies. There
can be no assurance that these customers will place additional orders, or that
an issuer of Securities will obtain orders of similar magnitude as past orders
form other customers. Similarly, the success of certain companies is tied to a
relatively small concentration of products or technologies with intense
competition between companies. Accordingly, a decline in demand of such
products, technologies or from such customers could have a material adverse
impact on issuers of the Securities.
Foreign Stocks. Because the Trust may invest in
foreign common stocks, it involves additional risks that differ from an
investment in domestic stocks. Investments in foreign securities may involve a
greater degree of risk than those in domestic securities. There is generally
less publicly available information about foreign companies in the form of
reports and ratings similar to those that are published about issuers in the
United States. Also, foreign issuers are generally not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to United States issuers. With respect to certain foreign countries,
there is the possibility of adverse changes in investment or exchange control
regulations, expropriation, nationalization or confiscatory taxation,
limitations on the removal of funds or other assets of the Trust, political or
social instability, or diplomatic developments which could affect United States
investments in those countries. Moreover, industrial foreign economies may
differ favorably or unfavorably from the United States' economy in terms of
growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position. Foreign securities
markets are generally not as developed or efficient as those in the United
States. While growing in volume, they usually have substantially less volume
than the New York Stock Exchange, and securities of some foreign issuers are
less liquid and more volatile than securities of comparable United States
issuers. Fixed commissions on foreign exchanges are generally higher than
negotiated commissions on United States exchanges. There is generally less
government supervision and regulation of securities exchanges, brokers and
listed issuers than in the United States.
Foreign Currencies. The Trust may also involve the risk that fluctuations
in exchange rates between the U.S. dollar and foreign currencies may negatively
affect the value of the stocks. For example, if a foreign stock rose 10% in
price but the U.S. dollar gained 5% against the related foreign currency, a U.S.
investor's return would be reduced to about 5%. This is because the foreign
currency would "buy" fewer dollars or, conversely, a dollar would buy more of
the foreign currency. Many foreign currencies have fluctuated widely against the
U.S. dollar for a variety of reasons such as supply and demand of the currency,
investor perceptions of world or country economies, political instability,
currency speculation by institutional investors, changes in government policies,
buying and selling of currencies by central banks of countries, trade balances
and changes in interest rates. The Trust's foreign currency transactions will be
conducted with foreign exchange dealers acting as principals on a spot (i.e.,
cash) buying basis. These dealers realize a profit based on the difference
between the price at which they buy the currency (bid price) and the price at
which they sell the currency (offer price). The Evaluator will estimate the
currency exchange rates based on current activity in the related currency
exchange markets, however, due to the volatility of the markets and other
factors, the estimated rates may not be indicative of the rate the Trust might
obtain had the Trustee sold the currency in the market at that time.
Liquidity. Whether or not the stocks in the Trust are listed on a stock
exchange, the stocks may delist from the exchange or principally trade in an
over-the-counter market. As a result, the existence of a liquid trading market
could depend on whether dealers will make a market in the stocks. We cannot
guarantee that dealers will maintain a market or that any market will be liquid.
The value of the stocks could fall if trading markets are limited or absent.
Additional Units. The Sponsor may create additional Units of the Trust by
depositing into the Trust additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Trust will pay brokerage fees.
Voting. Only the Trustee may sell or vote the stocks in the Trust. While
you may sell or redeem your Units, you may not sell or vote the stocks in the
Trust. The Sponsor will instruct the Trustee how to vote the stocks. The Trustee
will vote the stocks in the same general proportion as shares held by other
shareholders if the Sponsor fails to provide instructions.
Year 2000. The Trust could be negatively impacted if computer systems used
by the Sponsor, Evaluator, Supervisor or Trustee or other service providers to
the Trusts do not properly process date-related information after January 1,
2000. This is commonly known as the "Year 2000 Problem". The Sponsor, Evaluator,
Supervisor and Trustee are taking steps to address this problem and to obtain
reasonable assurances that other service providers to the Trust are taking
comparable steps. We cannot guarantee that these steps will be sufficient to
avoid any adverse impact on the Trust. This problem is expected to impact
corporations to varying degrees based on factors such as industry sector and
degree of technological sophistication. We cannot predict what impact, if any,
this problem will have on the issuers of stocks in the Trust.
SPONSOR INFORMATION
Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the Trust.
The Sponsor is an indirect subsidiary of Van Kampen Investments Inc. Van Kampen
Investments Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc., which
in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.
