AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1996
REGISTRATION NO. 333-08275
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
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:
Qualified Unit Investment Liquid Trust Series ("QUILTS"), QUILTS
Income -- U.S. Treasury Series 19, QUILTS Income -- U.S. Treasury
Series 20 and QUILTS Asset Builder -- U.S. Treasury Series 21
B. NAME OF DEPOSITOR:
OCC Distributors
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
OCC Distributors
Two World Financial Center
225 Liberty Street
New York, New York 10281
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
COPY OF COMMENTS TO:
SUSAN A. MURPHY MICHAEL R. ROSELLA, Esq.
Senior Vice President Battle Fowler LLP
Quest Cash Management Services Park Avenue Tower
Oppenheimer Capital 75 East 55th Street
Two World Financial Center New York, New York 10022
225 Liberty Street (212) 856-6858
New York, New York 10281
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Qualified Unit Investment Liquid
Trust Series ("QUILTS"), QUILTS Income -- U.S. Treasury Series 19,
QUILTS Income -- U.S. Treasury Series 20 and QUILTS Asset Builder --
U.S. Treasury Series 21 is being registered under the Securities Act
of 1933 pursuant to Section 24(f) of the Investment Company Act of
1940, as amended, and Rule 24f-2 thereunder.
F. PROPOSED MAXIMUM AGGREGATE OFFERING PRICE TO THE PUBLIC OF THE SECURITIES
BEING REGISTERED:
Indefinite
G. AMOUNT OF FILING FEE:
$500* (as required by Rule 24f-2)
H. APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the Registration
Statement. X
/X/ Check if it is proposed that this filing will become effective
immediately upon filing pursuant to Rule 487.
- --------------------------
* Previously paid.
<PAGE>
Qualified Unit Investment Liquid Trust Series
QUILTS Income -- U.S. Treasury Series 19
QUILTS Income -- U.S. Treasury Series 20
QUILTS Asset Builder -- U.S. Treasury Series 21
CROSS-REFERENCE SHEET
Pursuant to Rule 404 of Regulation C
Under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction as
to the Prospectus in Form S-6)
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C>
1. (a) Name of trust.......................................... Front cover of Prospectus
(b) Title of securities issued............................. Front cover of Prospectus
2. Name and address of each depositor.......................... The Sponsor
3. Name and address of trustee................................. The Trustee
4. Name and address of principal underwriters.................. Distribution of Units
5. State of organization of trust.............................. Organization
6. Execution and termination of trust agreement................ Trust Agreement, Amendment and
Termination
7. Changes of name............................................. Not Applicable
8. Fiscal year................................................. Not Applicable
9. Litigation.................................................. None
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer securities........................ Book Entry Units
(b) Cumulative or distributive securities.................. Interest and Principal Distributions
(c) Redemption............................................. Trustee Redemption
(d) Conversion, transfer, etc.............................. Book Entry Units, Sponsor Repurchase,
Trustee Redemption
(e) Periodic payment plan.................................. Not Applicable
(f) Voting rights.......................................... Trust Agreement, Amendment and
Termination
(g) Notice to certificateholders........................... Records, Portfolio, Substitution of Securities,
Trust Agreement, Amendment and
Termination, The Sponsor, the Trustee
(h) Consents required...................................... Trust Agreement, Amendment and Termination
(i) Other provisions....................................... Tax Status
11. Type of securities comprising units......................... Objectives, Portfolio, Portfolio Summary
12. Certain information regarding periodic payment
certificates................................................ Not Applicable
i
303942.1
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
13. (a) Load, fees, expenses, etc.............................. Summary of Essential Information, Public
Offering Price, Market for Units, Volume and
Other Discounts, Sponsor's Profits, Trust
Expenses and Charges
(b) Certain information regarding periodic
payment certificates................................... Not Applicable
(c) Certain percentages.................................... Summary of Essential Information, Public
Offering Price, Market for Units, Volume
and Other Discounts
(d) Price differences...................................... Volume and Other Discounts, Distribution of
Units
(e) Other loads, fees, expenses............................ Book Entry Units
(f) Certain profits receivable by depositors,
principal underwriters, trustee or
affiliated persons..................................... Sponsor's Profits, Portfolio Summary
(g) Ratio of annual charges to income...................... Not Applicable
14. Issuance of trust's securities.............................. Organization, Certificates
15. Receipt and handling of payments from purchasers............ Organization
16. Acquisition and disposition of underlying
securities.................................................. Organization, Objectives, Portfolio, Portfolio
Supervision
17. Withdrawal or redemption.................................... Comparison of Public Offering Price,
Sponsor's Repurchase Price and Redemption
Price, Sponsor Repurchase, Trustee
Redemption
18. (a) Receipt, custody and disposition of income............. Monthly Distributions, Interest and Principal
Distributions, Portfolio Supervision
(b) Reinvestment of distributions.......................... Not Applicable
(c) Reserves or special funds.............................. Interest and Principal Distributions
(d) Schedule of distributions.............................. Not Applicable
19. Records, accounts and reports............................... Records
20. Certain miscellaneous provisions of trust
agreement
(a) Amendment.............................................. Trust Agreement, Amendment and Termination
(b) Termination............................................ Trust Agreement, Amendment and Termination
(c) and (d) Trustee, removal and successor.................. The Trustee
(e) and (f) Depositor, removal and successor................ The Sponsor
21. Loans to security holders................................... Not Applicable
22. Limitations on liability.................................... The Sponsor, The Trustee, The Evaluator
23. Bonding arrangements........................................ Part II - Item A
24. Other material provisions of trust agreement................ Not Applicable
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of depositor................................... The Sponsor
26. Fees received by depositor.................................. Not Applicable
ii
303942.1
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
27. Business of depositor....................................... The Sponsor
28. Certain information as to officials and affiliated
persons of depositor........................................ Not Applicable
29. Voting securities of depositor.............................. Not Applicable
30. Persons controlling depositor............................... Not Applicable
31. Payments by depositor for certain services
rendered to trust........................................... Not Applicable
32. Payments by depositor for certain other services
rendered to trust........................................... Not Applicable
33. Remuneration of employees of depositor for
certain services rendered to trust.......................... Not Applicable
34. Remuneration of other person for certain services
rendered to trust........................................... Not Applicable
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities by states................ Distribution of Units
36. Suspension of sales of trust's securities................... Not Applicable
37. Revocation of authority to distribute....................... None
38. (a) Method of distribution................................. Distribution of Units
(b) Underwriting agreements................................ Distribution of Units
(c) Selling agreements..................................... Distribution of Units
39. (a) Organization of principal underwriters................. The Sponsor
(b) N.A.S.D. membership of principal
underwriters........................................... The Sponsor
40. Certain fees received by principal underwriters............. The Sponsor
41. (a) Business of principal underwriters..................... The Sponsor
(b) Branch offices of principal underwriters............... The Sponsor
(c) Salesmen of principal underwriters..................... The Sponsor
42. Ownership of trust's securities by certain persons.......... Not Applicable
43. Certain brokerage commissions received by
principal underwriters...................................... Not Applicable
44. (a) Method of valuation.................................... Summary of Essential Information, Market for
Units, Offering Price, Accrued Interest,
Volume and Other Discounts, Distribution of
Units, Comparison of Public Offering Price,
Sponsor's Repurchase Price and Redemption
Price, Sponsor Repurchase, Trustee
Redemption
(b) Schedule as to offering price.......................... Summary of Essential Information
(c) Variation in offering price to certain
persons................................................ Distribution of Units, Volume and Other
Discounts
45. Suspension of redemption rights............................. Not Applicable
iii
303942.1
<PAGE>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
46. (a) Redemption valuation................................... Comparison of Public Offering Price,
Sponsor's Repurchase Price and Redemption
Price, and Redemption Price, and Trustee
Redemption
(b) Schedule as to redemption price........................ Summary of Essential Information
47. Maintenance of position in underlying securities............ Comparison of Public Offering Price,
Sponsor's Repurchase Price and Redemption
Price, Sponsor Repurchase, Trustee
Redemption
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of trustee...................... The Trustee
49. Fees and expenses of trustee................................ Trust Expenses and Charges
50. Trustee's lien.............................................. Trust Expenses and Charges
VI. Policy of Registrant
51. (a) Provisions of trust agreement with respect
to selection or elimination of underlying
securities............................................. Objectives, Portfolio, Portfolio Supervision,
Substitution of Securities
(b) Transactions involving elimination of
underlying securities.................................. Not Applicable
(c) Policy regarding substitution or elimination
of underlying securities............................... Substitution of Securities
(d) Fundamental policy not otherwise covered............... Not Applicable
52. Tax status of trust......................................... Tax Status
VII. FINANCIAL AND STATISTICAL INFORMATION
53. Trust's securities during last ten years.................... Not Applicable
54. Hypothetical account for issuers of periodic
payment plans............................................... Not Applicable
55. Certain information regarding periodic payment
certificates................................................ Not Applicable
56. Certain information regarding periodic payment
plans.........................................Not Applicable
57. Certain other information regarding periodic
payment plans............................................... Not Applicable
58. Financial statements (Instruction 1(c) to Form
S-6) ....................................................... Statement of Financial Condition
</TABLE>
iv
303942.1
<PAGE>
("QUILTS")
QUALIFIED UNIT INVESTMENT LIQUID TRUST SERIES
A Unit Investment Trust
QUILTS Income--U.S. Treasury Series 19
QUILTS Income--U.S. Treasury Series 20
QUILTS Asset Builder--U.S. Treasury Series 21
QUILTS consists of three separate unit investment trusts designated
QUILTS Income--U.S. Treasury Series 19, QUILTS Income--U.S. Treasury Series 20
and QUILTS Asset Builder--U.S. Treasury Series 21 (collectively, the "Trusts").
The Sponsor of the Trusts is OCC Distributors (the "Sponsor"). The objective of
the Trusts is to provide safety of principal. QUILTS Income--U.S. Treasury
Series 19 seeks to provide current quarterly distributions of income and QUILTS
Income--U.S. Treasury Series 20 seeks to provide current monthly distributions
of income. With respect to QUILTS Asset Builder--U.S. Treasury Series 21, the
Trust seeks to accumulate principal value in the Units over the life of the
Trust. Each Trust seeks to achieve these objectives by investing in a portfolio
of U.S. Treasury Obligations (the "Treasury Securities") that are backed by the
full faith and credit of the United States Government (the Treasury Securities
are sometimes collectively referred to as the "Securities"). Each Trust is
designed to have regularly scheduled payments of principal during its life from
a portfolio of Securities with laddered maturities. The value of the Units of
the Trusts will fluctuate with fluctuations in the value of the underlying
Securities in the portfolios of each Trust. Therefore, Unit Holders who sell
their Units prior to termination of the Trusts may receive more or less than
their original purchase price upon sale. Units of the Trusts may be suited for
purchase by IRAs, self-employed retirement plans (formerly Keogh Plans),
pension, profit-sharing and other qualified retirement plans. Investors
considering participation in any such plan should review specific tax laws and
pending legislation related thereto and should consult their attorneys or tax
advisers with respect to the establishment and maintenance of any such plan.
(See "Retirement Plans" and "Tax Status" in Part B of this Prospectus.) The
minimum purchase is 1,000 Units for individual purchases, and 250 Units for
purchases by Individual Retirement Accounts, self-employed retirement plans
(formerly Keogh Plans), pension funds and other tax-deferred retirement plans.
These Trusts may be particularly appropriate for foreign investors
as the income from the Trusts, provided certain conditions are met, will be
exempt from withholding for U.S. Federal income tax purposes. A foreign
investor must provide a completed W-8 Form to his financial representative or
the Trustee to avoid withholding on his account. The Trusts may also be
appropriate for investors who desire to participate in a portfolio of taxable
fixed income securities offering the safety of principal provided by an
investment backed by the full faith and credit of the United States. In
addition, many investors may benefit from the exemption from state and local
personal income taxes that will pass through the Trusts to Unit Holders.
This Prospectus consists of two parts. Part A contains a Summary of
Essential Information for each Trust including descriptive material relating to
each Trust, the Statement of Condition of the Trusts and the Portfolios of each
Trust. Part B contains general information about the Trusts. Part A may not be
distributed unless accompanied by Part B.
QUILTS are not a deposit or other obligation of, or guaranteed by, a
depository institution. QUILTS are not insured by the FDIC and are subject to
investment risks, including possible loss of the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES CORPORATION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED
JULY 24, 1996 Please read and retain both
parts of this Prospectus for future
reference.
387312.1
<PAGE>
QUILTS Income
U.S. Treasury Series 19
SUMMARY OF ESSENTIAL INFORMATION AS OF JULY 23, 1996 (The initial Date of
Deposit which is the date on which the Trust Agreement was signed and the
deposit of Securities with the Trustee was made.)
<TABLE>
<S> <C>
CUSIP#: 747938132 Evaluation Time: 12:00 Noon New York Time on
Sponsor: OCC Distributors the initial Date of Deposit and 4:00 P.M. thereafter.
Date of Deposit: July 23, 1996 Minimum Purchase: 1,000 Units
Aggregate Principal Amount Minimum Principal Distribution: $1.00 per 1,000
of Securities:...................................$ 250,000 Units.
Number of Units: (The number of Units will be Weighted Average Maturity of Securities in the Portfolio:
increased as the Sponsor deposits additional 2 Years
Securities into the Trust.)........................250,000 Minimum Value of Trust: The Trust may be
Fractional Undivided Interest in Trust terminated if the value of the Securities in the Trust is less
per 1,000 Units:.....................................1/250 than 40% of the original aggregate principal amount of
Public Offering Price: Securities in the Trust.
Aggregate Offering Price of Securities Mandatory Termination Date: The earlier of January 31, 2000
in Trust.....................................$ 245,242 or the disposition of the last Security in the Trust.
Divided By 250,000 Units multiplied by 1,000......$ 980.97 Trustee and Evaluator: The Chase Manhattan Bank.
Plus Sales Charge of 1.70% of Public Offering Trustee's Annual Fee and Estimated Expenses:
Price..........................................$ 16.96 $1.00 per 1,000 Units.
Public Offering Price per 1,000 Units(1)..........$ 997.93 Annual Supervisory Fee (Payable to an affiliate of the Sponsor):
Redemption Price per 1,000 Units..................$ 980.34 Maximum of $.10 per $1,000 principal amount of
Sponsor's Initial Repurchase Price Securities (see "Trust Expenses and Charges" in Part B).
per 1,000 Units:..............................$ 980.97
Excess of Public Offering Price Over
Redemption Price per 1,000 Units:..................$ 17.59
Excess of Sponsor's Initial Repurchase Price
Over Redemption Price per 1,000 Units:...............$ .63
</TABLE>
INFORMATION PER 1,000 UNITS
BASED UPON QUARTERLY DISTRIBUTIONS
<TABLE>
<S> <C>
Gross annual interest income (cash)..................................................................................... $53.00
Less organizational expenses(4)......................................................................................... .20
Less estimated annual fees and expenses(5).............................................................................. 1.10
-----
Estimated net annual interest income (cash)(2).......................................................................... 51.70
Estimated daily interest accrual (Does not include income accrual from original issue
discount bonds.)................................................................................................... .144
Estimated current return based on Public Offering Price (Does not include income accrual
from original issue discount bonds. The estimated current return is increased for transactions
entitled to a discount.)(5)........................................................................................ 5.18%
Estimated long term return (Does not include income accrual from original issue discount bonds.
The estimated long-term return is increased for transactions entitled to a discount.)(3)(5)........................ 5.29%
First record date..............................................................................................October 15, 1996
First interest payment date....................................................................................October 31, 1996
Subsequent record dates................................................................. 15th day of last month of each quarter
Subsequent interest payment dates......................................................................Last day of each quarter
</TABLE>
(1) No accrued interest will be added for any person contracting to purchase
Units on the date of this Prospectus. Anyone ordering Units after such
Date will pay accrued interest from July 29, 1996 to the date of the
settlement (three business days after order) (the "First Settlement
Date"), less distributions from the Interest Account subsequent to July
29, 1996.
(2) The first interest distribution of $10.91 per 1,000 Units for Treasury
Income Series 19 will be made on October 31, 1996 (the "First Payment
Date") to all Unit Holders of record on October 15, 1996 (the "First
Record Date"). The first regular quarterly payment per 1,000 Units of
Treasury Income Series 19 will be $12.92 on January 31, 1997. For a
schedule of the regular quarterly payments (the "Quarterly Payment Date")
see "Estimated Cash Flows to Unit Holders."
A-2
387312.1
<PAGE>
(3) Estimated long term return is calculated by each Trust by computing the
average of the yields to maturity (or earlier call date) of the Securities
in the portfolio of the Trust in accordance with accepted practices
(taking into account the amortization of premiums, accretion of discounts,
market value, and estimated retirement of each Security) and subtracting
from the average yield so calculated the fees, expenses and sales charge
of each Trust. Estimated current return is calculated by dividing the
estimated net annual interest income by the Public Offering Price per
Unit. In contrast to the estimated long term return, the estimated current
return does not take into account the amortization of premium or accretion
of discount on the underlying Securities, if any. These returns do not
include the effects of any delay in payments to Unit Holders and a
calculation which includes those effects would be lower. See "Estimated
Long Term Return and Estimated Current Return" in Part B.
(4) Although historically the sponsors of unit investment trusts ("UITs")"
have paid all of the costs of establishing UITs, this Trust (and therefore
the Unit Holders) will bear all or a portion of its organizational costs
up to a maximum of $.20 per $1,000 Units per annum for Treasury Income
Series 19. Such organizational costs include: the cost of preparing and
printing the registration statement, the trust indenture and other closing
documents; and the initial audit of the Trust. Total organizational
expenses will be amortized over the life of the Trust for Treasury Income
Series 19. See "Trust Expenses and Changes" in Part B.
(5) Assumes the Trust will reach a size of 10,000,000 Units as estimated by
the Sponsor; expenses per Unit will vary with the actual size of the
Trust. If the Trust does not reach this Unit level, the Estimated Annual
Fees and Expenses per Unit, the Estimated Current Return and the Estimated
Long Term Return will be adversely affected.
A-3
387312.1
<PAGE>
QUILTS Income
U.S. Treasury Series 20
SUMMARY OF ESSENTIAL INFORMATION AS OF JULY 23, 1996 (The initial Date of
Deposit which is the date on which the Trust Agreement was signed and the
deposit of Securities with the Trustee was made.)
<TABLE>
<S> <C>
CUSIP#: 747938140 Evaluation Time: 12:00 Noon New York Time on
Sponsor: OCC Distributors the initial Date of Deposit and 4:00 P.M. thereafter.
Date of Deposit: July 23, 1996 Minimum Purchase: 1,000 Units
Aggregate Principal Amount Minimum Principal Distribution: $1.00 per 1,000
of Securities:.........................................$ 250,000 Units.
Number of Units: (The number of Units will be Weighted Average Maturity of Securities in the
increased as the Sponsor deposits additional Portfolio: 3.37 Years
Securities into the Trust.)..............................250,000 Minimum Value of Trust: The Trust may be
Fractional Undivided Interest in Trust terminated if the value of the Securities in the Trust is
per 1,000 Units:...........................................1/250 less than 40% of the original aggregate principal
Public Offering Price: amount of Securities in the Trust.
Aggregate Offering Price of Securities Mandatory Termination Date: The earlier of
in Trust............................................$247,008 June 30, 2002, or the disposition of the last
Divided By 250,000 Units multiplied by 1,000.............$988.03 Security in the Trust.
Plus Sales Charge of 1.80% of Public Offering Trustee and Evaluator: The Chase Manhattan Bank.
Price.................................................$18.11 Trustee's Annual Fee and Estimated Expenses:
Public Offering Price per 1,000 Units(1)...............$1,006.14 $1.25 per 1,000 Units.
Redemption Price per 1,000 Units.........................$987.47 Annual Supervisory Fee (Payable to an affiliate of the
Sponsor's Initial Repurchase Price Sponsor): Maximum of $.10 per $1,000
per 1,000 Units:.....................................$988.03 principal amount of Securities (see "Trust Expenses
Excess of Public Offering Price Over and Charges" in Part B).
Redemption Price per 1,000 Units:.........................$18.67
Excess of Sponsor's Initial Repurchase Price
Over Redemption Price per 1,000 Units:......................$.56
</TABLE>
INFORMATION PER 1,000 UNITS
BASED UPON MONTHLY DISTRIBUTIONS
<TABLE>
<S> <C>
Gross annual interest income (cash)......................................................................... $60.50
Less organizational expenses(4)............................................................................. .20
Less estimated annual fees and expenses(5).................................................................. 1.35
------
Estimated net annual interest income (cash)(2).............................................................. 8.95
Estimated daily interest accrual (Does not include income accrual from original issue
discount bonds.)....................................................................................... .164
Estimated current return based on Public Offering Price (Does not include income accrual
from original issue discount bonds. The estimated current return is increased for transactions
entitled to a discount.)(5)............................................................................ 5.86%
Estimated long term return (Does not include income accrual from original issue discount bonds.
