EXHIBIT 1.1
VAN KAMPEN FOCUS PORTFOLIOS
SERIES 245
TRUST AGREEMENT
Dated: September 5, 2000
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. 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.
7. 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.
8. 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.
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 January 10, 2001 and continuing through
May 10, 2001. 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.
10. Section 3.07(a) of the Standard Terms and Conditions of Trust is
hereby amended by adding the following Section 3.07(a)(x) immediately after
Section 3.07(a)(ix):
"(x) that there has been a public tender offer made for a
Security or a merger or acquisition is announced affecting a Security, and
that in the opinion of the Supervisory Servicer the sale or tender of the
Security is in the best interest of the Unitholders."
11. Sections 4.01(b) and (c) of the Standard Terms and Conditions of
Trust are hereby replaced in their entirety by the following:
(b) During the initial offering period such Evaluation shall be
made in the following manner: if the Securities are listed on a
national or foreign securities exchange or traded on the Nasdaq Stock
Market, Inc., such Evaluation shall generally be based on the last
available closing sale price on or immediately prior to the Evaluation
Time on the exchange or market which is the principal market therefor,
which shall be deemed to be the New York Stock Exchange if the
Securities are listed thereon (unless the Evaluator deems such price
inappropriate as a basis for evaluation) or, if there is no such
available closing sale price on such exchange or market at the last
available asked price of the Equity Securities. If the Securities are
not listed such an exchange or traded on the Nasdaq Stock Market, Inc.
or, if so listed and the principal market therefor is other than on
such exchange or market, or there is no such available sale price on
such exchange or market, such Evaluation shall generally be based on
the following methods or any combination thereof whichever the
Evaluator deems appropriate: (i) in the case of Equity Securities, on
the basis of the current asked price on the over-the-counter market
(unless the Evaluator deems such price inappropriate as a basis for
evaluation), (ii) on the basis of current offering prices for the Zero
Coupon Obligations as obtained from investment dealers or brokers who
customarily deal in securities comparable to those held by the Fund,
(iii) if offering prices are not available for the Zero Coupon
Obligations or the Equity Securities, on the basis of offering or
asked price for comparable securities, (iv) by determining the
valuation of the Zero Coupon Obligations or the Equity Securities on
the offering or asked side of the market by appraisal or (v) by any
combination of the above. If the Trust holds Securities denominated in
a currency other than U.S. dollars, the Evaluation of such Security
shall be converted to U.S. dollars based on current offering side
exchange rates (unless the Evaluator deems such prices inappropriate
as a basis for valuation). The Evaluator may add to the Evaluation of
each Security which is principally traded outside of the United States
the amount of any commissions and relevant taxes associated with the
acquisition of the Security. As used herein, the closing sale price is
deemed to mean the most recent closing sale price on the relevant
securities exchange immediately prior to the Evaluation time. For each
Evaluation, the Evaluator shall also confirm and furnish to the
Trustee and the Depositor, on the basis of the information furnished
to the Evaluator by the Trustee as to the value of all Trust assets
other than Securities, the calculation of the Trust Evaluation to be
computed pursuant to Section 5.01.
(c) For purposes of the Trust Evaluations required by Section
5.01 in determining Redemption Value and Unit Value, Evaluation of the
Securities shall be made in the manner described in Section 4.01(b),
on the basis of current bid prices for the Zero Coupon Obligations,
the bid side value of the relevant currency exchange rate expressed in
U.S. dollars and, except in those cases in which the Equity Securities
are listed on a national or foreign securities exchange or traded on
the Nasdaq Stock Market, Inc. and the last available sale prices are
utilized, on the basis of the last available bid price of the Equity
Securities. In addition, the Evaluator (i) shall not make the addition
specified in the fourth sentence of Section 4.01(b) and (ii) may
reduce the Evaluation of each Security which is principally traded
outside of the United States by the amount of any liquidation costs
and any capital gains or other taxes which would be incurred by the
Trust upon the sale of such Security, such taxes being computed as if
the Security were sold on the date of the Evaluation.
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
American Portfolio Evaluation Services,
a division of Van Kampen Investment Advisory Corp.
By James J. Boyne
-------------------------------------
Senior Vice President
Van Kampen Investment Advisory Corp.
By James J. Boyne
---------------------------------------
Senior Vice President
The Bank of New York
By Linda Bommer
----------------------------
Vice President
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SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 245
(Note: Incorporated herein and made a part hereof
is each "Portfolio" as set forth in the Prospectus.)