("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; asset
management; trading of futures, options, foreign exchange commodities and swaps
(involving foreign exchange, commodities, indices and interest rates); real
estate advice, financing and investing; global custody, securities clearance
services and securities lending; and credit card services.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has offices at One Parkview Plaza, Oakbrook Terrace, Illinois
60181, (630) 684-6000 and 2800 Post Oak Boulevard, Houston, Texas 77056, (713)
993-0500. As of November 30, 1998, the total stockholders' equity of Van Kampen
Funds Inc. was $135,236,000 (audited). (This paragraph relates only to the
Sponsor and not to the Trust or to any other Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of March 31, 1999, the Sponsor and its Van Kampen affiliates managed or
supervised approximately $75 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $64 billion of assets, consisting of $36.6 billion
for 50 open-end mutual funds, $19.5 billion for 39 closed-end funds and $8.2
billion for 106 institutional accounts. The Sponsor has also deposited more than
3,200 unit trusts amounting to approximately $35.4 billion of assets. All of Van
Kampen's open-end funds, closed-ended funds and unit investment trusts are
professionally distributed by leading financial firms nationwide. Based on
cumulative assets deposited, the Sponsor believes that it is the largest sponsor
of insured municipal unit investment trusts, primarily through the success of
its Insured Municipals Income Trust(R) or the IM-IT(R) trust. The Sponsor also
provides surveillance or evaluation services at cost for approximately $13.4
billion of unit investment trust assets outstanding. Since 1976, the Sponsor has
serviced over two million investor accounts, opened through retail distribution
firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
TRUSTEE INFORMATION
The Trustee is The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its unit investment trust division
offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668. The Bank
of New York is subject to supervision and examination by the Superintendent of
Banks of the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder. Such books and records shall be open to
inspection by any Unitholder at all reasonable times during the usual business
hours. The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation. The Trustee is required to keep a certified copy or duplicate
original of the Trust Agreement on file in its office available for inspection
at all reasonable times during the usual business hours by any Unitholder,
together with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
TRUST TERMINATION
The Trust may be liquidated at any time by consent of Unitholders
representing 66 2/3% of the Units of such Trust then outstanding or by the
Trustee when the value of the Securities owned by the Trust, as shown by any
evaluation, is less than $500,000 ($3,000,000 if the value of the Trust has
exceeded $15,000,000). The Trust will be liquidated by the Trustee in the event
that a sufficient number of Units of the Trust not yet sold are tendered for
redemption by the Sponsor, so that the net worth of such Trust would be reduced
to less than 40% of the value of the Securities at the time they were deposited
in the Trust. If the Trust is liquidated because of the redemption of unsold
Units by the Sponsor, the Sponsor will refund to each purchaser of Units the
entire sales charge paid by such purchaser. The Trust Agreement will terminate
upon the sale or other disposition of the last Security held thereunder, but in
no event will it continue beyond the Mandatory Termination Date.
Commencing during the period beginning nine business days prior to, and no
later than, the Mandatory Termination Date, Securities may begin to be sold in
connection with the termination of the Trust. The Sponsor will determine the
manner, timing and execution of the sales of the Securities. The Sponsor shall
direct the liquidation of the Securities in such manner as to effectuate orderly
sales and a minimal market impact. In the event the Sponsor does not so direct,
the Securities shall be sold within a reasonable period and in such manner as
the Trustee, in its sole discretion, shall determine. At least 30 days before
the Mandatory Termination Date the Trustee will provide written notice of any
termination to all Unitholders of the appropriate Trust and in the case of a
Trust will include with such notice a form to enable Unitholders owning the
minimum number of Units described in the Prospectus to request an in kind
distribution of the Securities. To be effective, this request must be returned
to the Trustee at least five business days prior to the Mandatory Termination
Date. On the Mandatory Termination Date (or on the previous business day if a
holiday) the Trustee will deliver each requesting Unitholder's pro rata number
of whole shares of the Securities in the Trust to the account of the
broker-dealer or bank designated by the Unitholder at Depository Trust Company.
The value of the Unitholder's fractional shares of the Securities will be paid
in cash. Unitholders not requesting an in kind distribution will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
following the Mandatory Termination Date. Regardless of the distribution
involved, the Trustee will deduct from the funds of the Trust any accrued costs,
expenses, advances or indemnities provided by the Trust Agreement, including
estimated compensation of the Trustee, costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or other
governmental charges. Any sale of Securities in the Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were not
required at such time. The Trustee will then distribute to each Unitholder of
each Trust his pro rata share of the balance of the Income and Capital Accounts.