The estimated long-term return is increased for transactions entitled to a discount.)(3)(5)............ 5.81%
First record date........................................................................................... August 15, 1996
First interest payment date................................................................................. August 31, 1996
Subsequent record dates.....................................................................................15th day of each month
Subsequent interest payment dates...........................................................................Last day of each month
</TABLE>
(1) No accrued interest will be added for any person contracting to purchase
Units on the date of this Prospectus. Anyone ordering Units after such
Date will pay accrued interest from July 29, 1996 to the date of the
settlement (three business days after order) (the "First Settlement
Date"), less distributions from the Interest Account subsequent to July
29, 1996.
(2) The first interest distribution of $2.62 per 1,000 Units for Treasury
Income Series 20 will be made on August 31, 1996 (the "First Payment
Date") to all Unit Holders of record on August 15, 1996 (the "First Record
Date"). The first regular monthly payment per 1,000 Units of Treasury
Income
A-4
387312.1
<PAGE>
Series 20 will be $4.91 on September 30, 1996. For a schedule of the
regular monthly payments (the "Monthly Payment Date") see "Estimated Cash
Flows to Unit Holders."
(3) Estimated long term return is calculated by each Trust by computing the
average of the yields to maturity (or earlier call date) of the Securities
in the portfolio of the Trust in accordance with accepted practices
(taking into account the amortization of premiums, accretion of discounts,
market value, and estimated retirement of each Security) and subtracting
from the average yield so calculated the fees, expenses and sales charge
of each Trust. Estimated current return is calculated by dividing the
estimated net annual interest income by the Public Offering Price per
Unit. In contrast to the estimated long term return, the estimated current
return does not take into account the amortization of premium or accretion
of discount on the underlying Securities, if any. These returns do not
include the effects of any delay in payments to Unit Holders and a
calculation which includes those effects would be lower. See "Estimated
Long Term Return and Estimated Current Return" in Part B.
(4) Although historically the sponsors of unit investment trusts ("UITs")"
have paid all of the costs of establishing UITs, this Trust (and therefore
the Unit Holders) will bear all or a portion of its organizational costs
up to a maximum of $.20 per $1,000 Units per annum for Treasury Income
Series 20. Such organizational costs include: the cost of preparing and
printing the registration statement, the trust indenture and other closing
documents; and the initial audit of the Trust. Total organizational
expenses will be amortized over the life of the Trust for Treasury Income
Series 20. See "Trust Expenses and Changes" in Part B.
(5) Assumes the Trust will reach a size of 10,000,000 Units as estimated by
the Sponsor; expenses per Unit will vary with the actual size of the
Trust. If the Trust does not reach this Unit level, the Estimated Annual
Fees and Expenses per Unit, the Estimated Current Return and the Estimated
Long Term Return will be adversely affected.
A-5
387312.1
<PAGE>
QUILTS Asset Builder
U.S. Treasury Series 21
SUMMARY OF ESSENTIAL INFORMATION AS OF JULY 23, 1996 (The initial Date of
Deposit which is the date on which the Trust Agreement was signed and the
deposit of Securities with the Trustee was made.)
<TABLE>
<S> <C>
CUSIP#: 747938157 Evaluation Time: 12:00 Noon New York Time on
Sponsor: OCC Distributors the initial Date of Deposit and 4:00 P.M. thereafter.
Date of Deposit: July 23, 1996 Minimum Purchase: 1,000 Units
Aggregate Principal Amount Minimum Principal Distribution: $1.00 per 1,000
of Securities:................................$ 250,000 Units.
Number of Units: (The number of Units will be Weighted Average Maturity of Securities in the Portfolio:
increased as the Sponsor deposits additional 2.92 Years
Securities into the Trust.).....................250,000 Minimum Value of Trust: The Trust may be
Fractional Undivided Interest in Trust terminated if the value of the Securities in the Trust is less than
per 1,000 Units:..................................1/250 40% of the original aggregate principal amount of Securities in
Public Offering Price: the Trust.
Aggregate Offering Price of Securities Mandatory Termination Date: The earlier of August 15, 2002,
in Trust...................................$207,637 or the disposition of the last Security in the Trust.
Divided By 250,000 Units multiplied by 1,000....$830.55 Trustee and Evaluator: The Chase Manhattan Bank.
Plus Sales Charge of 1.80% of Public Offering Trustee's Annual Fee and Estimated Expenses:
Price........................................$15.22 $ .55 per 1,000 Units.
Public Offering Price per 1,000 Units(1)........$845.77 Annual Supervisory Fee (Payable to an affiliate of the Sponsor):
Redemption Price per 1,000 Units................$830.08 Maximum of $.10 per $1,000 principal amount of Securities
Sponsor's Initial Repurchase Price (see "Trust Expenses and Charges" in Part B).
per 1,000 Units:............................$830.55
Excess of Public Offering Price Over
Redemption Price per 1,000 Units:................$15.69
Excess of Sponsor's Initial Repurchase Price
Over Redemption Price per 1,000 Un.47:.............$.47
</TABLE>
INFORMATION PER 1,000 UNITS
<TABLE>
<S> <C>
Gross annual interest income (cash) (Does not include income accrued from original issue discount bonds.)............... $.95
Less organization expenses(3)........................................................................................... .20
Less estimated annual fees and expenses (The Trustee will retain excess interest income in the Trust to pay
future expenses.)(4)............................................................................................... .65
---
Estimated net annual interest income (cash) (Does not include income accrual
from original issue discount
bonds.)............................................................................................................ 10
Estimated long term return (Does not include income accrual from original issue discount bonds.
The estimated long term return is increased for transactions entitled to a discount.)(2)(4)........................ 5.76%
</TABLE>
(1) No accrued interest will be added for any person contracting to purchase
Units on the date of this Prospectus. Anyone ordering Units after such
Date will pay accrued interest from July 29, 1996 to the date of
settlement (three business days after order) (the "First Settlement
Date"), less distributions from the Interest Account subsequent to July
29, 1996.
(2) Estimated long term return is calculated by each Trust by computing the
average of the yields to maturity (or earlier call date) of the Securities
in the portfolio of the Trust in accordance with accepted practices
(taking into account the amortization of premiums, accretion of discounts,
market value, and estimated retirement of each Security) and subtracting
from the average yield so calculated the fees, expenses and sales charge
of each Trust. This return does not include the effects of any delay in
payments to Unit Holders and a calculation which includes those effects
would be lower. See "Estimated Long Term Return and Estimated Current
Return" in Part B.
(3) Although historically the sponsors of unit investment trusts ("UITs") have
paid all of the costs of establishing UITs, this Trust (and therefore the
Unit Holders) will bear all or a portion of its organizational costs up to
a maximum of $.20 per 1,000 Units per annum for Asset Builder Series 21.
Such organizational costs include: the cost of preparing and printing the
registration statement, the trust indenture and other closing documents;
and the initial audit of the Trust. Total organizational expenses will be
amortized over the life of Asset Builder Series 21. See "Trust Expenses
and Changes" in Part B.
(4) Assumes the Trust will reach a size of 10,000,000 Units as estimated by
the Sponsor; expenses per Unit will vary with the actual size of the
Trust. If the Trust does not reach this Unit level, the Estimated Annual
Fees and Expenses per Unit, the Estimated Current Return and the Estimated
Long Term Return will be adversely affected.
A-6
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<PAGE>
QUALIFIED
UNIT INVESTMENT LIQUID TRUST SERIES
("QUILTS")
The Trusts. QUILTS consists of three separate unit investment trusts
designated QUILTS Income--U.S. Treasury Series 19 ("Treasury Income Series
19"), QUILTS Income--U.S. Treasury Series 20 ("Treasury Income Series 20"), and
QUILTS Asset Builder--U.S. Treasury Series 21 ("Asset Builder Series" or "Asset
Builder Series 21") (collectively, the "Trusts"). The Trusts were created under
the laws of the State of New York by a Trust Indenture and Agreement (the
"Trust Agreement"), dated the initial Date of Deposit, between OCC
Distributors, as sponsor (the "Sponsor") and The Chase Manhattan Bank, as
trustee (the "Trustee"). The Trustee will also act as the Evaluator for the
Trusts. On the initial Date of Deposit, the Sponsor deposited with the Trustee
United States Treasury Obligations that are backed by the full faith and credit
of the United States Government, including delivery statements relating to
contracts for the purchase of certain such Securities (the "Securities") in the
aggregate amount set forth in the "Summary of Essential Information" for each
Trust and cash or an irrevocable letter of credit issued by a major commercial
bank in the amount required for such purchases. Thereafter, the Trustee, in
exchange for the Securities so deposited, delivered to the Sponsor a
certificate evidencing the ownership of all of the Units of the Trusts, which
Units are being offered by this Prospectus. On the initial Date of Deposit,
each Unit in the Trusts represents an undivided interest in the principal and
net income of that Trust in the ratio of one Unit for each $1.00 principal
amount of Securities initially deposited in that Trust. (See "The Trust
Organization" in Part B.)
Objectives. The objective of the Trusts is to obtain safety of
principal. Treasury Income Series 19 seeks to provide current quarterly
distributions of income and Treasury Income Series 20 seeks to provide current
monthly distributions of income. With respect to Asset Builder Series 21, the
Trust seeks to accumulate principal value in the Units over the life of the
Trust. The Trusts also seek to provide investment flexibility by allowing
investors to choose among three portfolios of Securities, each with a differing
weighted average maturity and quality. The Trusts seek to achieve these
objectives through investment in a fixed, laddered portfolio of United States
Treasury Securities. The Trusts are also structured to provide protection
against changes in interest rates and to pass through to Unit Holders the
exemption from state personal income taxes afforded to direct owners of United
States obligations.
99% of the aggregate principal amount of the Securities in Asset
Builder Series 21 are stripped U.S. Treasury notes or bonds with maturities of
1 year or more (hereinafter referred to as "Zero Coupon Bonds"). 1% of the
aggregate principal amount of the Securities in Asset Builder Series 21 are
interest-bearing securities which are used to pay the expenses of this Trust.
Any excess amounts remaining after expenses are paid will be paid to Unit
Holders of this Trust in cash. Zero Coupon Bonds provide for payment at
maturity at par value, but do not provide for the payment of current interest.
(For the amount of Zero Coupon Bonds in Asset Builder Series 21, and the cost
of such Securities to that Trust, see "Portfolio" for Asset Builder Series 21
in this Part A). Investors generally will be required to recognize interest
currently, even though they will not receive a corresponding amount of cash
until later years. Long-term capital gains based upon the difference, if any,
between the value of the Securities at maturity, redemption or sale and their
original purchase price at discount (plus the earned portion of acquisition
discount) are generally taxed, in the case of individuals, at a rate less than
the rate applicable to ordinary income. (See "Tax Status" in Part B.)
Investment in Asset Builder Series 21 should be made with the understanding
that the value of Zero Coupon Bonds may be subject to greater fluctuation in
response to changes in interest rates that interest-bearing Securities. In
addition, for certain investors, the accrual of the market discount from the
Zero Coupon Bonds is not taxable until the Securities in Asset Builder Series
21 are disposed of or mature. (See "Tax Status" in Part B.) Any gain realized
on the disposition or maturities of these securities is treated as ordinary
interest income
A-7
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<PAGE>
to the extent it represents accrued market discount. Any excess over that
amount would generally be treated as long-term capital gain if held for more
than 1 year.
The Treasury Securities are direct obligations of the United States
and are backed by its full faith and credit. The value of the Units, the
estimated current return (not applicable to Asset Builder Series 21) and
estimated long-term return to new purchasers will fluctuate with the value of
the Securities included in the portfolio of each Trust which will generally
decrease or increase inversely with changes in prevailing interest rates. See
"Tax Status" in Part B of this Prospectus.
With the deposit of the Securities in the Trusts on the initial Date
of Deposit, the Sponsor established a proportionate relationship among the face
amounts of each Security in the portfolio of each Trust. During the 90-day
period following the initial Date of Deposit, the Sponsor may deposit
additional Securities ("Additional Securities"), contracts to purchase
Additional Securities or cash (or a bank letter of credit in lieu of cash) with
instructions to purchase Additional Securities, in order to create new Units,
maintaining to the extent practicable the original proportionate relationship
among the face amounts of each Security in the portfolio of each Trust. It may
not be possible to maintain the exact original proportionate relationship among
the Securities deposited on the initial Date of Deposit because of, among other
reasons, purchase requirements, change in prices, or unavailability of
Securities. Replacement Securities may be acquired under specified conditions
(see "The Trust" and "Trust Administration" in Part B of this Prospectus).
Units may be continuously offered to the public by means of this Prospectus
(see "Public Offering" in Part B) resulting in a potential increase in the
number of Units outstanding. Deposits of Additional Securities in the portfolio
of each Trust subsequent to the 90-day period following the initial Date of
Deposit must replicate exactly the proportionate relationship among the face
amounts of Securities comprising the portfolio of each Trust at the end of the
initial 90-day period. No assurance can be given that the Trusts' objectives
will be achieved. In addition, an investment in a Trust can be affected by
fluctuations in interest rates.
Portfolio Summaries. General. The Trusts are comprised of those
Securities listed in each "Portfolio" in this Part A. The portfolio of each
Trust initially consists of contracts to purchase U.S. Treasury Obligations
fully secured by the full faith and credit of the United States, certain of
which have been purchased at a market discount or premium. Certain Securities
may have been purchased on a "when, as, and if" issued basis. Interest on these
Securities begins accruing to the benefit of holders on their respective dates
of delivery. Unit Holders will be "at risk" with respect to these Securities
(i.e. may derive either gain or loss from fluctuations in the offering side
evaluation of the securities) from the date they commit for Units. The Trusts
consist of the Securities (or contracts to purchase the Securities) listed in
each Portfolio as may continue to be held from time to time in each Trust and
any Additional Securities deposited in the Trusts in connection with the sale
of additional Units to the public as described above, together with the accrued
and undistributed interest thereon and undistributed cash realized from the
sale or redemption of Securities (see "Trust Administration" in Part B of this
Prospectus). Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any of the Securities. However, should any
deposited contract fail, the Sponsor shall, within 90 days from the initial
Date of Deposit, acquire replacement Securities and substitute them in the
portfolios of the Trust. If the failed Securities are not substituted or if the
purchase price of the substituted Securities does not exceed the cost of the
original contracts, the Sponsor shall make a pro rata distribution of the
amount, if any, by which the cost of the failed contract exceeded the cost of
the substituted security on the next scheduled distribution date.
On the Date of Deposit each Unit represented the fractional
undivided interest in each Trust set forth under "Essential Information" for
each Trust. Thereafter, if any Units are redeemed by the Trustee the face
amount of Securities in each Trust will be reduced by amounts allocable to
redeemed Units, and the fractional undivided interest represented by each Unit
in the balance will be increased. However, if additional Units are issued by
each Trust (through deposit of Securities by the Sponsor in connection with the
sale of additional Units), the aggregate value of Securities in each Trust will
be increased by amounts allocable to additional Units and the fractional
undivided interest represented by each Unit in the balance will be decreased.
Units will remain outstanding until redeemed upon tender
A-8
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<PAGE>
to the Trustee by any Unit Holder (which may include the Sponsor) or until
the termination of the Indenture.
The Sponsor has a limited right to substitute other Securities in the
Trust portfolio in the event of a failed contract. (See "The
Trusts--Substitution of Securities" in Part B.) Each Unit in each Trust
represents an undivided interest in the principal and net income of that Trust
in the ratio of one Unit for each $1.00 principal amount of Securities
initially deposited in that Trust. (See "The Trusts--Organization" in Part B.)
(For the specific number of Units in each Trust, see the "Summary of Essential
Information" for each Trust in this Part A). The Sponsor has not participated
as a sole underwriter or manager, co-manager or member of underwriting
syndicates from which any of the Securities were acquired for the Trusts.
Treasury Income Series 19. Treasury Income Series 19 consists of a
fixed portfolio of interest-bearing U.S. Treasury Obligations with laddered
maturities from January 31, 1998 to January 31, 1999. As Securities mature,
Treasury Income Series 19 will return to Unit Holders every 3 months beginning
in January 1998 approximately 20% of the face amount of the amount invested.
On the initial Date of Deposit 100% of the Securities in Treasury
Income Series 19 were purchased at a "market" discount from par value at
maturity. Based on the offering side evaluation on the initial Date of Deposit
100% of the aggregate principal amount of Securities in the portfolio were
acquired at a discount from par, 0% were at a premium over par and none were at
par. A Unit Holder may receive more or less than his original purchase price
upon disposition of his Units because the value of Units fluctuates with the
value of the underlying Securities, which vary inversely with interest rates.
On the initial Date of Deposit, the bid side evaluation was lower than the
offering side evaluation by .06% of the aggregate offering price of the
Treasury Income Series 19. (See "Public Offering" in Part B.)
All of the issues of Treasury Income Series 19 are represented by
the Sponsor's contracts to purchase, which are expected to be settled on or
about July 29, 1996 and none of the issues has been deposited in the Trust.
Treasury Income Series 20. Treasury Income Series 20 consists of a
fixed portfolio of interest-bearing U.S. Treasury Obligations with laddered
maturities from January 31, 1998 to June 30, 2001. As Securities mature,
Treasury Income Series 20 will return to Unit Holders every 12 months beginning
in January 1998 approximately 20% of the face amount of the amount invested.
On the initial Date of Deposit 60% of the Securities in Treasury
Income Series 20 were purchased at a "market discount from par value at
maturity. Based on the offering side evaluation on the initial Date of Deposit
60% of the aggregate principal amount of Securities in the portfolio were
acquired at a discount from par, 20% were at a premium over par and 20% were at
par. A Unit Holder may receive more or less than his original purchase price
upon disposition of his Units because the value of Units fluctuates with the
value of the underlying Securities, which vary inversely with interest rates.
On the initial Date of Deposit, the bid side evaluation was lower than the
offering side evaluation by .06% of the aggregate offering price of the
Treasury Income Series 20. (See "Public Offering" in Part B.)
All of the issues of Treasury Income Series 20 are represented by
the Sponsor's contracts to purchase, which are expected to be settled on or
about July 29, 1996 and none of the issues has been deposited in the Trust.
Asset Builder Series 21. Asset Builder Series 21 consists
principally of a fixed portfolio of stripped U.S. Treasury notes or bonds with
maturities of 1 year or more, which are referred to as Zero Coupon Bonds. Zero
Coupon Bonds provide for payment at maturity at par value, unless sooner sold
or redeemed, but do not provide for the payment of current interest. The market
value of Zero Coupon Bonds may be subject to greater fluctuations than coupon
bonds in response to changes in interest rates. See "The Trusts--Discount and
Zero Coupon Bonds" in Part B. The Securities in Asset Builder Series 21 have
consecutive maturities from August 15, 1997 to August 15, 2001 (referred to as
A-9
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"laddered maturities"). As Securities mature, Asset Builder Series 21 will
return to Unit Holders every 12 months beginning in August 1997 approximately
20% of the face amount of the amount invested.
On the initial Date of Deposit 100% of the Securities in Asset
Builder Series 21 were purchased at a "market" discount from par value at
maturity. Based on the offering side evaluation on the initial Date of Deposit
100% of the aggregate principal amount of Securities in the portfolio were
acquired at a discount from par, none were at a premium over par and none were
at par. A Unit Holder may receive more or less than his original purchase price
upon disposition of his Units because the value of Units fluctuates with the
value of the underlying Securities, which vary inversely with interest rates.
On the initial Date of Deposit, the bid side evaluation was lower than the
offering side evaluation by .06% of the aggregate offering price of the Asset
Builder Series 21. (See "Public Offering" in Part B.)
All of the issues of Asset Builder Series 21 are represented by the
Sponsor's contracts to purchase, which are expected to be settled on or about
July 29, 1996 and none of the issues has been deposited in the Trust.
A-10
387312.1
<PAGE>
RISK FACTORS
An investment in Units of the Trusts should be made with an
understanding of the risks which an investment in fixed rate debt obligations
may entail, including the risk that the value of the portfolio of each Trust
and hence of the Units of each Trust will decline with increases in interest
rates. The value of the underlying Securities will fluctuate inversely with
changes in interest rates. The high inflation of prior years, together with the
fiscal measures adopted to attempt to deal with it, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate long term
debt obligations generally. The Sponsor cannot predict whether such
fluctuations will continue in the future.
In selecting Securities for deposit in the Trusts, the following
factors, among others, were considered by the Sponsor: (i) the prices of the
Securities relative to other comparable Securities; (ii) the maturities of
these Securities; and (iii) whether the Securities were issued after July 18,
1984.
Investment in Asset Builder Series 21 should be made with the
understanding that the value of Zero Coupon Bonds is subject to greater
fluctuation in response to changes in interest rates. In addition, the accrued
market discount of such Securities is not taxable to certain categories of Unit
Holders of such Trust until the Securities in such Trust are disposed of or
mature.