Within 60 days of the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in the
same manner.
CONTENTS OF REGISTRATION STATEMENTS
This Amendment of Registration Statement comprises the following papers and
documents:
The facing sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to the Federal Income tax status of securities being
registered.
3.3 Opinion and consent of counsel as to New York tax status of securities
being registered.
4.1 Consent of Interactive Data Corporation.
4.2 Consent of Independent Certified Public Accountants.
SIGNATURES
The Registrant, Van Kampen Focus Portfolios, Series 181, hereby
identifies Van Kampen Merritt Equity Opportunity Trust, Series 1, Series 2,
Series 4 and Series 7 and Van Kampen American Capital Equity Opportunity Trust,
Series 13, Series 14, Series 57 and Series 89 for purposes of the
representations required by Rule 487 and represents the following: (1) that the
portfolio securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to the
extent necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect to the
securities of which this Registration Statement is being filed, this
Registration Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such previous
series as to which the effective date was determined by the Commission or the
staff; and (3) that it has complied with Rule 460 under the Securities Act of
1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Focus Portfolios, Series 181 has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago and State of
Illinois on the 21st day of September, 1999.
Van Kampen Focus Portfolios, Series 181
By Van Kampen Funds Inc.
By Christine K. Putong
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on September 21,
1999 by the following persons who constitute a majority of the Board of
Directors of Van Kampen Funds Inc.
SIGNATURE TITLE
Richard F. Powers III Chairman and Chief Executive )
Officer )
John H. Zimmerman III President and Chief Operating )
Officer )
William R. Rybak Executive Vice President and )
Chief Financial Officer )
A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )
Michael H. Santo Executive Vice President )
Christine K. Putong
(Attorney-in-fact*)
- --------------------------------------------------------------------------------
*An executed copy of each of the related powers of attorney is filed
herewith or was filed with the Securities and Exchange Commission in connection
with the Registration Statement on Form S-6 of Van Kampen Focus Portfolios,
Series 136 (File No. 333-70897) and the same are hereby incorporated herein by
this reference.
EXHIBIT 1.1
VAN KAMPEN FOCUS PORTFOLIOS
SERIES 181
TRUST AGREEMENT
Dated: September 21, 1999
This Trust Agreement among Van Kampen Funds Inc., as Depositor,
American Portfolio Evaluation Services, a division of Van Kampen Investment
Advisory Corp., as Evaluator, Van Kampen Investment Advisory Corp., as
Supervisory Servicer, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Van Kampen American Capital Equity Opportunity Trust, Series
87 and Subsequent Series, Standard Terms and Conditions of Trust, Effective
January 27, 1998" (herein called the "Standard Terms and Conditions of Trust")
and such provisions as are set forth in full and such provisions as are
incorporated by reference constitute a single instrument. All references herein
to Articles and Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator, Supervisory Servicer and Trustee agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities defined in Section 1.01(24), listed in the Schedule
hereto, have been deposited in trust under this Trust Agreement.
2. The fractional undivided interest in and ownership of each Trust
represented by each Unit is an amount the numerator of which is one and the
denominator of which is the amount set forth under "Summary of Essential
Financial Information - Initial Number of Units" in the Prospectus. Such
fractional undivided interest may be (a) increased by the number of any
additional Units issued pursuant to Section 2.03, (b) increased or decreased in
connection with an adjustment to the number of Units pursuant to Section 2.03,
or (c) decreased by the number of Units redeemed pursuant to Section 5.02.
3. The terms "Capital Account Record Date" and "Income Account Record
Date" shall mean the "Record Dates" set forth under "Summary of Essential
Financial Information" in the Prospectus.
4. The terms "Capital Account Distribution Date" and "Income Account
Distribution Date" shall mean the "Distribution Dates" set forth under "Summary
of Essential Financial Information" in the Prospectus.
5. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" set forth under "Summary of Essential Financial Information"
in the Prospectus.
6. Section 6.01(e) is hereby replaced with the following:
(e) (1) Subject to the provisions of subparagraph (2) of this
paragraph, the Trustee may employ agents, sub-custodians, attorneys,
accountants and auditors and shall not be answerable for the default
or misconduct of any such agents, sub-custodians, attorneys,
accountants or auditors if such agents, sub-custodians, attorneys,
accountants or auditors shall have been selected with reasonable care.
The Trustee shall be fully protected in respect of any action under
this Indenture taken or suffered in good faith by the Trustee in
accordance with the opinion of counsel, which may be counsel to the
Depositor acceptable to the Trustee, provided, however that this
disclaimer of liability shall not excuse the Trustee from the
responsibilities specified in subparagraph (2) below. The fees and
expenses charged by such agents, sub-custodians, attorneys,
accountants or auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the affected
Trust as set forth in section 6.04 hereof.
(2) The Trustee may place and maintain in the care of an Eligible
Foreign Custodian (which is employed by the Trustee as a sub-custodian
as contemplated by subparagraph (1) of this paragraph (e) and which
may be an affiliate or subsidiary of the Trustee or any other entity
in which the Trustee may have an ownership interest) any investments
(including foreign currencies) for which the primary market is outside
the United States, and such cash and cash equivalents in amounts
reasonably necessary to effect the Trust's transactions in such
investments, provided that:
(a) The Trustee shall perform all duties assigned to the
Foreign Custody Manager by Rule 17f-5 under the Investment
Company Act of 1940 (17 CFR ss. 270.17f-5) ("Rule 17f-5"), as now
in effect or as such rule may be amended in the future. The
Trustee shall not delegate such duties.
(b) The Trustee shall exercise reasonable care, prudence and
diligence such as a person having responsibility for the
safekeeping of Trust assets would exercise, and shall be liable
to the Trust for any loss occurring as a result of its failure to
do so.
(c) The Trustee shall indemnify the Trust and hold the Trust
harmless from and against any risk of loss of Trust assets held
in accordance with the foreign custody contract.
(d) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued use of a
particular Eligible Foreign Custodian pursuant to this
subparagraph for a period of not less than six years from the end
of the fiscal year in which the Trust was terminated, the first
two years in an easily accessible place. Such records shall be
available for inspection by Unitholders and the Securities and
Exchange Commission at the Trustee's offices at all reasonable
times during its usual business hours.
(3) "Eligible Foreign Custodian" shall have the meaning assigned
to it in Rule 17f-5.
(4) "Foreign Custody Manager" shall have the meaning assigned to
it in Rule 17f-5.
7. Section 1.01 (1), (3) and (4) shall be replaced in their entirety by
the following:
(1) "Depositor" shall mean Van Kampen Funds Inc. and its succesors in
interest, or any successor depositor appointed as hereinafter provided.
(3) "Evaluator" shall mean American Portfolio Evaluation Services (a
division of a Van Kampen Investment Advisory Corp.) and its successors in
interest, or any successor evaluator appointed as hereinafter provided.
(4) "Supervisory Servicer" shall mean Van Kampen Investment Advisory
Corp. and its successors in interest, or any successor portfolio supervisor
appointed as hereinafter provided.
8. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust and subject to the requirements set forth in this paragraph,
unless the Prospectus otherwise requires, the Sponsor may, on any Business Day
(the "Trade Date"), subscribe for additional Units as follows:
(a) Prior to the Evaluation Time on such Business Day, the Sponsor
shall provide notice (the "Subscription Notice") to the Trustee, by
telephone or by written communication, of the Sponsor's intention to
subscribe for additional Units. The Subscription Notice shall identify the
additional Securities to be acquired (unless such additional Securities are
a precise replication of the then existing portfolio) and shall either (i)
specify the quantity of additional Securities to be deposited by the
Sponsor on the settlement date for such subscription or (ii) instruct the
Trustee to purchase additional Securities with an aggregate value as
specified in the Subscription Notice.
(b) Promptly following the Evaluation Time on such Business Day, the
Sponsor shall verify with the Trustee the number of additional Units to be
created.
(c) Not later than the time on the settlement date for such
subscription when the Trustee is to deliver or assign the additional Units
created hereby, the Sponsor shall deposit with the Trustee (i) any
additional Securities specified in the Subscription Notice (or contracts to
purchase such additional Securities together with cash or a letter of
credit in the amount necessary to settle such contracts) or (ii) cash or a
letter of credit in an amount equal to the aggregate value of the
additional Securities specified in the Subscription Notice, and adding and
subtracting the amounts specified in the first and second sentences of
Section 5.01, computed as of the Evaluation Time on the Business Day
preceding the Trade Date divided by the number of Units outstanding as of
the Evaluation Time on the Business Day preceding the Trade Date, times the
number of additional Units to be created.
(d) On the settlement date for such subscription, the Trustee shall,
in exchange for the Securities and cash or letter of credit described
above, deliver to, or assign in the name of or on the order of, the Sponsor
the number of Units verified by the Sponsor with the Trustee.