PUBLIC OFFERING PRICE
The Public Offering Price of each Unit of the Trusts is equal to the
aggregate offering price of the Securities in each Trust divided by the number
of Units of each Trust outstanding, plus a sales charge of (a) 1.70% of the
Public Offering Price or 1.729% of the net amount invested in Securities per
Unit of Treasury Income Series 19, (b) 1.80% of the Public Offering Price or
1.833% of the net amount invested in Securities per Unit of Treasury Income
Series 20, and (c) 1.80% of the Public Offering Price or 1.833% of the net
amount invested in Securities per Unit of Asset Builder Series 21. In addition,
for Units ordered after the date hereof, accrued interest will be payable from
the First Settlement Date for Units of the Trust (three business days from the
date hereof) to the expected date of settlement (three business days after
order). For additional information regarding the Public Offering Price, the
descriptions of interest and principal distributions, repurchase and redemption
of Units and other essential information regarding the Trusts, see the "Summary
of Essential Information" for each Trust in this Part A. During the initial
offering period orders involving the lesser of at least 250,000 Units or
$250,000 for Treasury Income Series 19, 250,000 Units or $250,000 for Treasury
Income Series 20, 250,000 Units or $250,000 for Asset Builder Series 21 will be
entitled to a volume discount from the Public Offering Price. In addition, to
the extent Units of each QUILT trust are currently available from the Sponsor,
Unit Holders may elect to rollover principal distributions paid to them as
Securities in their respective Trust mature into additional units of such
available QUILTS trusts (upon receipt by the Trusts of an appropriate exemptive
order from the Securities and Exchange Commission) at a reduced sales charge.
(See "Public Offering--Volume and Other Discounts" in Part B.) The Public
Offering Price per Unit may vary on a daily basis in accordance with
fluctuations in the aggregate offering price of the Securities. (See "Public
Offering--Offering Price" in Part B.)
A-11
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DISTRIBUTIONS
Distributions of interest income, less expenses, will be made by
Treasury Income Series 19 on a quarterly basis, and Treasury Income Series 20
on a monthly basis. The first interest distributions will be made on the First
Payment Date to all Unit Holders of record on the First Record Date of the
Trust and thereafter distributions will be made on a quarterly basis for
Treasury Income Series 19 and on a monthly basis for Treasury Income Series 20.
Distributions of principal, if any, will be made annually for Asset Builder
Series 21 beginning in 1997. (See "Rights of Unit Holders--Interest and
Principal Distributions" in Part B.) For estimated quarterly and monthly
interest distributions, the amount of the first interest distributions and the
specific dates representing the First Payment Date and the First Record Date
see "Summary of Essential Information" for each Trust in Part A.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
Units of the Trusts are offered to investors on a "dollar price"
basis (using the computation method previously described under "Public Offering
Price") as distinguished from a "yield price" basis often used in offerings of
tax exempt bonds (involving the lesser of the yield as computed to maturity of
bonds or to an earlier redemption date). Since they are offered on a dollar
price basis, the rate of return on an investment in Units of Treasury Income
Series 19 and Treasury Income Series 20 are measured in terms of "Estimated
Current Return" and "Estimated Long Term Return." The rate of return for Asset
Builder Series 21 is only measured in terms of "Estimated Long Term Return."
This calculation of performance is mandated by the rules of the Securities and
Exchange Commission.
Estimated Long Term Return is calculated by: (1) computing the yield
to maturity or to an earlier call date (whichever results in a lower yield) for
each Security in each Trust portfolio in accordance with accepted practices,
which practices take into account not only the interest payable on the
Securities but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Securities in each Trust
portfolio by weighing each Security's yield by the market value of the Security
and by the amount of time remaining to the date to which the Security is priced
(thus creating an average yield for the portfolio of each Trust); and (3)
reducing the average yield for the portfolio of each Trust in order to reflect
estimated fees and expenses of each Trust and the maximum sales charge paid by
Unit Holders. The resulting Estimated Long Term Return represents a measure of
the return to Unit Holders earned over the estimated life of each Trust. The
Estimated Long Term Return as of the day prior to the initial Date of Deposit
is stated for the Trusts under "Summary of Essential Information" for each
Trust in Part A.
Estimated Current Return is computed by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return does
not take into account the amortization of premium or accretion of discount, if
any, on the Securities in the portfolio of each Trust. Moreover, because
interest rates on Securities purchased at a premium are generally higher than
current interest rates on newly issued bonds of a similar type with comparable
rating, the Estimated Current Return per Unit may be affected adversely if such
Securities are redeemed prior to their maturity. On the initial Date of
Deposit, the Estimated Net Annual Interest Income per Unit divided by the
Public Offering Price resulted in the Estimated Current Return stated for each
applicable Trust under "Summary of Essential Information" for each Trust in
Part A.
The Estimated Net Annual Interest Income per Unit of each Trust will
vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Securities in the Trusts. The Public Offering Price will
vary with changes in the offering prices (bid prices in the case of the
secondary market) of the Securities. Therefore, there is no assurance that the
present Estimated Current Return or Estimated Long Term Return will be realized
in the future.
A-12
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MARKET FOR UNITS
The Sponsor, although not obligated to do so, currently intends to
maintain a secondary market for the Units of the Trusts after the initial
public offering has been completed. The secondary market repurchase price will
be based on the aggregate bid price of the Securities in a Trust portfolio; and
the reoffer price will be based on the aggregate offering price of the
Securities plus a sales charge of (a) 1.70% (1.729% of the net amount invested)
plus net accrued interest for Treasury Income Series 19, (b) 1.80% (1.833% of
the net amount invested) plus net accrued interest for Treasury Income Series
20, and (c) 1.80% (1.833% of the net amount invested) plus net accrued interest
for Asset Builder Series 21. If a market is not maintained a Unit Holder will
be able to redeem his Units with the Trustee at a price based on the aggregate
bid price of the Unit. (See "Liquidity--Sponsor Repurchase" in Part B.)
A-13
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<PAGE>
INDEPENDENT AUDITORS' REPORT
The Sponsor, Trustee, and Unit Holders of
Qualified Unit Investment Liquid Trust Series ("QUILTS")
QUILTS Income--U.S. Treasury Series 19
QUILTS Income--U.S. Treasury Series 20
QUILTS Asset Builder--U.S. Treasury Series 21
We have audited the accompanying Statements of Condition and
Portfolios of Qualified Unit Investment Liquid Trust Series ("QUILTS"), QUILTS
Income--U.S. Treasury Series 19 ("Treasury Income Series 19"), QUILTS
Income--U.S. Treasury Series 20 ("Treasury Income Series 20") and QUILTS Asset
Builder--U.S. Treasury Series 21 ("Asset Builder Series 21") as of July 23,
1996. These statements are the responsibility of the Sponsor. Our
responsibility is to express an opinion on the Statements of Condition and
Portfolios 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 Statements of Condition and
Portfolios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the Statement of
Condition and Portfolios. 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 that our
audit provides a reasonable basis for our opinion. The irrevocable letters of
credit deposited in connection with the securities owned as of July 23, 1996,
pursuant to contracts to purchase, as shown in the Statements of Condition and
Portfolios, was confirmed to us by The Chase Manhattan Bank, the Trustee.
In our opinion, the accompanying Statements of Condition and
Portfolios present fairly, in all material respects, the financial position of
Treasury Income Series 19, Treasury Income Series 20 and Asset Builder Series
21 as of July 23, 1996 in conformity with generally accepted accounting
principles.
BDO SEIDMAN, LLP
New York, New York
July 23, 1996
A-14
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<PAGE>
QUILTS
STATEMENTS OF CONDITION
AS OF DATE OF DEPOSIT, JULY 23, 1996
TRUST PROPERTY
Treasury Treasury Asset
<TABLE>
<CAPTION>
Income Income Builder
Series 19 Series 20 Series 21
------------------ ------------------ --------------
<S> <C> <C> <C>
Investment in Securities:
Sponsor's Contracts to Purchase Underlying Securities
Backed by Irrevocable Letters of Credit(1).................. $245,242 $247,008 $207,637
Accrued Interest to Date of Deposit on Securities(1)......... 5,040 2,975 104
Organizational Costs(2)...................................... 13,333 13,333 13,333
------ ------ ------
Total........................................................ $263,615 $263,316 $221,074
======== ======== ========
LIABILITY AND INTEREST OF UNIT HOLDERS
Liability for Accrued Interest on Securities(1)(5)........... $ 5,040 $ 2,975 $ 104
Accrued Liability(2) 13,333 13,333 13,333
------ ------ ------
18,373 16,308 13,437
Interest of Unit Holders
Units of Fractional Undivided Interest Outstanding:
Cost to Unit Holders(3)........................... 249,482 251,535 211,442
Less Gross Underwriting Commissions(4)............ 4,240 4,527 3,805
------------------ ------------------ -------------------
Net Amount Applicable to Unit Holders........................ 245,242 247,008 207,637
------------------ ------------------ -------------------
Total $263,615 $263,316 $221,074
======== ======== ===================
</TABLE>
(1) Aggregate cost to the Trusts of the Securities listed in the
portfolio of each Trust is based on offering prices determined by
the Evaluator on the basis set forth under "Public
Offering--Offering Price" as of 12:00 Noon on July 23, 1996. An
irrevocable letter of credit issued by Credit Lyonnais in an amount
of $2,000,000 has been deposited with the Trustee to cover the
purchase of $750,000 principal amount of Securities pursuant to
contracts to purchase such Securities and $8,516 accrued interest on
such Securities to the expected dates of settlement.
(2) Organizational costs incurred by the Trusts have been deferred and
will be amortized over the life of each of the Trusts or five years,
whichever is shorter. The Trust will reimburse the Sponsor for
actual organizational costs incurred up to a maximum of $.20 per
1,000 Units per annum. To the extent the Trust is larger or smaller,
the actual dollar amount reimbursed may vary.
(3) Aggregate public offering price (exclusive of interest) is computed
on 250,000, 250,000, and 250,000 Units for Treasury Income Series
19, Treasury Income Series 20, and Asset Builder Series 21,
respectively, on the basis set forth under "Public
Offering--Offering Price" in Part B.
(4) Sales charge of 1.70% computed on 250,000 Units of Treasury Income
Series 19, 1.80% computed on 250,000 Units of Treasury Income Series
20, and 1.80% computed on 250,000 Units of Asset Builder Series 21
on the basis set forth under "Public Offering Price" in Part B.
(5) On the basis set forth under "Public Offering--Accrued Interest" in
Part B, the Trustee will advance the amount of accrued interest as
of July 29, 1996 (the "First Settlement Date"), and all accrued
interest to the First Settlement Date will be distributed to the
Sponsor as the Unit Holder of record as of the First Settlement
Date. Consequently, the amount of accrued interest to be added to
the public offering price of Units will include only accrued
interest from the First Settlement Date to date of settlement, less
any distributions from the Interest Account subsequent to the First
Settlement Date.
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QUILTS
Treasury Income Series 19
AS OF DATE OF DEPOSIT, JULY 23, 1996
<TABLE>
<CAPTION>
Aggregate Coupon/ Cost of
Portfolio Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Dates to Trust (2)
--- ------ ------------------ ----- ------------
<S> <C> <C> <C> <C>
1 50,000 U.S. Treasury Note 5.625% $ 49,633
1/31/98
2 50,000 U.S. Treasury Note 5.875% 49,727
4/30/98
3 50,000 U.S. Treasury Note 5.250% 49,070
7/31/98
4 50,000 U.S. Treasury Note 4.750% 48,375
10/31/98
5 50,000 U.S. Treasury Note 5.000% 48,437
1/31/99
-------- ---------
$250,000 $245,242
========= ========
</TABLE>
ESTIMATED CASH FLOWS TO UNIT HOLDERS
The Table below sets forth the per 1,000 Units estimated
distributions of interest and principal to Unit Holders. The table assumes no
changes in Trust expenses, no redemptions or sales of the underlying U.S.
Treasury Obligations prior to maturity and the receipt of all principal due
upon maturity. To the extent the foregoing assumptions change actual
distributions will vary.
<TABLE>
<CAPTION>
Estimated Interest Estimated Principal Estimated Total
Quilts Treasury Income Series 19 Distribution Distribution Distribution
- -------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
October 1996 10.91 - 10.91
January 1997 12.92 - 12.92
April 1997 12.92 - 12.92
July 1997 12.92 - 12.92
October 1997 12.92 - 12.92
January 1998 12.92 200.00 212.92
April 1998 10.15 200.00 210.15
July 1998 7.25 200.00 207.25
October 1998 4.67 200.00 204.67
January 1999 2.33 200.00 202.33
</TABLE>
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QUILTS
Treasury Income Series 20
AS OF DATE OF DEPOSIT, JULY 23, 1996
<TABLE>
<CAPTION>
Coupon/ Cost of
Portfolio Aggregate Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
--- ------ ------------------ ------- ------------
<S> <C> <C> <C> <C>
1 $ 50,000 U.S. Treasury Note 5.625% $ 49,633
1/31/98
2 50,000 U.S. Treasury Note 6.375% 50,039
1/15/99
3 50,000 U.S. Treasury Note 6.375% 49,805
1/15/00
4 50,000 U.S. Treasury Note 5.250% 47,531
1/31/01
5 50,000 U.S. Treasury Note 6.625% 50,000
_________ 6/30/01 _________
$250,000 $247,008
======== ========
</TABLE>
ESTIMATED CASH FLOWS TO UNIT HOLDERS
The Table below sets forth the per 1,000 Units estimated
distributions of interest and principal to Unit Holders. The table assumes no
changes in Trust expenses, no redemptions or sales of the underlying U.S.
Treasury Obligations prior to maturity and the receipt of all principal due
upon maturity. To the extent the foregoing assumptions change actual
distributions will vary.
<TABLE>
<CAPTION>
Estimated Interest Estimated Principal Estimated Total
Quilts Treasury Income Series 20 Distribution Distribution Distribution
- -------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
August 1996 2.62 - 2.62
September 1996 - December 1997 4.91 - 4.91
January 1998 4.91 200.00 204.91
February 1998 - December 1998 3.99 - 3.99
January 1999 3.99 200.00 203.99
February 1999 - December 1999 2.95 - 2.95
January 2000 2.95 200.00 202.95
February 2000 - December 2000 1.90 - 1.90
January 2001 1.90 200.00 201.90
February 2001 - May 2001 1.04 - 1.04
June 2001 1.04 200.00 201.04
</TABLE>
A-17
387312.1
<PAGE>
QUILTS
Asset Builder Series 21
AS OF DATE OF DEPOSIT, JULY 23, 1996
<TABLE>
<CAPTION>
Coupon/ Cost of
Portfolio Aggregate Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
--- ------ ------------------ ------- ------------
<S> <C> <C> <C> <C>
1 $ 50,000 U.S. Treasury Strip 0.000% $ 47,039
8/15/97
2 50,000 U.S. Treasury Strip 0.000% 44,010
8/15/98
3 50,000 U.S. Treasury Strip 0.000% 41,123
8/15/99
4 50,000 U.S. Treasury Strip 0.000% 38,502
8/15/00
5 47,000 U.S. Treasury Strip 0.000% 33,804
8/15/01
6 3,000 U.S. Treasury Note 7.875% 3,159
________ 8/15/01 _______
$250,000 $ 207,637
======== =========
</TABLE>
A-18
387312.1
<PAGE>
FOOTNOTES TO PORTFOLIOS
(1) Contracts to purchase the Securities were entered into on July 23,
1996 for Treasury Income Series 19, Treasury Income Series 20 and
Asset Builder Series 21. All contracts are expected to be settled on
or about the First Settlement Date of each Trust which is expected
to be July 29, 1996, for Treasury Income Series 19, Treasury Income
Series 20 and Asset Builder
Series 21.
(2) Evaluation of Securities by the Evaluator was made on the basis of
current offering prices for the Securities. The offering prices are
greater than the current bid prices of the Securities which are the
basis on which Unit Value is determined for purposes of redemption
of Units. (See "Public Offering--Comparison of Public Offering
Price, Sponsor's Repurchase Price and Redemption Price" in Part B.)
<TABLE>
<CAPTION>
The aggregate value of Securities in the Trust, Additional information regarding the
based on the bid prices on the Date of Deposit, Trust is as follows:
are as follows:
Value of Securities Based Upon
Bid Side Evaluation Sponsor's Purchase Price
<S> <C> <C>
Treasury Income Series 19 $245,086 $245,289
Treasury Income Series 20 $246,867 $247,122
Asset Builder Series 21 $207,520 $207,866
Cost of Securities Based Upon Sponsor's Profit
Offering Side Evaluation (Date of Deposit)
Treasury Income Series 19 $245,242 $ (47)
Treasury Income Series 20 $247,008 $(114)
Asset Builder Series 21 $207,637 $(229)
Difference in Dollars Annual Interest Income
Treasury Income Series 19 $156 $13,250
Treasury Income Series 20 $141 $15,125
Asset Builder Series 21 $117 $ 236
% Difference Between Bid Side Evaluation
and Offering Side Evaluation
Treasury Income Series 19 .06%
Treasury Income Series 20 .06%
Asset Builder Series 21 .06%
</TABLE>
UNDERWRITING
OCC Distributors, Two World Financial Center, 225 Liberty Street,
New York, NY 10281-1698 will act as Underwriter for all of the Units of the
Trusts. The Underwriter will distribute the Units through various
broker-dealers, banks and/or other eligible participants (see "Public
Offering-Distribution of Units" in Part B).
A-19
387312.1
<PAGE>
PROSPECTUS PART B
Part B of this Prospectus may not be Distributed unless Accompanied by Part A
QUALIFIED UNIT INVESTMENT LIQUID TRUST SERIES ("QUILTS")
QUILTS Income--U.S. Treasury Series 19 ("Treasury Income Series 19")
QUILTS Income--U.S. Treasury Series 20 ("Treasury Income Series 20")
QUILTS Asset Builder--U.S. Treasury Series 21 ("Asset Builder Series 21")
THE TRUST
Organization. "QUILTS" is comprised of three separate "unit investment
trusts" designated as set forth above in Part A. The Trusts were created under
the laws of the State of New York pursuant to a Trust Indenture and Agreement
(the "Trust Agreement"), dated the Date of Deposit, between OCC Distributors,
as Sponsor, and The Chase Manhattan Bank, as Trustee. The Trustee acts as the
Evaluator for the Trusts.
On the Date of Deposit the Sponsor deposited with the Trustee the
underlying securities and contracts and funds represented by the irrevocable
letter(s) of credit issued by major commercial bank(s) for the purchase of such
securities (the "Securities"). See "Portfolio" for each Trust in Part A of this
Prospectus. The Trusts are created simultaneously with the execution of the
Trust Agreement and the deposit of the Securities with the Trustee. The Trustee
then immediately delivered to the Sponsor certificates of beneficial interest
(the "Certificates") representing the units (the "Units") comprising the entire
ownership of the Trusts. Through this Prospectus, the Sponsor is offering the
Units, including Additional Units, as defined below, for sale to the public.
The holders of Units (the "Unit Holders") will have the right to have their
Units redeemed at a price based on the aggregate bid side evaluation of the
Securities (the "Redemption Price") if they cannot be sold in the secondary
market which the Sponsor, although not obligated to, proposes to maintain. In
addition, the Sponsor may offer for sale through this Prospectus Units which
the Sponsor may have repurchased in the secondary market or upon the tender of
such Units for redemption.
With the deposit of the Treasury Securities in the Trusts on the
initial Date of Deposit, the Sponsor established a proportionate relationship
among the principal amounts of interest bearing and non-interest bearing U.S.
Treasury Obligations of specified ranges of maturities on the portfolios of
each Trust. During the 90-day period following the Date of Deposit, the Sponsor
is permitted under the Trust Agreement to deposit additional Securities (the
"Additional Securities") and any cash in the Trusts not held for distribution
to Unit Holders prior to the deposit, resulting in a corresponding increase in
the number of Units outstanding (the "Additional Units"). Such Additional Units
may be continuously offered for sale to the public by means of this Prospectus.
The Sponsor anticipates that any Additional Securities deposited in the Trusts
during the 90-day period subsequent to the Date of Deposit will maintain, as
far as practicable, the original proportionate relationship among the principal
amounts of U.S. Treasury Obligations in the portfolios established on the Date
of Deposit. Precise duplication of this original proportionate relationship may
not be possible because fractions of U.S. Treasury Obligations may not be
purchased or for other reasons, but duplication will continue to be the goal in
connection with any such deposit of Additional Securities. (These original
proportionate relationships on the Date of Deposit are set forth in "Summary of
Essential Information," for each Trust in Part A.) Deposits of Additional
Securities in the portfolios of each Trust subsequent to the 90-day period
following the Date of Deposit must replicate exactly the proportionate
relationship among the principal amounts of Securities comprising the
portfolios of each Trust at the time of replication.
A "Unit" represents an undivided interest or pro rata share in the
principal and interest of each Trust in the ratio of one Unit for each $1.00
principal amount of Securities initially deposited in each Trust. Because
regular payments of principal are to be received and certain of the Securities
will mature in accordance with their terms or may be sold under certain
circumstances described herein and
387339.1
<PAGE>
because Additional Securities may be deposited into the Trusts from time to
time, the Trusts are not expected to retain their present size and composition.
To the extent that any Units are redeemed by the Trustee, the fractional
undivided interest or pro rata share in such Trust represented by each
unredeemed Unit will increase, although the actual interest in such Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unit Holders, which
may include the Sponsor, or until the termination of the Trust Agreement.