9. Section 3.15 of the Standard Terms and Conditions of Trust is hereby
replaced in its entirety by the following:
Section 3.15. Deferred Sales Charge. If the Prospectus related to the
Trust specifies a deferred sale charge, the Trustee shall, on each Deferred
Sales Charge Payment Date and as permitted by such Prospectus, withdraw
from the Capital Account an amount per Unit equal to the Deferred Sales
Charge Payment and credit such amount to a special non-Trust account
maintained at the Trustee out of which the deferred sales charge will be
distributed to the Depositor. If the balance in the Capital Account is
insufficient to make any such withdrawal, the Trustee shall, as directed by
the Depositor, either advance funds in an amount equal to the proposed
withdrawal and be entitled to reimbursement of such advance upon the
deposit of additional moneys in the Capital Account, sell Securities and
credit the proceeds thereof to such special Depositor's account or credit
(if permitted by law) Securities in kind to such special Depositor's
Account. If a Unitholder redeems Units prior to full payment of the
deferred sales charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the Redemption Price
payable to such Unitholder an amount equal to the unpaid portion of the
deferred sales charge and distribute such amount to such special
Depositor's Account. The Depositor may at any time instruct the Trustee in
writing to distribute to the Depositor cash or Securities previously
credited to the special Depositor's account. Amounts to be credited to the
special Depositor's account with respect to each Deferred Sales Charge
Payment are due and payable to the Depositor on the related Deferred Sales
Charge Payment Date.
The term "Deferred Sales Charge Payment Dates" shall mean the 10th day
of each month beginning May 10, 2000 and continuing through September 10,
2000. If any Deferred Sales Charge Payment Date is not a Business Day, that
Deferred Sales Charge Payment Date shall be deemed to be the next business
day. The term "Deferred Sales Charge Payment" shall mean a fraction of the
total maximum deferred sales charge specified in the Prospectus, the
numerator of which is one and the denominator of which is equal to the
total number of Deferred Sales Charge Payment Dates.
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to
be executed and their corporate seals to be hereto affixed and attested; all as
of the day, month and year first above written.
Van Kampen Funds Inc.
By James J. Boyne
Senior Vice President
Attest:
By Weston B. Wetherell
Vice President
American Portfolio Evaluation Services,
a division of Van Kampen Investment Advisory
Corp.
By James J. Boyne
Senior Vice President
Attest
By Weston B. Wetherell
Vice President
Van Kampen Investment Advisory Corp.
By James J. Boyne
Senior Vice President
Attest
By Weston B. Wetherell
Vice President
The Bank of New York
By Jeffrey Cohen
Vice President
Attest
By Robert Weir
Assistant Treasurer
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED IN
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 181
(Note: Incorporated herein and made a part hereof is the "Portfolio" as set
forth in the Prospectus.)
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
September 21, 1999
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Van Kampen Focus Portfolios, Series 181
---------------------------------------
Gentlemen:
We have served as counsel for Van Kampen Funds Inc. as Sponsor and
Depositor of Van Kampen Focus Portfolios, Series 181 (hereinafter referred to as
the "Trust"), in connection with the preparation, execution and delivery of a
Trust Agreement dated September 21, 1999, among Van Kampen Funds Inc., as
Depositor, American Portfolio Evaluation Services, a division of Van Kampen
Investment Advisory Corp., as Evaluator, Van Kampen Investment Advisory Corp.,
as Supervisory Servicer, and The Bank of New York, as Trustee, pursuant to which
the Depositor has delivered to and deposited the Securities listed in the
Schedule to the Trust Agreement with the Trustee and pursuant to which the
Trustee has provided to or on the order of the Depositor documentation
evidencing ownership of Units of fractional undivided interest in and ownership
of the Trust (hereinafter referred to as the "Units"), created under said Trust
Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the Units in the
Trust have been duly authorized; and
2. The certificates evidencing the Units in the Trust, when duly
executed and delivered by the Depositor and the Trustee in accordance
with the aforementioned Trust Agreement, will constitute valid and
binding obligations of such Trust and the Depositor in accordance with
the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-85921) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
September 21, 1999
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Van Kampen Focus Portfolios, Series 181
---------------------------------------
Gentlemen:
We have acted as counsel for Van Kampen Funds Inc., Depositor of Van
Kampen Focus Portfolios, Series 181 (the "Fund"), in connection with the
issuance of Units of fractional undivided interest in the Fund, under a Trust
Agreement, dated September 21, 1999 (the "Indenture") among Van Kampen Funds
Inc., as Depositor, American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator, Van Kampen Investment Advisory
Corp., as Supervisory Servicer, and The Bank of New York, as Trustee. The Fund
is comprised of one unit investment trust, E-Commerce Software Growth Trust,
Series 1 Series (the "Trust").