Objectives. The Trusts offer investors the opportunity to participate
in a portfolio of U. S. Treasury Obligations with a greater diversification
than they might be able to acquire themselves. The objective of the Trusts is
to provide safety of principal. Treasury Income Series 19 seeks to provide
current quarterly distributions of income and Treasury Income Series 20 seeks
to provide current monthly distributions of income. With respect to Asset
Builder Series 21, the Trust seeks to accumulate principal value in the Units
over the life of the Trust. The Trusts seek to provide investment flexibility
by allowing investors to choose among three portfolios of Securities that have
differing maturities and quality. Investors should be aware that there is no
assurance the Trusts' objectives will be achieved. Even though the portfolios
of Treasury Income Series 19 and Treasury Income Series 20 consist primarily of
U.S. Treasury Obligations, each of which pay interest no more often than
semi-annually, Treasury Income Series 19 will pay interest quarterly, and
Treasury Income Trust 20 will pay interest monthly through advances made by the
Trustee, which will then be reimbursed when interest is received. (See
"Interest and Principal Distributions" in this Part B.)
Since disposition of Units prior to final liquidation of the Trust may
result in an investor receiving less than the amount paid for such Units
(see"Public Offering--Comparison of Public Offering Price, Sponsor's Repurchase
Price and Redemption Price" in this Part B), the purchase of a Unit should be
looked upon as a long-term investment. The Trust is not designed to be a
complete investment program.
Portfolios. General. The Trusts consist of the Securities (or
contracts to purchase such Securities together with an irrevocable letter or
letters of credit for the purchase of such contracts) listed under "Portfolio"
for each Trust in Part A of this Prospectus, as long as such Securities may
continue to be held from time to time in the Trusts (including certain
securities deposited in the Trusts in exchange or substitution for any
Securities pursuant to the Trust Agreement) together with accrued and
undistributed interest thereon and undistributed and uninvested cash realized
from the disposition of Securities. Because certain of the Securities from time
to time may be redeemed or will mature in accordance with their terms or may be
sold under certain circumstances described herein, a Trust is not expected to
retain for any length of time its present size and composition.
The Sponsor although not obligated to do so, intends to maintain a
secondary market for the Units on the bid side of the market for the Units.
(See "Liquidity--Sponsor Repurchase", herein.) Unit Holders of the Trusts, in
the absence of a secondary market for Units will have the right to have one or
more of their Units redeemed with the Trustee at a price equal to the
Redemption Price thereof (see"Liquidity--Sponsor Repurchase" in this Part B)
based on the then aggregate bid price for the Securities in the portfolios of
each Trust. Due to fluctuations in the market price of the Securities in the
portfolios and the fact that the initial Public Offering Price is based on the
offering side of the market and includes a sales charge among other factors,
the amount realized by a Unit Holder upon the redemption or sale of Units may
be less than the price paid for such units by the Unit Holder.
The portfolio of each Trust consists of Securities issued by the
United States of America ("U.S. Treasury Obligations"), which are direct
obligations of the United States and therefore are backed by the full faith and
credit of the United States Government. The U.S. Treasury Obligations are
different issues of bonds, bills, notes, debentures and other debt obligations
with fixed final maturity dates. None of the U.S. Treasury Obligations have any
equity or conversion features. All of the U.S. Treasury Obligations in Treasury
Income Series 19 and Treasury Income Series 20 are current interest-bearing
obligations of the United States of America, or in the case of U.S. Treasury
Obligations not delivered on the initial Date of Deposit contracts to purchase
such obligations assigned to the Trustee. Most of
2
387339.1
<PAGE>
the U.S. Treasury Obligations in Asset Builder Series 21 consist of stripped
U.S. Treasury notes and bonds with maturities of 1 year or more (hereinafter
referred to as "Zero Coupon Bonds"). The balance of the portfolio of this Trust
consists of interest-bearing obligations used to pay expenses of the Trust. Any
excess amounts after expenses are paid will be paid to Unit Holders in cash. A
Zero Coupon Bond makes no present interest payments. Rather, it makes one
payment on its face amount at maturity.
U. S. Treasury Obligations represent 100% of the aggregate market
value of the portfolios of each Trust. These U.S. Treasury Obligations are sold
by the United States Department of Treasury (the "Treasury") to finance
shortfalls between the Treasury's income and expenditures. Such gaps may have
been planned and accounted for in the budget, or they may arise from unexpected
changes in economic, political, fiscal and other circumstances. U.S. Treasury
Obligations constitute public debt of the United States and are, therefore,
direct obligations of the United States.
When selecting U.S. Treasury Obligations for the Trusts, the following
factors, among others, were considered by the Sponsor: (i) the prices and
yields of such U.S. Treasury Obligations relative to other comparable
securities; (ii) the maturities of such U.S. Treasury Obligations; and (iii)
whether the U.S. Treasury Obligations were issued after July 18, 1984.
The yields on U.S. Treasury Obligations of the type deposited in the
Trusts are dependent on a variety of factors, including general money market
conditions, fluctuations in prevailing interest rates, general conditions of
the government securities markets, size of a particular offering and the
maturity of the obligations.
RISK FACTORS
Risk Factors. An investment in Units of the Trusts should be made with
an understanding of the risks which an investment in fixed rate debt
obligations may entail, including the risk that the value of the portfolios of
each Trust, and hence of the Units, will decline with increases in prevailing
interest rates. The value of the underlying Securities will fluctuate inversely
with changes in prevailing interest rates. In recent years, the national
economy has experienced significant variations in rates of inflation and
economic growth, substantial increases in the national debt, substantial
increase in reliance upon foreign investors to finance the national debt, and
material reformulation of federal tax, monetary and regulatory policies. These
conditions have been associated with wide fluctuations in prevailing interest
rates and thus in the value of fixed rate debt obligations. The Sponsor cannot
predict whether such fluctuations will continue in the future.
The Securities in the portfolios of each Trust were chosen in part on
the basis of their respective stated maturity dates. The ranges of maturity
dates of each of the Securities contained in the portfolios of each Trust are
shown on the "Portfolio" for each Trust in Part A of this Prospectus.
The Trusts may be appropriate for investors who desire to invest in a
portfolio of taxable fixed income federal securities offering the safety of
principal provided by an investment in U.S. Treasury Obligations backed by the
full faith and credit of the United States Government. The Trusts generally
pass though to Unit Holders the exemptions from state and local personal income
taxes afforded to direct owners of U.S. Obligations. The Trusts are appropriate
for qualified retirement plans. (See "Retirement Plans" in this Part B.) These
Trusts may also be particularly appropriate for foreign investors as the income
from the Trusts, provided certain conditions are met, will be exempt from
withholding for U.S. Federal income tax purposes. (See "Tax Status".)
Certain of the Securities in the Trusts may have been acquired at a
market premium. Securities trade at a premium because the prevailing interest
rates on the Securities are higher than interest on comparable debt securities
being issued at currently prevailing interest rates. The current returns of
securities trading at a market premium are higher than the current returns of
comparably rated debt securities of a similar type issued at currently
prevailing interest rates because premium securities tend to decrease in market
value as they approach maturity, when the face amount becomes payable. Because
part of the purchase price is thus returned not at maturity but through current
income payments, an early redemption at par of a security purchased at a
premium or a maturity at par of a security purchased at a premium will result
in a reduction in yield and a loss of principal to the Unit
3
387339.1
<PAGE>
Holders. If currently prevailing interest rates for newly issued and otherwise
comparable securities increase, the market premium of previously issued
securities will decline and if currently prevailing interest rates for newly
issued comparable securities decline, the market premium of previously issued
securities will increase, all other things being equal. Furthermore, the value
of the Units will fluctuate with fluctuations in the value of the underlying
Securities in the portfolios of each Trust. Therefore, Unit Holders who sell
their Units prior to termination may receive more or less than their original
purchase price upon sale. Market premium attributable to interest rate changes
does not indicate market confidence in the issue.
Substitution of Securities. Neither the Sponsor nor the Trustee shall
be liable in any way for any default, failure or defect in any of the
Securities. In the event of a failure to deliver any Security that has been
purchased for the Trusts under a contract, including those Securities purchased
on a "when, as, and if" issued basis ("Failed Securities"), the Sponsor is
authorized under the Trust Agreement to direct the Trustee to acquire other
securities ("Replacement Securities") and to substitute them in the portfolios
of the Trusts within 90 days of the initial Date of Deposit.
Replacement Securities must be deposited with the Trustee within 20
days after delivery of notice of a Failed Security (but in no event later than
the 90th day following the initial Date of Deposit) and the purchase price
thereof (exclusive of accrued interest) may not exceed the amount of funds
reserved by the Trustee pursuant to a letter of credit supplied by the Sponsor
for the purchase of the failed Security. The Replacement Securities must (i) be
U.S. Treasury Obligations, (ii) have a fixed maturity approximately the same as
the fixed maturity of the Security replaced, and (iii) be purchased at a price
that results in a yield to maturity and in a current return, in each case as of
the date on which such Replacement are deposited with the Trustee, which is
equivalent (taking into consideration then current market conditions and the
relative creditworthiness of the underlying obligation) to the yield to
maturity and current return of the related Failed Security. Whenever a
Replacement Security has been acquired for a Trust, the Trustee shall, within
five days thereafter, notify all Unit Holders of the acquisition of the
Replacement Security and shall, no later than the next Quarterly or Monthly
Payment Date, make a pro rata distribution of the amount, if any, by which the
cost to the Trust of the Failed Security exceeded the cost of the Replacement
Security.
If the right of limited substitution described in the preceding
paragraph shall not be utilized to acquire Replacement Securities in the event
of a failed contract, the Sponsor will refund to each Unit Holder the portion
of the sales charge and the pro rata portion of the cost of such Failed
Securities, and distribute the principal and accrued interest attributable to
such Failed Securities on the next Quarterly or Monthly Payment Date. In all
cases, accrued interest attributable to Failed Securities will be paid to Unit
Holders until such time as Replacement Securities are acquired. All such
interest paid to a Unit Holder which accrued after the expected date of
settlement for purchase of his Units will be paid by the Sponsor.
Because certain of the Securities from time to time may be redeemed or
will mature in accordance with their terms or may be sold under certain
circumstances, no assurance can be given that the Trusts will retain their
present size and composition for any length of time. The proceeds from the sale
of a Security or the exercise of any redemption or call provision will be
distributed to Unit
Holders except to the extent such proceeds are applied to meet redemptions of
Units. (See "Liquidity--Trustee Redemption" in this Part B.)
Discount and Zero Coupon Bonds. Most of the aggregate principal amount
of the Securities in Asset Builder Series 21 are stripped U.S. Treasury notes
or bonds with maturities of 1 year or more, which are referred to as Zero
Coupon Bonds. The balance of the portfolio of this Trust consists of
interest-bearing obligations used to pay expenses of the Trust. Any excess
amounts remaining after expenses are paid will be paid to Unit Holders in cash.
Zero Coupon Bonds do not provide for the payment of any current interest and
provide for payment at maturity at face value unless sooner sold or redeemed.
The market value of Zero Coupon Bonds is subject to greater fluctuation in
response to changes in prevailing interest rates. Zero Coupon Bonds generally
are subject to redemption at
4
387339.1
<PAGE>
compound accreted value based on par value at maturity. Because the issuer is
not obligated to make current interest payments, Zero Coupon Bonds may be less
likely to be redeemed than coupon bonds issued at a similar prevailing interest
rates. In the case of certain categories of Unit Holders, the accrued market
discount from Zero Coupon Bonds is not taxable until such Securities are
disposed of or have matured. The accrued portion of such discount will
generally be treated as taxable interest income for regular federal income tax
purposes. Upon sale or redemption, any gain realized that is in excess of the
earned portion of acquisition discount will be taxable as long-term capital
gain if the Zero Coupon Bonds have been held for more than one year. (See "Tax
Status" in this Part B.) The current value of a Zero Coupon Bond reflects the
present value of its face amount at maturity. (See"Portfolio Summary" in Part
A.)
Some of the aggregate principal amount of Securities in the Trusts may
have been purchased at a "market" discount from par value at maturity. The
coupon interest rates on the discount bonds at the time they were purchased and
deposited in the Trusts were lower than the current market interest rates for
newly issued bonds of comparable rating and type. At the time of issuance the
discount bonds were for the most part issued at then current coupon interest
rates. The current yields (coupon interest income as a percentage of market
price) of discount bonds will be lower than the current yields of comparably
rated bonds of similar type newly issued at current interest rates because
discount bonds tend to increase in market value as they approach maturity and
the full principal amount becomes payable. A market discount bond held to
maturity will have a larger portion of its total return in the form of capital
gain and less in the form of interest income than a comparable bond newly
issued at current yield and a lower current market value than otherwise
comparable bonds with a shorter term of maturity. If prevailing interest rates
rise, the value of discount bonds will decrease; and if prevailing interest
rates decline, the value of discount bonds will increase. The discount does not
necessarily indicate a lack of market confidence in the issuer.
PUBLIC OFFERING
Offering Price. The Public Offering Price per Unit of each Trust is
computed by adding to the aggregate offering price of the Securities in each
Trust divided by the number of Units outstanding for that Trust, an amount
equal to (a) 1.70% of the aggregate offering price of the Securities per Unit
which is equal to 1.729% of the Public Offering Price for Treasury Income
Series 19, (b) 1.80% of the aggregate offering price of the Securities per Unit
which is equal to 1.833% of the Public Offering Price for Treasury Income
Series 20 and (c) 1.80% of the aggregate offering price of the Securities per
Unit which is equal to 1.833% of the Public Offering Price for Asset Builder
Series 21. A proportionate share of accrued interest on the Securities from the
First Settlement Date to the expected date of settlement for the Units is added
to the Public Offering Price. Accrued interest is the accumulated and unpaid
interest on a Security from the last day on which interest was paid and is
accounted for daily by the applicable Trusts at the initial daily rate set
forth under "Summary of Essential Information" for each Trust in Part A. The
Public Offering Price for each Trust can vary on a daily basis from the amount
stated in this Prospectus in accordance with fluctuations in the prices of the
Securities and the price to be paid by each investor will be computed as of the
date the Units are purchased.
The aggregate offering side evaluation of the Securities is determined
by the Evaluator for such Trust (a) on the basis of current offering prices of
the Securities, (b) if an offering price is not available for any particular
Security, on the basis of current offering prices for comparable securities,
(c) by determining the value of the Securities on the offer side of the market
by appraisal, or (d) by any combination of the above. This evaluation is made
on the initial Date of Deposit as of 12:00 Noon New York Time and as of 4:00
P.M. each business day thereafter during the initial public offering, effective
for all orders received during the preceding 24-hour period. With respect to
the initial evaluation of the offering prices of certain Securities which at
the initial Date of Deposit were subject to syndicate offering period pricing
restrictions, it is the practice of the Evaluator to determine such evaluation
on the basis of the syndicate offering price, unless other factors cause the
Evaluator to conclude that such syndicate offering price does not then
accurately reflect the free market value of such Securities, in
5
387339.1
<PAGE>
which case the Evaluator will also take into account the other criteria
described above for the purpose of making its determination.
The Evaluator may obtain current bid or offering prices for the
Securities from investment dealers or brokers (including the Sponsor) that
customarily deal in U.S. Treasury Obligations with respect to the Trusts, or
from any other reporting service or source of information which the Evaluator
deems appropriate.
Accrued Interest. Accrued interest is the accumulation of unpaid
interest on a bond from the last day on which interest thereon was paid.
Interest on Securities in the Trusts is actually paid semi-annually to the
Trusts. However, interest on the Securities in the applicable Trusts is
accounted for daily on an accrual basis. Because of this, the Trusts always
have an amount of interest earned but not yet collected by the Trustee because
of non-collected coupons. For this reason, the Public Offering Price of Units
of the Trusts will have added to it the proportionate share of accrued and
undistributed interest to date of settlement.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price on the sale
of Units to the public, the Trustee will advance the amount of accrued interest
as of the First Settlement Date as set forth in the "Summary of Essential
Information" for each Trust in Part A and the same will be distributed to the
Sponsor as the Unit Holder of record as of the First Settlement Date.
Consequently, the amount of accrued interest to be added to the Public Offering
Price of Units will include only accrued interest from the First Settlement
Date to date of settlement, less any distributions from the Interest Account
subsequent to the First Settlement Date. Thus, since the First Settlement Date
is the date of settlement for anyone ordering Units on the date of this
Prospectus, no accrued interest will be added to the Public Offering Price of
Units ordered on the initial Date of Deposit.
Except through an advancement of its own funds, the Trustee will have
no cash for distribution to Unit Holders until it receives interest payments on
the Securities in the Trust. The Trustee has agreed to make advancements of its
own funds in order to reduce the amount of time before monthly or quarterly
distributions of interest in Unit Holders commence (see "Interest and Principal
Distributions"). The Trustee will recover its advancements without interest or
other costs to such Trust from interest received on the Securities in the
Trust. When these advancements have been recovered, regular distributions of
interest to Unit Holders will be commenced. The Interest Account during the
initial months of the Trusts will include some cash representing interest which
has been collected but will predominantly consist of uncollected accrued
interest which is not available for distribution. Since the Trusts normally
receive the interest on Securities twice a year and the interest on the
Securities in the Trusts is accrued on a daily basis, the Trusts usually will
have an amount of interest accrued but not actually received and distributed to
Unit Holders. A Unit Holder will not recover his proportionate share of accrued
interest until the Units are sold or redeemed, or such Trust is terminated. At
that time, the Unit Holder will receive his proportionate share of the accrued
interest computed to the settlement date in the case of sale or termination and
to the date of tender in the case of redemption.
Volume and Other Discounts. Units of the Trusts are available to Unit
Holders at a volume discount ("Volume Discount") from the Public Offering Price
during the initial public offering. Volume Discount will result in a reduction
of the sales charge applicable to such purchases. Furthermore, Volume Discount
applies to the cumulative Units purchased by a Unit Holder during a period of
60 days from the initial date of sale of the Units to such Unit Holder. Units
purchased by the same purchasers in separate transactions during the 60-day
period will be aggregated for purposes of determining if such purchaser is
entitled to a Volume Discount provided that such purchaser must own at least
the lesser of either (i) the required number of Units or (ii) the required
dollar amount at the Public Offering Price, at the time such determination is
made. Units held in the name of the spouse of the purchaser or in the name of a
child of the purchaser under 21 years of age are deemed for the purposes hereof
to be registered in the name of the purchaser. Volume Discount is also
applicable to a trustee or other fiduciary purchasing securities for a single
trust estate or single fiduciary account. As a result of such
6
387339.1
<PAGE>
discounts, units are sold to dealers/agents at prices which represent a
concession as reflected below. The Sponsor reserves the right to change these
discounts from time to time. The amount of Volume Discount, the approximate
sales charge and the dealer concession applicable to such purchases are as
follows:
<TABLE>
<CAPTION>
Volume Discount Approximate Approximate
Lesser of Number of from Public Reduced Dealer/Agent
Units or Dollar Amount Sales Charge Offering per Unit Sales Charge Concession
- ---------------------- ------------ ----------------- ------------ ----------
<S> <C> <C> <C> <C>
Treasury Income Series 19
Less than 500,000............................ 1.70% 0% 1.70% 1.00%
500,000 to 999,999........................... 1.70% .15% 1.55% .95%
1,000,000 and above*......................... 1.70% .35% 1.35% .80%
Treasury Income Series 20
Less than 500,000............................ 1.80% 0% 1.80% 1.05%
500,000 to 999,999........................... 1.80% .15% 1.65% 1.00%
1,000,000 and above*......................... 1.80% .40% 1.40% .85%
Asset Builder Series 21
Less than 500,000............................ 1.80% 0% 1.80% 1.10%
500,000 to 999,999........................... 1.80% .15% 1.65% 1.00%
1,000,000 and above*......................... 1.80% .40% 1.40% .85%
</TABLE>
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* For any transactions of 1,000,000 Units or more or over $1,000,000,
the Sponsor intends to negotiate the applicable sales charge and such
charge will be disclosed to any such purchaser.
Units may be purchased in the primary or secondary market at the
Public Offering Price (for purchases which do not qualify for a volume
discount) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "Public Offering-Distribution of Units") by
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.
Rollover Privilege. In addition, to the extent Units of each QUILTS
trust are currently available from the Sponsor, Unit Holders of the Trusts may
elect to rollover principal distributions paid to them as Securities in their
respective Trusts mature into additional units of such available QUILTS trusts
at a reduced sales charge equal to the first breakpoint of the Trust purchased
described above on the day the rollover is executed. Reduced sales charges are
available only on proceeds received from principal distributions from maturing
Securities of the Trust. Furthermore, for rollover transactions of any amount,
dealers/agents will receive concessions equal to the first breakpoint of the
Trust purchased described above on the day the rollover is executed. For more
complete information concerning the rollover privilege, including charges and
expenses, the Unit Holders should contact their broker.
Net Asset Value Purchases. No sales charge will be applied to the
following transactions: purchases by persons who for at least 90 days have been
directors, trustees, officers or full-time employees of any of (i) the funds
distributed by OCC Distributors, (ii) Op Cap Advisors and (iii) OCC
Distributors, or their affiliates, their immediate relatives or any trust,
pension, profit sharing or other benefit plan for any of them; purchases by any
account advised by Oppenheimer Capital, the parent of Op Cap Advisors; and
purchases by an employee of a broker-dealer having a dealer or servicing
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agreement with OCC Distributors and/or a participating member of the
Oppenheimer Capital brokered CD selling group or of a bank or financial
intermediary currently offering QUILTS to its customers.
Distribution of Units. During the initial offering period (i) Units
issued on the initial Date of Deposit and (ii) Additional Units issued after
such date in respect of additional deposits of Securities, will be distributed
by the Sponsor and dealers at the Public Offering Price plus accrued interest.