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of equity
securities (the "Securities") as set forth in the Prospectus. For purposes of
the following discussion and opinion, it is assumed that each Security is equity
for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
United States Federal income tax law:
(i) The Trust is not an association taxable as a corporation
for Federal income tax purposes but will be governed by the provisions
of subchapter J (relating to Trusts) of chapter 1, Internal Revenue
Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata
share of each asset of the Trust in the proportion that the number of
Units held by him bears to the total number of Units outstanding. Under
subpart E, subchapter J of chapter 1 of the Code, income of the Trust
will be treated as income of each Unitholder in the proportion
described, and an item of Trust income will have the same character in
the hands of a Unitholder as it would have in the hands of the Trustee.
Each Unitholder will be considered to have received his pro rata share
of income derived from each Trust asset when such income is considered
to be received by the Trust. A Unitholder's pro rata portion of
distributions of cash or property by a corporation with respect to a
Security ("dividends" as defined by Section 316 of the Code ) is
taxable as ordinary income to the extent of such corporation's current
and accumulated "earnings and profits." A Unitholder's pro rata portion
of dividends paid on such Security which exceeds such current and
accumulated earnings and profits will first reduce the Unitholder's tax
basis in such Security, and to the extent that such dividends exceed a
Unitholder's tax basis in such Security, shall be treated as gain from
the sale or exchange of property.
(iii) The price a Unitholder pays for his Units, generally
including sales charges, is allocated among his pro rata portion of
each Security held by the Trust (in proportion to the fair market
values thereof on the valuation date closest to the date the Unitholder
purchases his Units), in order to determine his tax basis for his pro
rata portion of each Security held by the Trust.
(iv) Gain or loss will be recognized to a Unitholder (subject
to various nonrecognition provisions under the Code) upon redemption or
sale of his Units, except to the extent an in kind distribution of
Securities is received by such Unitholder from the Trust as discussed
below. Such gain or loss is measured by comparing the proceeds of such
redemption or sale with the adjusted basis of his Units. Before
adjustment, such basis would normally be cost if the Unitholder had
acquired his Units by purchase. Such basis will be reduced, but not
below zero, by the Unitholder's pro rata portion of dividends with
respect to each Security which is not taxable as ordinary income.
(v) If the Trustee disposes of a Trust asset (whether by
sale, taxable exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unitholder (subject
to various nonrecognition provisions under the Code) and the amount
thereof will be measured by comparing the Unitholder's aliquot share of
the total proceeds from the transaction with his basis for his
fractional interest in the asset disposed of. Such basis is ascertained
by apportioning the tax basis for his Units (as of the date on which
his Units were acquired) among each of the Trust assets (as of the date
on which his Units were acquired) ratably according to their values as
of the valuation date nearest the date on which he purchased such
Units. A Unitholder's basis in his Units and of his fractional interest
in each Trust asset must be reduced, but not below zero, by the
Unitholder's pro rata portion of dividends with respect to each
Security which is not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in kind
distribution of Securities upon the redemption of Units or upon the
termination of the Trust. As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust's assets.
The receipt of an in kind distribution will result in a Unitholder
receiving an undivided interest in whole shares of stock and possibly
cash. The potential federal income tax consequences which may occur
under an in kind distribution with respect to each Security owned by
the Trust will depend upon whether or not a Unitholder receives cash in
addition to Securities. A "Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unitholder will
not recognize gain or loss if a Unitholder only receives Securities in
exchange for his or her pro rata portion in the Securities held by the
Trust. However, if a Unitholder also receives cash in exchange for a
fractional share of a Security held by the Trust, such Unitholder will
generally recognize gain or loss based upon the difference between the
amount of cash received by the Unitholder and his tax basis in such
fractional share of a Security held by the Trust. The total amount of
taxable gains (or losses) recognized upon such redemption will
generally equal the sum of the gain (or loss) recognized under the
rules described above by the redeeming Unitholder with respect to each
Security owned by the Trust.
A domestic corporation owning Units in the Trust may be eligible for
the 70% dividends received deduction pursuant to Section 243(a) of the Code with
respect to such Unitholder's pro rata portion of dividends received by the Trust
(to the extent such dividends are taxable as ordinary income, as discussed
above, and are attributable to domestic corporations), subject to the
limitations imposed by Sections 246 and 246A of the Code.