The initial offering period in each case is thirty days unless extended by the
Sponsor for Units specified in (i) and (ii) in the preceding sentence. In
addition, Units may be distributed through dealers who are members of the
National Association of Securities Dealers, Inc. or other financial
intermediaries as permitted by law. Certain banks and thrifts will make Units
of each Trust available to their customers on an agency basis. A portion of the
sale charge paid by their customers is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Units;
however, the Glass-Steagall Act does permit certain agency transactions and the
banking regulators have indicated that these particular agency transactions are
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
The Sponsor intends to qualify the Units of the Trusts for sale in
Arkansas, California, Connecticut, Florida, Georgia, Illinois, Maryland,
Mississippi, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, West Virginia and the District of
Columbia. Additional states may be added from time to time.
From time to time the Sponsor may implement programs under which
dealers of a Trust may receive nominal awards from the Sponsor for each of
their registered representatives who have sold a minimum number of UIT Units
during a specified time period. In addition, at various times the Sponsor may
implement other programs under which the sales force of a dealer may be
eligible to win other nominal awards for certain sales efforts, or under which
the Sponsor will reallow to any such dealer that sponsors sales contests or
recognition programs conforming to criteria established by the Sponsor, or
participates in sales programs sponsored by the Sponsor, an amount not
exceeding the total applicable sales charges on the sales generated by such
person 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 dealers 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 a Trust. These programs will not change the price Unit
holders pay for their Units or the amount that a Trust will receive from the
Units sold.
The Sponsor may provide additional concessions to its affiliates in
connection with the distribution of the Units. The Sponsor reserves the right
to change the dealers concession at any time. Such Units may then be
distributed to the public by the dealers at the Public Offering Price then in
effect. The Sponsor reserves the right to reject, in whole or in part, any
order for the purchase of Units. Also, the Sponsor in its discretion may from
time to time pursuant to objective criteria established by the Sponsor pay fees
to qualifying Underwriters, brokers, dealers, banks and/or others 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
out of the assets of the Trusts. These programs will not change the price Unit
Holders pay for their Units or the amount that each Trust will receive from the
Units sold.
Sponsor's Profits. The Sponsor will receive a gross underwriting
commission (although the net commission retained will be lower because of the
concession paid to dealers) equal to 1.70% of the Public Offering Price per
Unit (equivalent to 1.729% of the net amount invested in the Securities) for
Treasury Income Series 19, 1.80% of the Public Offering Price per Unit
(equivalent to 1.833% of the net amount invested in the Securities) for
Treasury Income Series 20 and 1.80% of the Public Offering Price per Unit
(equivalent to 1.833% of the net amount invested in the Securities) for Asset
Builder Series 20. Additionally, the Sponsor may realize a profit on the
deposit of the Securities in the Trust representing the difference between the
cost of the Securities to the Sponsor and the cost of the
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Securities to the Trusts (see "Portfolios" in Part A). The Sponsor may realize
profits or sustain losses with respect to Securities deposited in the Trust
which were acquired from underwriting syndicates of which it was a member.
The Sponsor may have participated as a sole underwriter or manager,
co-manager or member of underwriting syndicates from which some of the
aggregate principal amount of the Securities were acquired for the Trusts in
the amounts set forth in Part A.
During the initial offering period and thereafter to the extent
Additional Units continue to be issued and offered for sale to the public the
Sponsor may also realize profits or sustain losses as a result of fluctuations
after the initial Date of Deposit in the offering prices of the Securities and
hence in the Public Offering Price received by the Sponsor for the Units. Cash,
if any, made available to the Sponsor prior to settlement date for the purchase
of Units may be used in the Sponsor's business subject to the limitations of 17
CFR 240.15c3-3 under the Securities Exchange Act of 1934, and may be of benefit
to the Sponsor.
In maintaining a market for the Units (see "Liquidity--Sponsor
Repurchase") the Sponsor will realize profits or sustain losses in the amount
of any difference between the price at which they buy Units and the price at
which they resell such Units.
Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price. Although the Public Offering Price of Units of the Trusts
will be determined on the basis of the current offering prices of the
Securities in the Trusts, the value at which Units may be redeemed or sold in
the secondary market will be determined on the basis of the current bid prices
of such Securities. On the initial Date of Deposit, the Public Offering Price
and the Sponsor's Initial Repurchase Price per Unit of each Trust (each based
on the offering side evaluation of the Securities in the Trusts) each exceeded
the Redemption Price and the Sponsor's secondary market Repurchase Price per
Unit (based upon the current bid side evaluation of the Securities in the
Trusts) by the amounts shown under "Summary of Essential Information" for each
Trust in Part A of this Prospectus. On the initial Date of Deposit, the bid
side evaluation for each Trust was lower than the offering side evaluation for
such Trust by the amount set forth in Part A. For this reason, among others
(including fluctuations in the market prices of such Securities and the fact
that the Public Offering Price includes the applicable sales charge), the
amount realized by a Unit Holder upon any redemption or Sponsor repurchase of
Units may be less than the price paid for such Units. See "Liquidity--Sponsor
Repurchase."
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
Units of the Trusts are offered to investors on a "dollar price" basis
(using the computation method previously described under "Public Offering
Price") as distinguished from a "yield price" basis (involving the lesser of
the yield as computed to maturity of bonds or to an earlier redemption date).
Since they are offered on a dollar price basis, the rate of return on an
investment in Units of Treasury Income Series 19 and Treasury Income Series 20
is measured in terms of "Estimated Current Return" and "Estimated Long Term
Return." The rate of return for Asset Builder Series 21 is only measured in
terms of "Estimated Long Term Return." This calculation of performance is
mandated by the rules of the Securities and Exchange Commission.
Estimated Long Term Return is calculated by: (1 ) computing the yield
to maturity or to an earlier call date (whichever results in a lower yield) for
each Security in each Trust's portfolio in accordance with accepted practices,
which practices take into account not only the interest payable on the Security
but also the amortization of premiums or accretion of discounts, if any; (2)
calculating the average of the yields for the Securities in each Trust's
portfolio by weighing each Security's yield by the market value of the Security
and by the amount of time remaining to the date to which the Security is priced
(thus creating an average yield for the portfolio of each Trust); and (3)
reducing the average yield for the portfolio of each Trust in order to reflect
estimated fees and expenses of such Trust and the maximum sales charge paid by
Unit Holders. The resulting Estimated Long Term Return represents a measure of
the return to Unit Holders earned over the estimated life of the Trusts. The
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Estimated Long Term Return as of the day prior to the initial Date of Deposit
is stated for each Trust under "Summary of Essential Information" in Part A.
Estimated Current Return is computed by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return does
not take into account the amortization of premium or accretion of discount, if
any, on the Securities in the portfolio of each Trust. Moreover, because
prevailing interest rates on Securities purchased at a premium are generally
higher than current interest rates on newly issued bonds of a similar type with
comparable rating, the Estimated Current Return per Unit may be affected
adversely if such Securities are redeemed prior to their maturity. On the
initial Date of Deposit, the Estimated Net Annual Interest Income per Unit
divided by the Public Offering Price resulted in the Estimated Current Return
stated for the applicable Trust under "Summary of Essential Information" in
Part A.
The Estimated Net Annual Interest Income per Unit of each Trust will
vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Securities in such Trust. The Public Offering Price will
vary with changes in the offering prices (bid prices in the case of the
secondary market) of the Securities. Therefore, there is no assurance that the
present Estimated Current Return or Estimated Long Term Return will be realized
in the future.
RIGHTS OF UNIT HOLDERS
Book-Entry Units. Ownership of Units of the Trusts will not be
evidenced by certificates. All evidence of ownership of the Units will be
recorded in book-entry form either at Depository Trust Company ("DTC") through
an investor's broker's account or through registration of the Units on the
books of the Trustee. Units held through DTC will be deposited by the Sponsor
with DTC in the Sponsor's DTC account and registered in the nominee name CEDE &
CO. Individual purchases of beneficial ownership interest in the Trust will be
made in book-entry form through DTC or the Trustee. Ownership and transfer of
Units will be evidenced and accomplished directly and indirectly by
book-entries made by DTC and its participants if the Units are evidenced at
DTC, or otherwise will be evidenced and accomplished by book-entries made by
the Trustee. DTC will record ownership and transfer of the Units among DTC
participants and forward all notices and credit all payments received in
respect of the Units held by the DTC participants. Beneficial owners of Units
will receive written confirmation of their purchase and sale from the
broker-dealer or bank from whom their purchase was made. Units are transferable
by making a written request properly accompanied by a written instrument or
instruments of transfer which should be sent registered or certified mail for
the protection of the Unit Holder. Unit Holders must sign such written request
exactly as their names appear on the record of the Trusts. Such signatures must
be guaranteed by a commercial bank or trust company, savings and loan
association or by a member firm of a national securities exchange.
Interest and Principal Distributions. Interest received by the Trusts
is credited by the Trustee to an Interest Account for the Trusts and a
deduction is made to reimburse the Trustee without interest for any amounts
previously advanced. Proceeds representing principal received from the
maturity, redemption, sale or other disposition of the Securities are credited
to a Principal Account of the Trust. Cash credited to the Interest Account and
Principal Account will not be reinvested by the Trusts prior to distribution.
Such cash balances are maintained by the Trustee and any income generated
thereon inures to the benefit of the Trustee and not the Trusts.
Distributions to each Unit Holder from the Interest Account are
computed as of the close of business on each Record Date for the following
Payment Date and consist of an amount substantially equal to one-quarter (for
quarterly payments) or one-twelfth (for monthly payments) of such Unit Holder's
pro rata share of the Estimated Net Annual Interest Income in the Interest
Account Distributions from the Principal Account of the Trusts (other than
amounts representing failed contracts, as previously discussed) will be
computed as of each quarterly Record Date for Treasury Income Series
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19 and as of each monthly Record Date for Treasury Income Series 20, and will
be made to the Unit Holder of the Trusts on or shortly after the next Quarterly
or Monthly Payment Date. Proceeds representing principal received from the
disposition of any of the Securities between a Record Date and a Payment Date
which are not used for redemptions of Units will be held in the Principal
Account and not distributed until the second succeeding Quarterly or Monthly
Payment Date. Persons who purchase Units between a Record Date and a Payment
Date will receive their first distribution on the second Payment Date after
such purchase.
Normally, interest payments on the Securities in the portfolios of the
Trusts which pay interest, are made on a semi-annual basis. Therefore, it
usually takes several months after the Date of Deposit for the Trustee to
receive sufficient interest payments on the Securities to begin quarterly or
monthly distributions of interest to Unit Holders. However, the Trustee has
agreed to advance sufficient funds to the Trusts in order to reduce the amount
of time before quarterly or monthly distributions of interest to Unit Holders
commence. Further, because interest payments are not received by the Trusts at
a constant rate throughout the year, interest distributions may be more or less
than the amount credited to the Interest Account as of a given Record Date. For
the purpose of minimizing fluctuations in the distributions from the Interest
Account, the Trustee will advance sufficient funds, without interest, as may be
necessary to provide interest distributions of approximately equal amounts. All
funds in respect of the Securities received and held by the Trustee prior to
distribution to Unit Holders may be of benefit to the Trustee and do not bear
interest to Unit Holders.
In order to acquire the "when, as, and if issued" Securities
contracted for by the Trusts, if any, it may be necessary to pay on the
settlement dates for delivery of such Securities amounts covering accrued
interest on such Securities which exceed (1) the amounts paid by Unit Holders
and (2) the amount which will be made available under the letter of credit
furnished by the Sponsor on the initial Date of Deposit for the purchase of
such Securities. The Trustee has agreed to pay for any amounts necessary to
cover any such excess and will be reimbursed therefor, without interest, when
funds become available from interest payments on the particular Securities with
respect to which such payments may have been made. Also, since interest on the
Securities in the portfolios of the Trusts does not accrue to the benefit of
Unit Holders until their respective dates of delivery, the Trustee will, in
order to provide income to the Unit Holders for this period of non-accrual,
reduce its fee applicable to the Trust in an amount equal to the amount of
interest that would have so accrued on such Securities in the Trust between the
date of settlement for the Units and such dates of delivery. To the extent such
non-accrual is in excess of the reduction in the Trustee's fee, the amount of
such excess will be distributed to Unit Holders as a return of capital.
As of the first day of each month, the Trustee will deduct from the
Interest Account of the Trusts, and, to the extent funds are not sufficient
therein, from the Principal Account of the Trusts, amounts necessary to pay the
expenses of the Trusts (see "Trust Expenses and Charges" in this Part B). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any applicable taxes or other governmental
charges that may be payable out of the Trusts. Amounts so withdrawn shall not
be considered a part of the Trusts' assets until such time as the Trustee shall
return all or any part of such amounts to the appropriate accounts. In
addition, the Trustee may withdraw from the Interest and Principal Accounts
such amounts as may be necessary to cover purchases of Replacement Securities
and redemptions of Units by the Trustee.
The estimated quarterly interest distribution per Unit for Treasury
Income Series 19 and the estimated monthly interest distribution per Unit for
Treasury Income Series 20 will initially be in the amount shown under "Summary
of Essential Information" for each Trust in Part A and will change and may be
reduced as Securities mature or are redeemed, exchanged or sold, or as expenses
of the Trusts fluctuate. No distribution need be made from the Principal
Account until the balance therein is an amount sufficient to distribute $1.00
per 1,000 Units.
Records. For each of the Trusts, the Trustee shall furnish Unit
Holders in connection with each distribution a statement of the amount of
interest, if any, and the amount of other receipts, if any, which are being
distributed, expressed in each case as a dollar amount per Unit. Within a
reasonable
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time after the end of each calendar year the Trustee will furnish to each
person who at any time during the calendar year was a Unit Holder of record, a
statement showing (a) as to the Interest Account: interest received (including
any earned original issue discount and amounts representing interest received
upon any disposition of Securities), amounts paid for purchases of Replacement
Securities and redemptions of Units, if any, deductions for applicable taxes
and fees and expenses of the Trusts, and the balance remaining after such
distributions and deductions, expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (b) as to the Principal Account: the
dates of disposition of any Securities and the net proceeds received therefrom
(including any unearned original issue discount but excluding any portion
representing accrued interest), deductions for payments of applicable taxes and
fees and expenses of the Trusts, amounts paid for purchases of Replacement
Securities and redemptions of Units, if any, and the balance remaining after
such distributions and deductions, expressed both as a total dollar amount and
as a dollar amount representing the pro rata share of each Unit outstanding on
the last business day of such calendar year; (c) a list of the Securities held
and the number of Units outstanding on the last business day of such calendar
year; (d) the Redemption Price per Unit based upon the last computation thereof
made during such calendar year; and (e) amounts actually distributed to Unit
Holders during such calendar year from the Interest and Principal Accounts,
separately stated, of each Trust, expressed both as total dollar amounts and as
dollar amounts representing the pro rata share of each Unit outstanding on the
last business day of such calendar year.
The Trustee shall keep available for inspection by Unit Holders at all
reasonable times during usual business hours, books of record and account of
its transactions as Trustee, including records of the names and addresses of
Unit Holders, certificates issued or held, a current list of Securities in the
portfolio of each Trust and a copy of the Trust Agreement.
TAX STATUS
In the opinion of Battle Fowler LLP, counsel for the Sponsor, under
existing law:
Each Trust is not an association taxable as a corporation for
United States federal income tax purposes and income of the Trusts
will be treated as income of the Unit Holders in the manner set forth
below. Each Unit Holder will be considered the owner of a pro rata
portion of each asset of a Trust under the grantor trust rules of
Sections 671-678 of the Internal Revenue Code of 1986, as amended (the
"Code").
Each Unit Holder will be considered to have received his pro
rata share of interest derived from each Trust asset when such
interest is received by the Trust. Each Unit Holder will be required
to include in his gross income, as determined for Federal income tax
purposes, original issue discount with respect to his interest in a
Security held by the Trust at the same time and in the same manner as
though the Unit Holder were the direct owner of such interest. Each
Unit Holder's pro rata share of each expense paid by the Trust is
deductible by the Unit Holder to the same extent as though the expense
had been paid directly by him.
Each Unit Holder will have a taxable event when a Security is
disposed of (whether by sale, exchange, redemption, or payment at
maturity) or when the Unit Holder redeems or sells his Units. The
total tax cost of each Unit to a Unit Holder must be allocated among
the cash and Securities held in the Trust in accordance with their
relative fair market value on the date the Unit Holder purchases his
Units in order to determine his per Unit tax basis for the Securities
represented thereby. If a Unit Holder's tax cost of his pro rata
interest in a Security exceeds the amount payable in respect of such
pro rata interest upon the maturity of the Security, such excess is a
"bond premium" which may be amortized by the Unit Holder at the Unit
Holder's election as provided in Section 171 of the Code.
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The tax basis of a Unit Holder with respect to his interest in a
Security will be increased by the amount of original issue discount thereon
properly included in the Unit Holder's gross income as determined for Federal
income tax purposes.
The amount of gain recognized by a Unit Holder on a disposition of a
Security by a Trust will be equal to the difference between such Unit Holder's
pro rata portion of the gross proceeds realized by the Trust on the disposition
and the Unit Holder's tax cost basis in his pro rata portion of the Security
disposed of. Any gain recognized on a sale or exchange of a Unit Holder's pro
rata interest in a Security, and not constituting a realization of accrued
"market discount" in the case of a Security issued after July 18, 1984, and any
loss will be a capital gain or loss, except in the case of a dealer or
financial institution. Gain realized on the disposition of the interest of a
Unit Holder in a market discount Security is treated as ordinary income to the
extent the gain does not exceed the accrued market discount. A Unit Holder has
an interest in a market discount Security in a case in which the Unit Holder's
tax cost for his pro rata interest in the Security is less than the stated
redemption price thereof at maturity (or the issue price plus original issue
discount accrued up to the acquisition date, in the case of an original issue
discount Security). If a Unit Holder has an interest in a market discount
Security and has incurred debt to acquire Units, the deductibility of a portion
of the interest incurred on such debt may be deferred. Any capital gain or loss
arising from the disposition of Unit Holder's pro rata interest in a Security
will be a long-term capital gain or loss if the Unit Holder has held his Units
and the Trust has held the Security for more than one year. Net capital gains
(i.e., the excess of net long-term capital gain over net short-term capital
loss) of individuals, estates and trusts are subject to a maximum nominal tax
rate of 28%. Such net capital gains may, however, result in a disallowance of
itemized deductions and/or affect a personal exemption phase-out. For taxable
year beginning after December 31, 1992, net capital gain from the disposition
of property held for investment is excluded from investment income for purposes
of computing the limitation on the deduction for investment interest applicable
to individuals. A taxpayer may, however, elect to include such net capital gain
in investment income if the taxpayer reduces the amount of net capital gain
that is otherwise eligible for the maximum 28% rate by such amount.
If the Unit Holder sells or redeems a Unit for cash, he is deemed
thereby to have disposed of his entire pro rata interest in all Trust assets
represented by the Unit and will have a taxable income or loss measured by the
difference between his per Unit tax basis for such assets, as described above,
and the amount realized.
Under the personal income tax laws of the State and City of New York,
the income of Trust will be treated as the income of the Unit Holders.
Each Trust may contain one or more Securities which were originally
issued at a discount ("original issue discount"). In general, original issue
discount can be defined as the difference between the price at which a Security
was issued and its stated redemption price at maturity. In the case of a
Security issued before July 2, 1982, original issue discount is deemed to
accrue (be "earned") ratably over the period from the date of issuance of the
Security to the date of maturity and is apportioned among the original holder
of the obligation and subsequent purchasers in accordance with a ratio, the
numerator of which is the number of calendar days the obligation was owned by
the holder and the denominator of which is the total number of calendar days
from the date of issuance of the obligation to its date of maturity. Gain or
loss upon the disposition of an original issue discount Security is measured by
the difference between the amount realized upon disposition and the amount paid
for such obligation. A holder may, however, exclude from gross income that
portion of such gain attributable to accrued interest and the "earned" portion
of original issue discount.
In the case of a Security issued after July 1, 1982, original issue
discount is deemed to accrue on a constant interest method, which corresponds
in general to the economic accrual of interest (adjusted to eliminate
proportionately on an elapsed-time basis any excess of the amount paid for the
Security over the sum of the issue price and the accrued original issue
discount on the acquisition date). Unit Holders generally will be required to
recognize the accrual of original issue discount as interest income currently
even though they will not receive a corresponding amount of cash until later
years. The tax basis in the Security is increased by the amount of original
issue discount that is deemed to
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accrue while the Security is held. The difference between the amount realized
on a disposition of the Security (excluding accrued interest) and the adjusted
tax basis of the Security will give rise to taxable gain or loss upon a
disposition of the Security by the Trust (or a sale or redemption of Units by a
Unit Holder).
The general rule that requires the holder of a debt instrument issued
at a discount to include in gross income on a current basis the sum of the
daily portions of original issue discount does not apply to a debt instrument
that has a fixed maturity not more than one year from the date of issue. For
short-term Government obligations held by a cash method taxpayer, if no special
election is made by the holder, income is not realized until the sale,
maturity, or other disposition of the obligation, and is ordinary income to the
extent the gain realized does not exceed an amount equal to the ratable share
of acquisition discount. Gain, if any, in excess of such amount should be a
short-term capital gain. Acquisition discount is the excess of the stated
redemption price at maturity of the obligation over the basis of the taxpayer
in the obligation. For accrual basis taxpayers and taxpayers treated for this
purpose as if they use the accrual method (dealers, banks, regulated investment
companies, common trust funds, and taxpayers engaged in hedging transactions),
acquisition discount on short-term Governmental obligations is includible in
income as it accrues, on a straight line basis, unless a special election is
made. Limitations apply to the deductibility of interest on loans incurred to
acquire short-term obligations and special rules apply to short-term
obligations that are a stripped bond or stripped coupon.
A Unit Holder who is neither a citizen nor a resident of the United
States and is not a United States domestic corporation (a "foreign Unit
Holder") will not generally be subject to United States Federal income tax on
his, her or its pro rata share of interest and original issue discount on a
Security held in the Trust or any gain from the sale or other disposition of
his, her or its pro rata interest in a Security held in the Trust, which
interest or original issue discount is not effectively connected with the
conduct by the foreign Unit Holder of a trade or business within the United
States and which gain is either (i) not from sources within the United States
or (ii) not so effectively connected, provided that:
(a) with respect to interest and original issue
discount the Security was issued after July 18, 1984;
(b) with respect to any U.S. source capital gain,
the foreign Unit Holder (if an individual) is not present in
the United States for 183 days or more during his or her
taxable year in which the gain was realized and so certifies;
and
(c) the foreign Unit Holder provides the required
certifications regarding (i) his, her or its status and, (ii)
in the case of U.S. source income, the fact that the
interest, original issue discount or gain is not effectively
connected with the conduct by the foreign Unit Holder of a
trade or business within the United States.
The interest and/or dividend income received by a foreign Unit Holder
from an entity of which it owns 10% or more of the voting stock in the case of
a corporation or 10% or more of the profits or capital interest in the case of
a partnership, will, however, be subject to federal income taxation. Foreign
Unit Holders should consult their own tax counsel with respect to United States
tax consequences of ownership of Units.
Each Unit Holder (other than a foreign Unit Holder who has properly
provided the certifications described above) will be requested to provide the
Unit Holder's taxpayer identification number to the Trustee and to certify that
the Unit Holder has not been notified that payments to the Unit Holder are
subject to back-up withholding. If the taxpayer identification number and an
appropriate certification are not provided when requested, 31% back-up
withholding will apply.
The foregoing discussion relates only to United States Federal and, to
the extent stated, New York State and City income taxes.
Investors should consult their tax counsel for advice with respect to
their own particular tax situations.
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After the end of each calendar year, the Trustee will furnish to each
Unit Holder an annual statement containing information relating to the interest
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or
payment at maturity of any Security or the sale by the Trust of any Security),
and the fees and expenses paid by the Trust. The Trustee will also furnish
required annual information returns to each Unit Holder and to the Internal
Revenue Service.
The Sponsor believes that Unit Holders who are individuals should not
generally be subject to state personal income taxes on the interest (including
original issue discount) received through each Trust. However, Unit Holders
(including individuals) may be subject to state and local taxes on any capital
gains (or market discount treated as ordinary income) derived from each Trust
and to other state and local taxes with respect to the interest derived from
each Trust. Moreover, Unit Holders will probably not be entitled to a deduction
for state tax purposes for their share of the fees and expenses paid by the
Trusts or for any interest on indebtedness incurred to purchase or carry their
Units. Even though the Sponsor believes that interest income (including
original issue discount) received through each Trust is exempt from state
personal income taxes on individuals in most states, Unit Holders should
consult their own tax advisers with respect to state and local taxation
matters.
LIQUIDITY
Sponsor Repurchase. The Sponsor, although not obligated to do so,
currently intends to maintain a secondary market for the Units and continuously
to offer to repurchase the Units. The Sponsor's secondary market repurchase
price after the initial public offering is completed, will be based on the
aggregate bid price of the Securities in each Trust portfolio and will be the
same as the redemption price. The aggregate bid price will be determined by the
Evaluator on a daily basis after the initial public offering is completed and
computed on the basis set forth under "Liquidity--Trustee Redemption." During
the initial offering period, the Sponsor's repurchase price will be based on
the aggregate offering price of the Securities in the Trusts. Unit Holders who
wish to dispose of their Units should inquire of the Sponsor as to current
market prices prior to making a tender for redemption. The Sponsor may
discontinue repurchase of Units if the supply of Units exceeds demand, or for
other business reasons. The date of repurchase is deemed to be the date on
which Units are received in proper form by OCC Distributors, Two World
Financial Center, 225 Liberty Street, New York, NY 10281-1698. Units received
after 4 P.M., New York Time, will be deemed to have been repurchased on the
next business day. In the event a market is not maintained for the Units, a
Unit Holder may be able to dispose of Units only by tendering them to the
Trustee for redemption.
Units purchased by the Sponsor in the secondary market may be
reoffered for sale by the Sponsor at a price based on the aggregate offering
price of the Securities in the Trusts plus (a) a 1.70% sales charge (1.729% of
the net amount invested) plus net accrued interest for Treasury Income Series
19, (b) a 1.80% sales charge (1.883% of the net amount invested) plus net
accrued interest for Treasury Income Series 20 and (c) a 1.80% sales charge
(1.833% of the net amount invested) plus net accrued interest for Treasury
Income Series 21. Any Units that are purchased by the Sponsor in the secondary
market also may be redeemed by the Sponsor if it determines such redemption to
be in its best interest.
The Sponsor may, under certain circumstances, as a service to Unit
Holders, elect to purchase any Units tendered to the Trustee for redemption
(see "Liquidity--Trustee Redemption" in this Part B). Factors which the Sponsor
will consider in making a determination will include the number of Units of all
Trusts which it has in inventory, its estimate of the salability and the time
required to sell such Units and general market conditions. For example, if in
order to meet redemptions of Units the Trustee must dispose of Securities, and
if such disposition cannot be made by the redemption date (seven calendar days
after tender), the Sponsor may elect to purchase such Units. Such purchase
shall be made by payment to the Unit Holder not later than the close of
business on the redemption date of an amount equal to the Redemption Price on
the date of tender.
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Trustee Redemption. Units may also be tendered to the Trustee for
redemption at its corporate trust office at 770 Broadway, New York, New York
10003, upon proper delivery of such Units and payment of any relevant tax. At
the present time there are no specific taxes related to the redemption of
Units. No redemption fee will be charged by the Sponsor or the Trustee. Units
redeemed by the Trustee will be cancelled.
Within seven calendar days following a tender for redemption, or, if
such seventh day is not a business day, on the first business day prior
thereto, the Unit Holder will be entitled to receive in cash an amount for each
Unit tendered equal to the Redemption Price per Unit computed as of the
Evaluation Time set forth under "Summary of Essential Information" for each
Trust in Part A 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 after the close of trading on the New York Stock Exchange, the
date of tender is the next day on which such Exchange is open for trading, and
such Units will be deemed to have been tendered to the Trustee on such day for
redemption at the Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from the
Interest Account, or, if the balance therein is insufficient, from the
Principal Account. All other amounts paid on redemption shall be withdrawn from
the Principal Account. The Trustee is empowered to sell Securities in order to
make funds available for redemptions. Such sales, if required, could result in
a sale of Securities by the Trustee at a loss. To the extent Securities are
sold, the size and diversity of such Trust will be reduced.
The Redemption Price per Unit is the pro rata share of each Unit in
each Trust determined by the Trustee on the basis of (i) the cash on hand in
the Trust or moneys in the process of being collected, (ii) the value of the
Securities in the Trust based on the bid prices of such Securities and (iii)
interest accrued thereon, less (a) amounts representing taxes or other
governmental charges payable out of each Trust, (b) the accrued expenses of
such Trust and (c) cash allocated for the distribution to Unit Holders of
record as of the business day prior to the evaluation being made. The Evaluator
may determine the value of the Securities in each Trust (1) on the basis of
current bid prices of the Securities obtained from dealers or brokers who
customarily deal in bonds comparable to those held by the Trusts, (2) on the
basis of bid prices for bonds comparable to any Securities for which bid prices
are not available, (3) by determining the value of the Securities by appraisal,
or (4) by any combination of the above. The Evaluator will determine the
aggregate current bid price evaluation of the Securities in each Trust, taking
into account the market value of the Securities in the manner described as set
forth under "Public Offering--Offering Price."
The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to purchase a Unit tendered for redemption or if the
Sponsor tenders a Unit or Units for redemption, in lieu of redeeming such Unit,
to sell such Unit in the over-the-counter market for the account of the
tendering Unit Holder at prices which will return to the Unit Holder an amount
in cash, net after deducting brokerage commissions, transfer taxes and other
charges, equal to or in excess of the Redemption Price for such Unit. The
Trustee will pay the net proceeds of any such sale to the Unit Holder on the
day he would otherwise be entitled to receive payment of the Redemption Price.
The Trustee reserves the right to suspend the right of redemption and
to postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or trading on that Exchange is restricted or
during which (as determined by the Securities and Exchange Commission) an
emergency exists as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the Securities and
Exchange Commission may by order permit. The Trustee and the Sponsor are not
liable to any person or in any way for any loss or damage which may result from
any such suspension or postponement.
A Unit Holder who wishes to dispose of his Units should inquire of his
bank or broker in order to determine if there is a current secondary market
price in excess of the Redemption Price.
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RETIREMENT PLANS
The Trusts may be an appropriate investment for retirement plans such
as IRAs, self-employed retirement plans (formerly Keogh Plans), pension,
profit-sharing plans and other qualified retirement plans.
Generally, capital gains and income received under each of the
foregoing plans are deferred from Federal taxation. All distributions from such
plans are generally treated as ordinary income but may, in some cases, be
eligible for special income averaging or tax-deferred rollover treatment.
Investors considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers with
respect to the establishment and maintenance of any such plan. Such plans are
offered by brokerage firms and other financial institutions. Fees and charges
with respect to such plans may vary.
Individual Retirement Account--IRA. Any individual under age 70 1/2
may contribute the lesser of $2,000 or 100% of compensation to any IRA
annually. Such contributions are fully deductible if the individual (and spouse
if filing jointly) is not covered by a retirement plan at work.
A participant's interest in an IRA must be, or commence to be,
distributed to the participant not later than April 1 of the calendar year
following the year during which the participant attains age 70 1/2.
Distributions made before attainment of age 59 1/2, except in the case of the
participant's death or disability, or where the amount distributed is to be
rolled over to another IRA, or where the distributions are taken as a series of
substantially equal periodic payments over the participant's life or life
expectancy (or the joint lives or life expectancies of the participant and the
designated beneficiary) are generally subject to a surtax in an amount equal to
10% of the distribution. The amount of such periodic payments may not be
modified before the later of five years or attainment of age 59 1/2.
Excess contributions are subject to an annual 6% excise tax.
IRA applications disclosure statements and trust agreements are
available from the Sponsor upon request.
Qualified Retirement Plans. Units of each Trust may be purchased by
qualified pension or profit sharing plans maintained by corporations,
partnerships or sole proprietors. The maximum annual contribution for a
participant in a money purchase pension plan or to paired profit sharing and
pension plans is the lesser of 25% of compensation or $30,000. Prototype plan
documents for establishing qualified retirement plans are available from the
Sponsor upon request. The latest date by which a participant must commence
receiving benefits from a plan is generally the same as for an IRA. The 10%
early distribution surtax also applies, except that distributions received
after age 55 or as a result of a separation of service, and distributions
received to pay deductible medical expenses or pursuant to qualified domestic
relations order are not subject to the tax.
Excess Distributions Tax. In addition to the other taxes due by reason
of a plan distribution, a tax of 15% may apply to certain aggregate
distributions from IRAs, Keogh Plans, and corporate retirement plans to the
extent such aggregate taxable distributions exceed specified amounts (generally
$150,000, as adjusted during a tax year). This 15% tax will not apply to
distributions on account of death, qualified domestic relations order or to
eligible distributions that are rolled over to an IRA or other qualified plan.
In general, for lump sum distributions the excess distribution over $750,000
(as adjusted) will be subject to the 15% tax.
TRUST ADMINISTRATION
Portfolio Supervision. Except for the purchase of Replacement
Securities, Additional Securities or, as discussed herein, the acquisition of
any Securities for the Trust other than Securities initially deposited by the
Sponsor is prohibited. The Sponsor may direct the Trustee to dispose of
Securities upon (i) default in payment of principal or interest on such
Securities, (ii) default under other documents adversely affecting debt service
on such Securities, or (iii) decline in price or the occurrence of other
17
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market or credit factors that in the opinion of the Sponsor would make the
retention of such Securities in the Trusts detrimental to the interests of the
Unit Holders. If a default in the payment of principal or interest on any of
the Securities occurs and if the Sponsor fails to instruct the Trustee to sell
or hold such Securities, the Trust Agreement provides that the Trustee may sell
such Securities. The Trustee shall not be liable for any depreciation or loss
by reason of any sale of Securities or by reason of the failure of the Sponsor
to give directions to the Trustee. An affiliate of the Sponsor, Quest For Value
Advisors, will perform the portfolio supervisory functions noted herein on
behalf of the Sponsor and receive the Annual Supervisory Fee noted in Part A.
The Sponsor is authorized by the Trust Agreement to direct the Trustee
to accept or reject certain plans for the refunding or refinancing of any of
the Securities. Any bonds received in exchange or substitution will be held by
the Trustee subject to the terms and conditions of the Agreement to the same
extent as the Securities originally deposited. Within five days after such
deposit, notice of such exchange and deposit shall be given by the Trustee to
each Unit Holder registered on the books of the Trustee, including an
identification of the Securities eliminated and the Securities substituted
therefor.
Trust Agreement, Amendment and Termination. The Trust Agreement may be
amended by the Trustee the Sponsor and the Evaluator without the consent of any
of the Unit Holders: (1) to cure any ambiguity or to correct or supplement any
provision which may be defective or inconsistent; (2) to change any provision
thereof as may be required by the Securities and Exchange Commission or any
successor governmental agency; or (3) to make such other provisions in regard
to matters arising thereunder as shall not adversely affect the interests of
the Unit Holders.
The Trust Agreement may also be amended in any respect, or performance
of any of the provisions thereof may be waived, with the consent of the Unit
Holders owning 662/3% of the Units then outstanding for the purpose of
modifying the rights of Unit Holders; provided that no such amendment or waiver
shall reduce any Unit Holder's interest in a Trust without his consent or
reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of Unit Holders. The Trust Agreement may not be
amended, without the consent of all Unit Holders then outstanding, to increase
the number of Units issuable or to permit the acquisition of any securities in
addition to or in substitution for those initially deposited in the Trusts, or
to provide the Trustee with the power to engage in business or investment
activities not specifically authorized in the Indenture as originally adopted
or so as to adversely affect the characterization of a Trust as a grantor trust
for federal income tax purposes, except in accordance with the provisions of
the Trust Agreement. The Trustee shall promptly notify Unit Holders, in
writing, of the substance of any such amendment.
The Trust Agreement provides that the Trust shall terminate upon the
maturity, redemption or other disposition, as the case may be, of the last of
the Securities held in the Trust but in no event is it to continue beyond the
end of the calendar year preceding the fiftieth anniversary of the execution of
the Trust Agreement. If the value of a Trust shall be less than the minimum
amount set forth under "Summary of Essential Information" in Part A, the
Trustee may, in its discretion, and shall when so directed by the Sponsor,
terminate the Trusts. The Trust may also be terminated at any time with the
consent of the Unit Holders representing 100% of the Units then outstanding. In
the event of termination, written notice thereof will be sent by the Trustee to
all Unit Holders. Within a reasonable period after termination, the Trustee
must sell any Securities remaining in the terminated Trust, and, after paying
all expenses and charges incurred by the Trust, distribute to each Unit Holder,
upon surrender for cancellation of his Units, his pro rata share of the
Interest and Principal Accounts.
Alternatively, upon the termination of the Trust and further upon
receipt by the Trust, and subject to the conditions of an appropriate exemptive
order from the Securities and Exchange Commission, each Unit Holder's pro rata
share of the net asset value of the Trust will automatically be invested on
behalf of each Unit Holder in a mutual fund which invests in U.S. government
securities (the "Reinvestment Fund"). A copy of the current Prospectus of the
Reinvestment Fund will be delivered to Unit Holders at least 30 days prior to
the time reinvestment is made. At any time prior to the time of reinvestment,
Unit Holders may elect not to invest in the Reinvestment Fund, in which case,
their pro rata share of liquidation proceeds will be sent to them. This
investment in the Reinvestment
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Fund will not prevent Unit Holders from recognizing taxable gain or loss as a
result of the liquidation of the Trust, even though no cash will be distributed
to Unit Holders to pay any taxes. However, Unit Holders may redeem any shares
in the Reinvestment Fund in order to generate cash to pay these taxes. Unit
Holders should consult their own tax advisers regarding this matter.
The Sponsor. Effective as of November 28, 1995 the Sponsor, Quest for
Value Distributors, changed its name to OCC Distributors. The Sponsor is a
majority-owned subsidiary of Oppenheimer Capital. Since 1969, Oppenheimer
Capital has managed assets for many of the nation's largest pension plan
clients. Today, the firm has over $40 billion under management from separate
accounts and money market funds. The Quest for Value organization was created
in 1988 to introduce mutual funds designed to help individual investors achieve
their financial goals. OCC Distributors is committed to retirement planning and
services geared to the long term investment goals of the individual investor.
The Sponsor, a Delaware general partnership, is engaged in the mutual fund
distribution business. It is a member of the National Association of Securities
Dealers, Inc.
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations.
The Sponsor is liable for the performance of its obligations arising
from its responsibilities under the Trust Agreement, but will be under no
liability to Unit Holders for taking any action, or refraining from taking any
action, in good faith pursuant to the Trust Agreement, or for errors in
judgment except in cases of its own willful misfeasance, bad faith, negligence
or reckless disregard of its obligations and duties.
The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor. If at any time the Sponsor
shall resign or fail to perform any of its duties under the Trust Agreement or
becomes incapable of acting or becomes bankrupt or its affairs are taken over
by public authorities, then the Trustee may either (a) appoint a successor
Sponsor; (b) terminate the Trust Agreement and liquidate the Trusts; or (c)
continue to act as Trustee without terminating the Trust Agreement. Any
successor sponsor appointed by the Trustee shall be satisfactory to the Trustee
and, at the time of appointment, shall have a net worth of at least $1,000,000.
The Trustee. The Trustee is The Chase Manhattan Bank, with its
principal executive office located at 270 Park Avenue, New York, New York 10017
and its unit investment trust office at 770 Broadway, New York, New York 10003
(800) 428-8890. The Trustee is subject to the supervision by the Superintendent
of Banks of the State of New York, the Federal Deposit Insurance Corporation
and the Board of Governors of the Federal Reserve System.
The Trustee shall not be liable or responsible in any way for taking
any action, or for refraining from taking any action, in good faith pursuant to
the Trust Agreement, or for errors in judgment; or for an disposition of any
moneys, Securities or Certificates in accordance with the Trust Agreement,
except in case of its own willful misfeasance, bad faith, negligence or
reckless disregard of its obligations and duties. In addition, the Trustee
shall not be liable for any taxes or other governmental charges imposed upon or
in respect of the Securities or the Trusts which it may be required to pay
under current or future law of the United States or any other taxing authority
having jurisdiction. The Trustee shall not be liable for depreciation or loss
incurred by reason of the sale by the Trustee of any of the Securities pursuant
to the Trust Agreement
For further information relating to the responsibilities of the
Trustee under the Trust Agreement, reference is made to the material set forth
under "Rights of Unit Holders."
The Trustee may resign by executing an instrument in writing and
filing the same with the Sponsor, and mailing a copy of a notice of resignation
to all Unit Holders. In such an event the Sponsor is obligated to appoint a
successor Trustee as soon as possible. In addition, if the Trustee becomes
incapable of acting or becomes bankrupt or its affairs are taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor as
provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unit Holder by the Sponsor. If upon resignation of the
Trustee no successor has been appointed and has accepted the appointment within
thirty days after
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notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or removal of
the Trustee becomes effective only when the successor Trustee accepts its
appointment as such or when a court of competent jurisdiction appoints a
successor Trustee. 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.
Any corporation into which the Trustee may be merged or with which it
may be consolidated, or an corporation resulting from any merger or
consolidation to which the Trustee shall be a party, shall be the successor
Trustee. The Trustee must always be a banking corporation organized under the
laws of the United States or any State and have at all times an aggregate
capital, surplus and undivided profits of not less than $2,500,000.
TRUST EXPENSES AND CHARGES
All or a portion of the expenses incurred in creating and establishing
the Trusts, including the cost of the initial preparation and execution of the
Trust Agreement, registration of the Trusts and the Units under the Investment
Company Act of 1940 and the Securities Act of 1933, blue sky registration fees,
the initial fees and expenses of the Trustee, legal expenses and other actual
out-of-pocket expenses, will be paid by the Trusts and amortized over the life
of each of the Trusts or five years, whichever is shorter. All advertising and
selling expenses, as well as any organizational expenses not paid by the
Trusts, will be borne by the Sponsor at no cost to the Trusts.
The Sponsor will not charge the Trusts a fee for its services as such.