To the extent dividends received by a Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Section 67 of the Code provides that certain itemized deductions, such
as investment expenses, tax return preparation fees and employee business
expenses will be deductible by individuals only to the extent they exceed 2% of
such individual's adjusted gross income. Unitholders may be required to treat
some or all of the expenses of the Trust as miscellaneous itemized deductions
subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part of
his pro rata interest in a Security is either sold by the Trust or redeemed or
when a Unitholder disposes of his Units in a taxable transaction, in each case
for an amount greater (or less) than his tax basis therefor, subject to various
non-recognition provisions of the Code.
It should be noted that payments to a Trust of dividends on Securities
that are attributable to foreign corporations may be subject to foreign
withholding taxes and Unitholders should consult their tax advisers regarding
the potential tax consequences relating to the payment of any such withholding
taxes by the Trust. Any dividends withheld as a result thereof will nevertheless
be treated as income to the Unitholders. Because under the grantor trust rules,
an investor is deemed to have paid directly his share of foreign taxes that have
been paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect to such taxes. A
required holding period is imposed for such credits.
Any gain or loss recognized on a sale or exchange will, under current
law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
EXHIBIT 3.3
WINSTON & STRAWN
200 Park Avenue
New York, New York 10166-4193
September 21, 1999
Van Kampen Focus Portfolios, Series 181
c/o The Bank of New York, As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Van Kampen Focus Portfolios,
Series 181 (the "Fund") consisting of E-Commerce Software Growth Trust, Series 1
(individually, a "Trust" and, in the aggregate the "Trusts") for purposes of
determining the applicability of certain New York taxes under the circumstances
hereinafter described.
The Fund is created pursuant to a Trust Agreement (the "Indenture"),
dated as of today (the "Date of Deposit") among Van Kampen Funds Inc. (the
"Depositor"), American Portfolio Evaluation Services, a division of an affiliate
of the Depositor, as Evaluator, Van Kampen Investment Advisory Corp., an
affiliate of the Depositor, as Supervisory Servicer (the "Supervisory
Servicer"), and The Bank of New York, as trustee (the "Trustee"). As described
in the prospectus relating to the Fund dated today to be filed as an amendment
to a registration statement heretofore filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Prospectus") (File
Number 333-85921), the objectives of the Fund are to provide the potential for
dividend income and capital appreciation through investment in a fixed portfolio
of actively traded equity securities in the industries denominated in the
Trust's name. It is noted that no opinion is expressed herein with regard to the
Federal tax aspects of the securities, the Trust, units of the Trust (the
"Units"), or any income, gains or losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to the Trust the securities and/or contracts and cash for the
purchase thereof together with an irrevocable letter of credit in the amount
required for the purchase price of the securities comprising the corpus of the
Trust as more fully set forth in the Prospectus.
The Trustee did not participate in the selection of the securities to
be deposited in the Trust, and, upon the receipt thereof, will deliver to the
Depositor a registered certificate for the number of Units representing the
entire capital of the Trust as more fully set forth in the Prospectus. The
Units, which are represented by certificates ("Certificates"), will be offered
to the public upon the effectiveness of the registration statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with cash dividends
received by the Fund and with the proceeds from the disposition of securities
held in the Fund and the proceeds of the treasury obligation on maturity and the
distribution of such cash dividends and proceeds to the Unit holders. The
Trustee will also maintain records of the registered holders of Certificates
representing an interest in the Fund and administer the redemption of Units by
such Certificate holders and may perform certain administrative functions with
respect to an automatic reinvestment option.
Generally, equity securities held in the Trust may be removed therefrom
by the Trustee at the direction of the Depositor upon the occurrence of certain
specified events which adversely affect the sound investment character of the
Fund, such as default by the issuer in payment of declared dividends or of
interest or principal on one or more of its debt obligations.
Prior to the termination of the Fund, the Trustee is empowered to sell
equity securities designated by the Supervisory Servicer only for the purpose of
redeeming Units tendered to it and of paying expenses for which funds are not
available. The Trustee does not have the power to vary the investment of any
Unit holder in the Fund, and under no circumstances may the proceeds of sale of
any equity securities held by the Fund be used to purchase new equity securities
to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on business
corporations, and, for purposes of that Article, Section 208(l) defines the term
"corporation" to include, among other things, "any business conducted by a
trustee or trustees wherein interest or ownership is evidenced by certificate or
other written instrument."
The Regulations promulgated under Section 208 provide as follows:
A business conducted by a trustee or trustees in which
interest or ownership is evidenced by certificate or other
written instrument includes, but is not limited to, an
association commonly referred to as a "business trust" or
"Massachusetts trust". In determining whether a trustee or
trustees are conducting a business, the form of the agreement
is of significance but is not controlling. The actual
activities of the trustee or trustees, not their purposes and
powers, will be regarded as decisive factors in determining
whether a trust is subject to tax under Article 9-A. The mere
investment of funds and the collection of income therefrom,
with incidental replacement of securities and reinvestment of
funds, does not constitute the conduct of a business in the
case of a business conducted by a trustee or trustees. 20
NYCRR 1-2.5(b)(2) (July 11, 1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that where a
trustee merely invests funds and collects and distributes the income therefrom,
the trust is not engaged in business and is not subject to the franchise tax.
Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171 (3rd Dept. 1948), order
resettled, 274 A.D. 1083, 85 N.Y.S.2d 705 (3rd Dept. 1949).
In an Opinion of the Attorney General of the State of New York, 47 N.Y.
Att'y. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee of an
unincorporated investment trust was without authority to reinvest amounts
received upon the sales of securities and could dispose of securities making up
the trust only upon the happening of certain specified events or the existence
of certain specified conditions, the trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to, and we
assume will not, sell equity securities contained in the corpus of the Fund and
reinvest the proceeds therefrom. Further, the power to sell such equity
securities is limited to circumstances in which the credit-worthiness or
soundness of the issuer of such equity security is in question or in which cash
is needed to pay redeeming Unit holders or to pay expenses, or where the Fund is
liquidated subsequent to the termination of the Indenture. In substance, the
Trustee will merely collect and distribute income and will not reinvest any
income or proceeds, and the Trustee has no power to vary the investment of any
Unit holder in the Fund.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust will be
deemed to be the owner of the trust under certain circumstances, and therefore
taxable on his proportionate interest in the income thereof. Where this Federal
tax rule applies, the income attributed to the grantor will also be income to
him for New York income tax purposes. See TSB-M-78(9)(c), New York Department of
Taxation and Finance, June 23, 1978.
By letter dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder will be considered as
owning a share of each asset of the Trust in the proportion that the number of
Units held by such holder bears to the total number of Units outstanding and the
income of a Trust will be treated as the income of each Unit holder in said
proportion pursuant to Subpart E of Part I, Subchapter J of Chapter 1 of the
Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we specifically rely,
we are of the opinion that under existing laws, rulings, and court decisions
interpreting the laws of the State and City of New York:
1. The Trust will not constitute an association taxable as a
corporation under New York law, and, accordingly, will not be subject to
tax on its income under the New York State franchise tax or the New York
City general corporation tax.
2. The income of the Trust will be treated as the income of the Unit
holders under the income tax laws of the State and City of New York.
3. Unit holders who are not residents of the State of New York are not
subject to the income tax laws thereof with respect to any interest or gain
derived from the Fund or any gain from the sale or other disposition of the
Units, except to the extent that such interest or gain is from property
employed in a business, trade, profession or occupation carried on in the
State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name and the
reference to our firm in the Registration Statement and in the Prospectus.
Very truly yours,
WINSTON & STRAWN
EXHIBIT 4.1
Interactive Data
FINANCIAL TIMES Information
100 William Street, 15th Floor, New York, NY 10038 USA
Tel: (212) 269-6300 Fax: (212) 771-6445
September 20, 1999
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Re: Van Kampen Focus Portfolios, Series 181 E-Commerce Software Growth Trust,
Series 1 (A Unit Investment Trust) Registered Under the Securities Act of
1933, File No. 333-85921
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund, a copy of which is attached hereto.
We hereby consent to the reference in the Prospectus and Registration
Statement for the above captioned Fund to Interactive Data Corporation, as the
Evaluator, and to the use of the Obligations prepared by us which are referred
to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
Steve Miano
Director Fixed Income Data Operations
EXHIBIT 4.2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We have issued our report dated September 21, 1999 on the statement of
condition and related securities portfolio of Van Kampen Focus Portfolios,
Series 181 as of September 21, 1999 contained in the Registration Statement on
Form S-6 and Prospectus. We consent to the use of our report in the Registration
Statement and Prospectus and to the use of our name as it appears under the
caption "Other Matters-Independent Certified Public Accountants."
Grant Thornton LLP
Chicago, Illinois
September 21, 1999