The Sponsor's affiliate will receive for portfolio supervisory
services to the Trusts an annual fee in the amount set forth under "Summary of
Essential Information" for each Trust in Part A. The Sponsor's fee may exceed
the actual cost of providing portfolio supervisory services for the Trusts, but
at no time will the total amount received for portfolio supervisory services
rendered to all series of the Qualified Unit Investment Liquid Trust Series in
any calendar year exceed the aggregate cost to the Sponsor of supplying such
services in such year. (See "Trust Administration--Portfolio Supervision.")
The Trustee's annual fee and estimated expenses are set forth under
"Summary of Essential Information" for each Trust in Part A. For a discussion
of the services performed by the Trustee pursuant to its obligations under the
Trust Agreement, see "Trust Administration" and "Rights of Unit Holders."
The Trustee's fees applicable to the Trusts are calculated based upon
the principal amount of Securities in the Trusts on the Record Date of such
month, payable monthly as of the Record Date from the Interest Account of the
Trusts to the extent funds are available and then from the Principal Account.
Both the supervisory fee and the Trustee's fee may be increased without
approval of the Unit Holders by amounts not exceeding proportionate increases
in consumer prices for services as measured by the United States Department of
Labor's Consumer Price Index entitled "All Services Less Rent."
The following additional charges are or may be incurred by the Trusts:
all expenses (including counsel fees) of the Trustee incurred and advances made
in connection with its activities under the Trust Agreement, including the
expenses and costs of any action undertaken by the Trustee to protect the
Trusts and the rights and interests of the Unit Holders; fees of the Trustee
for any extraordinary services performed under the Trust Agreement;
indemnification of the Trustee for any loss or liability accruing to it without
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with its acceptance or administration of the Trusts; indemnification
of the Sponsor for any losses, liabilities and expenses incurred in acting as
sponsors of the Trusts without negligence, bad faith or willful misconduct on
its part; and all taxes and other governmental charges imposed upon the
Securities or any part of the Trusts (no such taxes or charges are being
levied, made or, to the knowledge of the Sponsor, contemplated). The above
expenses, including the Trustee's fees, when paid by or owing to the Trustee
are secured by a first lien on the Trusts to which such expenses are charged.
In addition, the Trustee is empowered to sell Securities in order to make funds
available to pay all expenses.
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The accounts of the Trusts shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long as the Sponsor maintains a
secondary market, the Sponsor will bear any audit expense which exceeds 50
Cents per 1,000 Units. Unit Holders covered by the audit during the year may
receive a copy of the audited financial upon request.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby and certain
matters relating to federal tax law have been passed upon by Battle Fowler LLP,
75 East 55th Street, New York, New York 10022 as counsel for the Sponsor.
Carter, Ledyard & Milburn, Two Wall Street, New York, New York 10005 have acted
as counsel for the Trustee.
Independent Auditors. The Statements of Condition and Portfolios are
included herein in reliance upon the report of BDO Seidman, LLP, independent
auditors, and upon the authority of said firm as experts in accounting and
auditing.
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Qualified Unit Investment Liquid Trust Series ("QUILTS")
(A Unit Investment Trust)
QUILTS Income--U.S. Treasury Series 19
QUILTS Income--U.S. Treasury Series 20
QUILTS Asset Builder--U.S. Treasury Series 21
Prospectus Dated: July 24, 1996
Sponsor: Trustee and Evaluator:
OCC Distributors The Chase Manhattan Bank
Two World Financial Center 770 Broadway
225 Liberty Street New York, New York 10003
New York, New York 10281-1698 (800) 428-8890
(800) 628-6664
============================
Table of Contents
Title Page
PART A
Summary of Essential Information.........................................A-2
Independent Auditors' Report............................................A-14
Statements of Condition.................................................A-15
Portfolio and Cash Flow Information.....................................A-16
Underwriting ...........................................................A-19
PART B
The Trust..................................................................1
Risk Factors...............................................................3
Public Offering............................................................5
Estimated Long Term Return and
Estimated Current Return.................................................9
Rights of Unit Holders ...................................................10
Tax Status................................................................12
Liquidity.................................................................15
Retirement Plans..........................................................17
Trust Administration......................................................17
Trust Expenses and Charges................................................20
Other Matters.............................................................21
No person is authorized to give any information or to make any
representations not contained in Parts A and B of this Prospectus; and any
information or representation not contained herein must not be relied upon as
having been authorized by the Trust, the Trustee, the Evaluator, or the
Sponsor. The Trust is a registered as unit investment trust under the
Investment Company Act of 1940. Such registration does not imply that the Trust
or any of its Units have been guaranteed, sponsored, recommended or approved by
the United States or any state or any agency or officer thereof.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to whom
it is not lawful to make such offer in such state.
Parts A and B of this Prospectus do not contain all of the information
set forth in the registration statement and exhibits thereto, filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, and the Investment Company Act of 1940, and to which reference is
made.
387339.1
<PAGE>
PART II--ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM A--BONDING ARRANGEMENTS
The employees of OCC Distributors are covered under Brokers' Blanket
Policy, Standard Form 14, in the amount of $1,000,000.
ITEM B--CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers
and documents:
The facing sheet on Form S-6.
The Cross-Reference Sheet.
The Prospectus consisting of pages.
Undertakings.
Signatures.
Written consents of the following persons:
Battle Fowler LLP (included in Exhibit 3.1)
BDO Seidman, LLP
The Chase Manhattan Bank (included in Exhibit 5.1)
The following exhibits:
*1.1 -- Reference Trust Agreements including certain Amendments to the
Trust Indenture and Agreement referred to under Exhibit 1.1.1
below.
1.1.1 -- Trust Indenture and Agreement (filed as Exhibit 1.1.1 to
Amendment No. 2 to Form S-6 Registration Statement No.
33-57284 of Quest for Value's Unit Investment Laddered Trust
Series ("QUILTS"), QUILTS Monthly Income -- U.S. Treasury
Series 1; QUILTS Monthly Income -- U.S. Treasury Series 2 and
QUILTS Asset Builder -- U.S. Treasury Series 3 on March 19,
1993 and incorporated herein by reference).
1.3.4 -- Agreement of General Partnership of Quest for Value
Distributors dated July 9, 1987 (filed as Exhibit 1.3.4 to
Form S-6 Registration Statement No. 33-57284 of Quest for
Value's Unit Investment Laddered Treasury Securities
("QUILTS") on January 21, 1993 and incorporated herein by
reference).
1.4 -- Form of Master Agreement Among Underwriters (filed as Exhibit
1.4 to Amendment No. 2 to Form S-6 Registration Statement No.
33-57284 of Quest for Value's Unit Investment Laddered Trust
Series ("QUILTS"), QUILTS Monthly Income -- U.S. Treasury
Series 1; QUILTS Monthly Income -- U.S. Treasury Series 2 and
QUILTS Asset Builder -- U.S. Treasury Series 3 on March 19,
1993 and incorporated herein by reference).
2.1 -- Form of Certificate (filed as Exhibit 2.1 to Amendment No. 2
to Form S-6 Registration Statement No. 33-57284 of Quest for
Value's Unit Investment Laddered Trust Series ("QUILTS"),
QUILTS Monthly Income -- U.S. Treasury Series 1; QUILTS
Monthly Income -- U.S. Treasury Series 2 and QUILTS Asset
Builder -- U.S. Treasury Series 3 on March 19, 1993 and
incorporated herein by reference).
- --------
* Filed herewith.
II-i
303942.1
<PAGE>
*3.1 -- Opinion of Battle Fowler LLP as to the legality of the
securities being registered, including their consent to the
filing thereof and to the use of their name under the headings
"Tax Status" and "Legal Opinions" in the Prospectus, and to
the filing of their opinion regarding tax status of the Trust.
*5.1 -- Consents of the Evaluator.
6.0 -- Powers of Attorney of Quest for Value Distributors, by the
majority of the Board of Directors and certain officers of
Oppenheimer Financial Corp., its Managing General Partner
(filed as Exhibit 6.0 to Amendment No. 2 to Form S-6
Registration Statement No. 33-57284 of Quest for Value's Unit
Investment Laddered Trust Series ("QUILTS"), QUILTS Monthly
Income -- U.S. Treasury Series 1; QUILTS Monthly Income --
U.S. Treasury Series 2 and QUILTS Asset Builder -- U.S.
Treasury Series 3 on March 19, 1993 and as Exhibit 6.0 to
Pre-Effective amendment No. 1 to Form S-6 Registration
Statement No. 33-57284 of Quest for Value's Investment Unit
Investment Laddered Trust Series ("QUILTS") on March 5, 1993
and incorporated herein by reference).
*27 -- Financial Data Schedule (for EDGAR filing only).
- --------
* Filed herewith.
II-ii
303942.1
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
SIGNATURES
The registrant, Qualified Unit Investment Liquid Trust Series, QUILTS
Income -- U.S. Treasury Series 19, QUILTS Income -- U.S. Treasury Series 20 and
QUILTS Asset Builder -- U.S. Treasury Series 21, hereby identifies Qualified
Unit Investment Liquid Trust Series ("QUILTS"), QUILTS Income -- U.S. Treasury
Series 12, QUILTS Income -- U.S. Treasury Series 13 and QUILTS Asset Builder --
U.S. Treasury Series 14 for purpose of the representations required by Rule 487
and represents the following:
(1) That the portfolio securities deposited in the series as to
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 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 statement for such previous series as to which the
effective date was determined by the Commissioner 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, Qualified Unit Investment Liquid Trust Series ("QUILTS"), QUILTS
Income -- U.S. Treasury Series 19, QUILTS Income -- U.S. Treasury Series 20 and
QUILTS Asset Builder -- U.S. Treasury Series 21 has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of New York and State of New York on the
24th day of July, 1996.
QUALIFIED UNIT INVESTMENT LIQUID TRUST SERIES
("QUILTS"),
QUILTS INCOME -- U.S. TREASURY SERIES 19,
QUILTS INCOME -- U.S. TREASURY SERIES 20 AND
QUILTS ASSET BUILDER -- U.S. TREASURY SERIES 21
(Registrant)
OCC DISTRIBUTORS
(Depositor)
By: OPPENHEIMER FINANCIAL CORP.,
as Managing General Partner of the Depositor
By: /s/ SUSAN A. MURPHY
(Susan A. Murphy, Attorney-in-Fact)
II-iii
303942.1
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons,
who constitute the principal officers and a majority of the directors of
Oppenheimer Financial Corp., the Managing General Partner of the Depositor, in
the capacities and on the date indicated.
NAME TITLE DATE
STEPHEN ROBERT* Chief Executive Officer and Director
Stephen Robert
NATHAN GANTCHER* Chief Operating Officer and Director
Nathan Gantcher
ROGER EINIGER* Chief Administrative Officer and Director
Roger Einiger
JOSEPH LAMOTTA* Director
Joseph LaMotta
ANTONIO FERNANDEZ* Chief Financial Officer and Treasurer
Antonio Fernandez
*By: /s/ SUSAN A. MURPHY July 24, 1996
(Susan A. Murphy, Attorney-in-Fact)
- --------
* Executed copy of Power of Attorney filed as Exhibit 6.0 to Amendment No. 2
to Registration Statement No. 33-57284 on March 19, 1993, and as Exhibit
6.0 to the Pre-Effective Amendment No. 1 to Registration Statement No.
33-57284 on March 5, 1993.
II-iv
303942.1
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Sponsor, Trustee, and Unit Holders of
QUILTS Income -- U.S. Treasury Series 19
QUILTS Income -- U.S. Treasury Series 20
QUILTS Asset Builder -- U.S. Treasury Series 21
We have issued our report dated July 23, 1996 on the Statements of Condition
and Portfolios of Qualified Unit Investment Liquid Trust Series ("QUILTS"),
QUILTS Income -- U.S. Treasury Series 19 ("Treasury Income Series 19"), QUILTS
Income -- U.S. Treasury Series 20 ("Treasury Income Series 20") and QUILTS
Asset Builder -- U.S. Treasury Series 21 ("Asset Builder Series 21") as of July
23, 1996 contained in the Registration Statement on Form S-6 and the
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
"Independent Auditors."
BDO Seidman, LLP
New York, New York
July 23, 1996
II-v
303942.1
QUALIFIED UNIT INVESTMENT
LIQUID TRUST SERIES ("QUILTS")
QUILTS INCOME - U.S. TREASURY SERIES 19
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated July 23,
1996 among OCC Distributors, as Depositor, and The Chase Manhattan Bank, as
Trustee and Evaluator, sets forth certain provisions in full and incorporates
other provisions by reference to the document entitled "Quest For Value's Unit
Investment Laddered Trust Series ("QUILTS") And Subsequent Series And Any Other
Future Trusts For Which Quest For Value Distributors Acts As Sponsor" dated
June 28, 1995 (the "Indenture") as amended in part by this Agreement
(collectively, such documents hereinafter called the "Indenture and
Agreement"). This Agreement and the Indenture, as incorporated by reference
herein, will constitute a single instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement as defined
in Section 1.1 of the Indenture, and shall be amended and modified from time to
time by an Addendum as defined in Section 1.1 (1) of the Indenture, such
Addendum setting forth any Additional Securities as defined in Section 1.1 (2)
of the Indenture;
WHEREAS, the Depositor wishes to deposit Securities, and any
Additional Securities as listed on any Addendums hereto, into the Trust and
issue Units, and Additional Units as the case maybe, in respect thereof
pursuant to Sections 2.1 and 2.6 of the Indenture; and
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee and the Evaluator agree
as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Section 1. Subject to the provisions of Part II hereof, all the
provisions contained in the Indenture 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
C/M: 11205.0009 284575.1
<PAGE>
as though said provisions had been set forth in full in this instrument except
that the following sections of the Indenture hereby are amended as follows:
(a) All references to the words "Quest for Value Distributors"
appearing therein are hereby deleted and the words "OCC Distributors" are
hereby added in place thereof.
(b) All references to the words "United States Trust Company of New
York" appearing therein are hereby deleted and the words "The Chase Manhattan
Bank" are hereby added in place thereof.
(c) Section 1.1(18) is hereby amended by deleting the words "The
Bank of New York" and inserting the words "The Chase Manhattan Bank" in place
thereof.
(d) Section 3.14 is hereby amended by deleting
subparagraph (b).
Section 2. This Reference Trust Agreement may be amended and
modified by Addendums, attached hereto, evidencing the purchase of Additional
Securities which have been deposited to effect an increase over the number of
Units initially specified in Part II of this Reference Trust Agreement
("Additional Closings"). The Depositor, Trustee and Evaluator hereby agree that
their respective representations, agreements and certifications contained in
the Closing Memorandum dated July 23, 1996, relating to the initial deposit of
Securities continue as if such representations, agreements and certifications
were made on the date of such Additional Closings and with respect to the
deposits made therewith, except as such representations, agreements and
certifications relate to their respective By-Laws as to which they each
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions are hereby
agreed to:
(a) The Securities (including Contract Securities) listed in
Schedule A hereto have been deposited in the Trust under this Agreement.
(b) The number of Units delivered by the Trustee in exchange for
the Securities referred to in Section 2.3 is 250,000.
-2-
C/M: 11205.0009 284575.1
<PAGE>
(c) For the purposes of the definition of Unit in item (19) of
Section 1.1, the fractional undivided interest in and ownership of the Trust
per 1,000 Units initially is 1/250 as of the date hereof.
(d) The term Record Date shall mean the fifteenth day of each month
(or the last business day prior thereto) commencing on October 15, 1996.
(e) The term Payment Date shall mean the last day of each month
(or the last business day prior thereto) commencing on October 31, 1996,
provided, however, that proceeds of maturity of any Security which matures on
the 15th day of a month shall be paid in the fifth business day thereafter.
(f) The First Settlement Date shall mean July 29,
1996.
(g) For purposes of Section 6.1(g), the liquidation amount is
hereby specified to be 40% of the aggregate value of the Securities as of the
date of the last deposit of Additional Securities.
(h) For purposes of Section 6.4, the Trustee shall be paid per
annum $.80 per 1,000 Units.
(i) For purposes of Section 7.4, the Depositor's maximum
supervisory annual fee is hereby specified to be $.10 per $1,000 principal
amount of Securities.
(j) The fiscal year for the Trust shall end on
June 30th of each year.
(k) For purposes of these Series of Qualified Unit Investment
Liquid Trust Series ("QUILTS"), the form of Certificate set forth in the
Indenture shall be appropriately modified to reflect the titles of these Series
as set forth above.
IN WITNESS WHEREOF, the parties hereto have caused this Reference
Trust Agreement to be duly executed on the date first above written.
[Signatures on separate pages]
-3-
C/M: 11205.0009 284575.1
<PAGE>
OCC DISTRIBUTORS
as Depositor
By: OPPENHEIMER FINANCIAL CORP.
as Managing Partner of the
Depositor
By: /s/ Susan Murphy
Authorized Person
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
I, Kelly McConvery, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that Susan Murphy, personally known to me to
be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be an Authorized Person of Oppenheimer Financial
Corp., a Delaware corporation, appeared before me this day in person, and
acknowledged that he/she signed and delivered the said instrument as his/her
free and voluntary act as such Authorized Person and as the free and voluntary
act of said Oppenheimer Financial Corp., for the uses and purposes therein set
forth.
GIVEN under my hand and notarial seal this 23rd day of July, 1996.
/s/ Kelly McConvery
Notary Public
(SEAL) Kelly McConvery
Notary Public, State of New York
No. 0IMC5044884
Qualified in New York County
Commission Expires June 5, 1997
My Commission expires:
C/M: 11205.0009 284575.1
<PAGE>
THE CHASE MANHATTAN BANK
as Trustee and Evaluator
By: /s/ Thomas Porrazzo
(SEAL)
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
I, Ada Iris Vega, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that Thomas Porrazzo, personally known to me
to be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be a Vice President of The Chase Manhattan Bank,
appeared before me this day in person, and acknowledged that he sealed with the
corporate seal of The Chase Manhattan Bank and signed and delivered the said
instrument as his free and voluntary act as such Vice President and as the free
and voluntary act of said The Chase Manhattan Bank, for the uses and purposes
therein set forth.
GIVEN under my hand and notarial seal this 22nd day of July, 1996.
/s/ Ada Iris Vega
Notary Public
(SEAL) Ada Iris Vega
Notary Public, State of New York
No. 4864106
Qualified in New York County
Commission Expires 6-30-98
My Commission expires:
<PAGE>
Schedule A
QUILTS
Treasury Income Series 19
AS OF DATE OF DEPOSIT, JULY 23, 1996
<TABLE>
<CAPTION>
Aggregate Coupon/ Cost of
Portfolio Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Dates to Trust (2)
--- ------ ------------------ ----- ------------
<S> <C> <C> <C> <C>
1 $ 50,000 U.S. Treasury Note 5.625% $ 49,633
1/31/98
2 50,000 U.S. Treasury Note 5.875% 49,727
4/30/98
3 50,000 U.S. Treasury Note 5.250% 49,070
7/31/98
4 50,000 U.S. Treasury Note 4.750% 48,375
10/31/98
5 50,000 U.S. Treasury Note 5.000% 48,437
1/31/99
-------------------- ------------------
$250,000 $245,242
==================== ==================
</TABLE>
C/M: 11205.0014 388720.1
C/M: 11205.0009 284575.1
<PAGE>
QUALIFIED UNIT INVESTMENT
LIQUID TRUST SERIES ("QUILTS")
QUILTS INCOME - U.S. TREASURY SERIES 20
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated July 23,
1996 among OCC Distributors, as Depositor, and The Chase Manhattan Bank, as
Trustee and Evaluator, sets forth certain provisions in full and incorporates
other provisions by reference to the document entitled "Quest For Value's Unit
Investment Laddered Trust Series ("QUILTS") And Subsequent Series And Any Other
Future Trusts For Which Quest For Value Distributors Acts As Sponsor" dated
June 28, 1995 (the "Indenture") as amended in part by this Agreement
(collectively, such documents hereinafter called the "Indenture and
Agreement"). This Agreement and the Indenture, as incorporated by reference
herein, will constitute a single instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement as defined
in Section 1.1 of the Indenture, and shall be amended and modified from time to
time by an Addendum as defined in Section 1.1 (1) of the Indenture, such
Addendum setting forth any Additional Securities as defined in Section 1.1 (2)
of the Indenture;
WHEREAS, the Depositor wishes to deposit Securities, and any
Additional Securities as listed on any Addendums hereto, into the Trust and
issue Units, and Additional Units as the case maybe, in respect thereof
pursuant to Sections 2.1 and 2.6 of the Indenture; and
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee and the Evaluator agree
as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Section 1. Subject to the provisions of Part II hereof, all the
provisions contained in the Indenture 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
C/M: 11205.0009 284763.1
<PAGE>
as though said provisions had been set forth in full in this instrument except
that the following sections of the Indenture hereby are amended as follows:
(a) All references to the words "Quest for Value Distributors"
appearing therein are hereby deleted and the words "OCC Distributors" are
hereby added in place thereof.
(b) All references to the words "United States Trust Company of New
York" appearing therein are hereby deleted and the words "The Chase Manhattan
Bank" are hereby added in place thereof.
(c) Section 1.1(18) is hereby amended by deleting the words "The
Bank of New York" and inserting the words "The Chase Manhattan Bank" in place
thereof.
(d) Section 3.14 is hereby amended by deleting
subparagraph (b).
Section 2. This Reference Trust Agreement may be amended and
modified by Addendums, attached hereto, evidencing the purchase of Additional
Securities which have been deposited to effect an increase over the number of
Units initially specified in Part II of this Reference Trust Agreement
("Additional Closings"). The Depositor, Trustee and Evaluator hereby agree that
their respective representations, agreements and certifications contained in
the Closing Memorandum dated July 23, 1996, relating to the initial deposit of
Securities continue as if such representations, agreements and certifications
were made on the date of such Additional Closings and with respect to the
deposits made therewith, except as such representations, agreements and
certifications relate to their respective By-Laws as to which they each
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions are hereby
agreed to:
(a) The Securities (including Contract Securities) listed in
Schedule A hereto have been deposited in the Trust under this Agreement.
(b) The number of Units delivered by the Trustee in exchange for
the Securities referred to in Section 2.3 is 250,000.
-2-
C/M: 11205.0009 284763.1
<PAGE>
(c) For the purposes of the definition of Unit in item (19) of
Section 1.1, the fractional undivided interest in and ownership of the Trust
per 1,000 Units initially is 1/250 as of the date hereof.
(d) The term Record Date shall mean the fifteenth day of the first
month of each calendar quarter (or the last business day prior thereto)
commencing on August 15, 1996.
(e) The term Payment Date shall mean the last day of the first
month of each calendar quarter (or the last business day prior thereto)
commencing on August 31, 1996, provided, however, that proceeds of maturity of
any Security which matures on the 15th day of a month shall be paid on the
fifth business day thereafter.
(f) The First Settlement Date shall mean July 29,
1996.
(g) For purposes of Section 6.1(g), the liquidation amount is
hereby specified to be 40% of the aggregate value of the Securities as of the
date of the last deposit of Additional Securities.
(h) For purposes of Section 6.4, the Trustee shall be paid per
annum $1.05 per 1,000 Units.
(i) For purposes of Section 7.4, the Depositor's maximum
supervisory annual fee is hereby specified to be $.10 per $1,000 principal
amount of Securities.
(j) The fiscal year for the Trust shall end on
June 30th of each year.
(k) For purposes of these Series of Qualified Unit Investment
Liquid Trust Series ("QUILTS"), the form of Certificate set forth in the
Indenture shall be appropriately modified to reflect the titles of these Series
as set forth above.
IN WITNESS WHEREOF, the parties hereto have caused this Reference
Trust Agreement to be duly executed on the date first above written.
[Signatures on separate pages]
-3-
C/M: 11205.0009 284763.1
<PAGE>
OCC DISTRIBUTORS
as Depositor
By: OPPENHEIMER FINANCIAL CORP.
as Managing Partner of the
Depositor
By: /s/ Susan Murphy
Authorized Person
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
I, Kelly McConvery, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that Susan Murphy, personally known to me to
be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be an Authorized Person of Oppenheimer Financial
Corp., a Delaware corporation, appeared before me this day in person, and
acknowledged that he/she signed and delivered the said instrument as his/her
free and voluntary act as such Authorized Person and as the free and voluntary
act of said Oppenheimer Financial Corp., for the uses and purposes therein set
forth.
GIVEN under my hand and notarial seal this 23rd day of July, 1996.
/s/ Kelly McConvery
Notary Public
(SEAL) Kelly McConvery
Notary Public, State of New York
No. 0IMC5044884
Qualified in New York County
Commission Expires June 5, 1997
My Commission expires:
C/M: 11205.0009 284763.1
<PAGE>
THE CHASE MANHATTAN BANK
as Trustee and Evaluator
By: /s/ Thomas Porrazzo
(SEAL)
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
I, Ada Iris Vega, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that Thomas Porrazzo personally known to me
to be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be a Vice President of The Chase Manhattan Bank,
appeared before me this day in person, and acknowledged that he sealed with the
corporate seal of The Chase Manhattan Bank and signed and delivered the said
instrument as his free and voluntary act as such Vice President and as the free
and voluntary act of said The Chase Manhattan Bank, for the uses and purposes
therein set forth.
GIVEN under my hand and notarial seal this 22nd day of July, 1996.
/s/ Ada Iris Vega
Notary Public
(SEAL) Ada Iris Vega
Notary Public, State of New York
No. 4864106
Qualified in New York County
Commission Expires 6-30-98
My Commission expires:
<PAGE>
Schedule A
QUILTS
Treasury Income Series 20
AS OF DATE OF DEPOSIT, JULY 23, 1996
<TABLE>
<CAPTION>
Coupon/ Cost of
Portfolio Aggregate Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
--- ------ ------------------ ------- ------------
<S> <C> <C> <C> <C>
1 $ 50,000 U.S. Treasury Note 5.625% $ 49,633
1/31/98
2 50,000 U.S. Treasury Note 6.375% 50,039
1/15/99
3 50,000 U.S. Treasury Note 6.375% 49,805
1/15/00
4 50,000 U.S. Treasury Note 5.250% 47,531
1/31/01
5 50,000 U.S. Treasury Note 6.625% 50,000
_________ 6/30/01 _________
$250,000 $247,008
======== ========
</TABLE>
C/M: 11205.0014 388720.1
C/M: 11205.0009 284763.1
<PAGE>
QUALIFIED UNIT INVESTMENT
LIQUID TRUST SERIES ("QUILTS")
QUILTS ASSET BUILDER - U.S. TREASURY SERIES 21
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement (the "Agreement") dated July 23,
1996, among OCC Distributors, as Depositor, and The Chase Manhattan Bank, as
Trustee and Evaluator, sets forth certain provisions in full and incorporates
other provisions by reference to the document entitled "Quest For Value's Unit
Investment Laddered Trust Series ("QUILTS") And Subsequent Series And Any Other
Future Trusts For Which Quest For Value Distributors Acts As Sponsor" dated
June 28, 1995 (the "Indenture") as amended in part by this Agreement
(collectively, such documents hereinafter called the "Indenture and
Agreement"). This Agreement and the Indenture, as incorporated by reference
herein, will constitute a single instrument.
WITNESSETH THAT:
WHEREAS, this Agreement is a Reference Trust Agreement as defined
in Section 1.1 of the Indenture, and shall be amended and modified from time to
time by an Addendum as defined in Section 1.1 (1) of the Indenture, such
Addendum setting forth any Additional Securities as defined in Section 1.1 (2)
of the Indenture;
WHEREAS, the Depositor wishes to deposit Securities, and any
Additional Securities as listed on any Addendums hereto, into the Trust and
issue Units, and Additional Units as the case maybe, in respect thereof
pursuant to Sections 2.1 and 2.6 of the Indenture; and
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee and the Evaluator agree
as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Section 1. Subject to the provisions of Part II hereof, all the
provisions contained in the Indenture are herein incorporated by reference in
their entirety and shall be deemed
C/M: 11205.0009 284764.1
<PAGE>
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 except that the
following sections of the Indenture hereby are amended as follows:
(a) All references to the words "Quest For Value Distributors"
appearing therein are hereby deleted and the words "OCC Distributors" are
hereby added in place thereof.
(b) All references to the words "United States Trust Company of New
York" appearing therein are hereby deleted and the words "The Chase Manhattan
Bank" are hereby added in place thereof.
(c) Section 1.1(18) is hereby amended by deleting the words "The
Bank of New York" and inserting the words "The Chase Manhattan Bank" in place
thereof.
(d) Section 3.14 is hereby amended by deleting
subparagraph (b).
Section 2. This Reference Trust Agreement may be amended and
modified by Addendums, attached hereto, evidencing the purchase of Additional
Securities which have been deposited to effect an increase over the number of
Units initially specified in Part II of this Reference Trust Agreement
("Additional Closings"). The Depositor, Trustee and Evaluator hereby agree that
their respective representations, agreements and certifications contained in
the Closing Memorandum dated July 23, 1996, relating to the initial deposit of
Securities continue as if such representations, agreements and certifications
were made on the date of such Additional Closings and with respect to the
deposits made therewith, except as such representations, agreements and
certifications relate to their respective By-Laws as to which they each
represent that their has been no amendment affecting their respective abilities
to perform their respective obligations under the Indenture.
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
Section 1. The following special terms and conditions are hereby
agreed to:
(a) The Securities (including Contract Securities) listed in
Schedule A hereto have been deposited in the Trust under this Agreement.
-2-
C/M: 11205.0009 284764.1
<PAGE>
(b) The number of Units delivered by the Trustee in exchange for
the Securities referred to in Section 2.3 is 250,000.
(c) For the purposes of the definition of Unit in item (19) of
Section 1.1, the fractional undivided interest in and ownership of the Trust
per 1,000 Units initially is 1/250 as of the date hereof.
(d) The term Record Date shall mean the date on which a Security
matures.
(e) The term Payment Date shall mean the last business day of the
month in which a Record Date occurs, provided, however, that proceeds of
maturity of any Security which matures on the 15th day of a month shall be paid
on the fifth business day thereafter. In computing the distribution to be made
in respect of the Record Date occurring on the maturity of the last maturing
zero-coupon Security, the Trustee may take into account the proceeds of any
interest-bearing Security to be received subsequent to such Record Date and on
or before the related Payment Date.
(f) The First Settlement Date shall mean July 29,
1996.
(g) For purposes of Section 6.1(g), the liquidation amount is
hereby specified to be 40% of the aggregate value of the Securities as of the
date of the last deposit of Additional Securities.
(h) For purposes of Section 6.4, the Trustee shall be paid per
annum $.35 per 1,000 Units.
(i) For purposes of Section 7.4, the Depositor's maximum
supervisory annual fee is hereby specified to be $.10 per $1,000 principal
amount of Securities.
(j) The fiscal year for the Trust shall end on
June 30th of each year.
(k) For purposes of these Series of Qualified Unit Investment
Liquid Trust Series ("QUILTS"), the form of Certificate set forth in the
Indenture shall be appropriately modified to reflect the titles of these Series
as set forth above.
IN WITNESS WHEREOF, the parties hereto have caused this Reference
Trust Agreement to be duly executed on the date first above written.
[Signatures on separate pages]
-3-
C/M: 11205.0009 284764.1
<PAGE>
OCC DISTRIBUTORS
as Depositor
By: OPPENHEIMER FINANCIAL CORP.
as Managing Partner of the
Depositor
By: /s/ Susan Murphy
Authorized Person
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
I, Kelly McConvery, a Notary Public in and for the said
County in the State aforesaid, do hereby certify that Susan Murphy,
personally known to me to be the same person whose name is subscribed to the
foregoing instrument and personally known to me to be an Authorized Person of
Oppenheimer Financial Corp., a Delaware corporation, appeared before me this
day in person, and acknowledged that he/she signed and delivered the said
instrument as his/her free and voluntary act as such Authorized Person and as
the free and voluntary act of said Oppenheimer Financial Corp., for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 23rd day of July, 1996.
/s/ Kelly McConvery
Notary Public
(SEAL) Kelly McConvery
Notary Public, State of New York
No. 0IMC5044884
Qualified in New York Coiunty
Commission Expires June 5, 1997
My Commission expires:
C/M: 11205.0009 284764.1
<PAGE>
THE CHASE MANHATTAN BANK
as Trustee and Evaluator
By: /s/ Thomas Porrazzo
(SEAL)
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
I, Ada Iris Vega, a Notary Public in and for the said County in the
State aforesaid, do hereby certify that Thomas Porrazzo, personally known to me
to be the same person whose name is subscribed to the foregoing instrument and
personally known to me to be a Vice President of The Chase Manhattan Bank,
appeared before me this day in person, and acknowledged that he sealed with the
corporate seal of The Chase Manhattan Bank and signed and delivered the said
instrument as the free and voluntary act as such Vice President and as the free
and voluntary act of said The Chase Manhattan Bank, for the uses and purposes
therein set forth.
GIVEN under my hand and notarial seal this 22nd day of July, 1996.
/s/ Ada Iris Vega
Notary Public
(SEAL) Ada Iris Vega
Notary Public, State of New York
No. 4864106
Qualified in New York County
Commission Expires 6-30-98
My Commission expires:
C/M: 11205.0009 284764.1
<PAGE>
Schedule A
QUILTS
Asset Builder Series 21
AS OF DATE OF DEPOSIT, JULY 23, 1996
<TABLE>
<CAPTION>
Coupon/ Cost of
Portfolio Aggregate Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
--- ------ ------------------ ------- ------------
<S> <C> <C> <C> <C>
1 $ 50,000 U.S. Treasury Strip 0.000% $ 47,039
8/15/97
2 50,000 U.S. Treasury Strip 0.000% 44,010
8/15/98
3 50,000 U.S. Treasury Strip 0.000% 41,123
8/15/99
4 50,000 U.S. Treasury Strip 0.000% 38,502
8/15/00
5 47,000 U.S. Treasury Strip 0.000% 33,804
8/15/01
6 3,000 U.S. Treasury Note 7.875% 3,159
________ 8/15/01 _______
$250,000 $ 207,637
======== =========
</TABLE>
C/M: 11205.0014 388720.1
BATTLE FOWLER LLP
A LIMITED LIABILITY PARTNERSHIP
75 East 55th Street
New York, New York 10022
(212) 856-7000
July 23, 1996
OCC Distributors
Two World Financial Center
225 Liberty Street
New York, New York 10281
Re: Qualified Unit Investment Liquid
Trust Series ("QUILTS")
QUILTS Income - U.S. Treasury Series 19
QUILTS Income - U.S. Treasury Series 20
QUILTS Asset Builder - U.S. Treasury Series 21
Dear Sirs:
We have acted as special counsel for OCC Distributors, as
Depositor, Sponsor and Principal Underwriter (the "Depositor") of Qualified
Unit Investment Liquid Trust Series ("QUILTS"): QUILTS Income - U.S. Treasury
Series 19, QUILTS Income - U.S. Treasury Series 20, QUILTS Asset Builder - U.S.
Treasury Series 21 (the "Trusts") in connection with the issuance by the
Trusts, respectively, of 250,000, 250,000 and 250,000 units of fractional
undivided interest (the "Units") in the Trusts. Pursuant to the Trust
Agreements referred to below, the Depositor has transferred to the Trusts
certain securities and contracts to purchase certain securities together with
an irrevocable letter of credit to be held by the Trustee upon the terms and
conditions set forth in the Trust Agreements. (All securities to be acquired by
the Trusts are collectively referred to as the "Securities").
In connection with our representation, we have examined copies of
the following documents relating to the creation of the Trusts and the issuance
and sale of the Units: (a) the Trust Indenture and Agreement and related
Reference Trust Agreements, each of even date herewith, relating to the Trusts
(collectively the "Trust Agreements") among the Depositor and The Chase
Manhattan Bank, as Trustee and Evaluator; (b) the Notification of
C/M: 11205.0009 284745.1
<PAGE>
OCC Distributors 2
July 23, 1996
Registration on Form N-8A, as amended, and the Registration Statement on Form
N-8B-2, as amended, relating to the Trusts, as filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Investment Company Act
of 1940 (the "1940 Act"); (c) the Registration Statement on Form S-6
(Registration No. 333-08275) filed with the Commission pursuant to the
Securities Act of 1933 (the "1933 Act"), and all Amendments thereto (said
Registration Statement, as amended by said Amendment(s) being herein called the
"Registration Statement"); (d) the proposed form of final Prospectus (the
"Prospectus") relating to the Units, which is expected to be filed with the
Commission on July 24, 1996; (e) certified resolutions of the Board of
Directors of Oppenheimer Financial Corp., the Managing General Partner of the
Depositor (the "Managing General Partner"), authorizing the execution and
delivery by the Depositor of the Trust Agreements and the consummation of the
transactions contemplated thereby; (f) the Partnership Agreement of the
Depositor; and (g) a certificate of an authorized officer of the Managing
General Partner with respect to certain factual matters contained therein.
We have not reviewed the financial statements, compilation of the
Securities held by the Trusts, or other financial or statistical data contained
in the Registration Statement and the Prospectus, as to which you have been
furnished with the reports of the accountants appearing in the Registration
Statement and the Prospectus.
In addition, we have assumed the genuineness of all agreements,
instruments and documents submitted to us as originals and the conformity to
originals of all copies thereof submitted to us. We have also assumed the
genuineness of all signatures and the legal capacity of all persons executing
agreements, instruments and documents examined or relied upon by us.
Statements in this opinion as to the validity, binding effect and
enforceability of agreements, instruments and documents are subject: (i) to
limitations as to enforceability imposed by bankruptcy, reorganization,
moratorium, insolvency and other laws of general application relating to or
affecting the enforceability of creditors' rights, and (ii) to limitations
under equitable principles governing the availability of equitable remedies.
We are not admitted to the practice of law in any jurisdiction but
the State of New York and we do not hold ourselves out as experts in or express
any opinion as to the laws of other states or jurisdictions except as to
matters of Federal and Delaware corporate law.
C/M: 11205.0009 284745.1
<PAGE>
OCC Distributors 3
July 23, 1996
Based exclusively on the foregoing, we are of the opinion that
under existing law:
(1) The Trust Agreements have been duly authorized and entered into
by an authorized officer of the Depositor and are valid and binding obligations
of the Depositor in accordance with their respective terms.
(2) The execution and delivery of each of the Certificates
evidencing the Units of each of the Trusts has been duly authorized by the
Depositor and each such Certificate, when executed by the Depositor and the
Trustee in accordance with the provisions of such Certificate and the
respective Trust Agreements and issued for the consideration contemplated
therein, will constitute fractional undivided interest in the respective
Trusts, will be entitled to the benefits of the respective Trust Agreements,
will conform in all material respects to the description thereof for the Units
as provided in the Trust Agreements and the Registration Statement, and the
Units will be fully paid and non-assessable by the Trusts.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our name in the Registration
Statement and in the Prospectus under the headings "Tax Status" and "Legal
Opinions". We authorize you to deliver copies of this opinion to the Trustee
and the Trustee may rely on this opinion as fully and to the same extent as if
it had been addressed to it.
This opinion is intended solely for the benefit of the addressees
and the Trustee in connection with the issuance of the Units of the Trusts and
may not be relied upon in any other manner or by any other person without our
express written consent.
Very truly yours,
Battle Fowler LLP
C/M: 11205.0009 284745.1
July 23, 1996
OCC Distributors
Two World Financial Center
225 Liberty Street
New York, NY 10080-6116
Re: QUILTS Income - U.S. Treasury Series 19
Gentlemen:
We have examined Registration Statement File No. 333-08275 for the above
referenced trust. We hereby acknowledge that The Chase Manhattan is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Registration Statement of the reference to The Chase Manhattan as evaluator.
You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
Thomas Porrazzo
Vice President
<PAGE>
July 23, 1996
OCC Distributors
Two World Financial Center
225 Liberty Street
New York, NY 10080-6116
Re: QUILTS Income - U.S. Treasury Series 20
Gentlemen:
We have examined Registration Statement File No. 333-08275 for the above
referenced trust. We hereby acknowledge that The Chase Manhattan is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Registration Statement of the reference to The Chase Manhattan as evaluator.
You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
Thomas Porrazzo
Vice President
C/M 11205.0009 285060.1
<PAGE>
July 23, 1996
OCC Distributors
Two World Financial Center
225 Liberty Street
New York, NY 10080-6116
Re: QUILTS Asset Builder - U.S. Treasury Series 21
Gentlemen:
We have examined Registration Statement File No. 333-08275 for the above
referenced trust. We hereby acknowledge that The Chase Manhattan is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Registration Statement of the reference to The Chase Manhattan as evaluator.
You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
Thomas Porrazzo
Vice President
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the
statement of condition as of date of deposit and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001018965
<NAME> QUILTS 19
<SERIES>
<NUMBER> 1
<NAME> QUILTS
<MULTIPLIER> 1
<S> <C>
<CURRENCY> US DOLLARS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-23-1996
<PERIOD-END> JUL-23-1996
<PERIOD-TYPE> OTHER
<EXCHANGE-RATE> 0
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 245,242
<RECEIVABLES> 5,040
<ASSETS-OTHER> 13,333
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 263,615
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18,373
<TOTAL-LIABILITIES> 18,373
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 245,242
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 245,242
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the
statement of condition as of date of deposit and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001018965
<NAME> QUILTS 20
<SERIES>
<NUMBER> 2
<NAME> QUILTS
<MULTIPLIER> 1
<S> <C>
<CURRENCY> US DOLLARS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-23-1996
<PERIOD-END> JUL-23-1996
<PERIOD-TYPE> OTHER
<EXCHANGE-RATE> 0
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 247,008
<RECEIVABLES> 2,975
<ASSETS-OTHER> 13,333
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 263,316
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,308
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 247,008
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 247,008
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the
statement of condition as of date of deposit and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001018965
<NAME> QUILTS 21
<SERIES>
<NUMBER> 3
<NAME> QUILTS
<MULTIPLIER> 1
<S> <C>
<CURRENCY> US DOLLARS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-23-1996
<PERIOD-END> JUL-23-1996
<PERIOD-TYPE> OTHER
<EXCHANGE-RATE> 0
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 207,637
<RECEIVABLES> 104
<ASSETS-OTHER> 13,333
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 221,074
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,437
<TOTAL-LIABILITIES> 13,437
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 207,637
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 207,637
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
