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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 2, 1998
[NUVEEN LOGO] Nuveen Real Estate
Equity Opportunity Portfolio
Unit Trusts June 1998
CUSIP -DIVIDENDS IN CASH
CUSIP -DIVIDENDS REINVESTED
PROSPECTUS PART A DATED JUNE , 1998
Overview
The Nuveen Real Estate Op- Units of the Trust are not
portunity Portfolio, June deposits or obligations
1998 (the "Trust") is a of, or guaranteed or en-
unit investment trust con- dorsed by, any bank and
sisting of a diversified are not federally insured
portfolio of common stocks or otherwise protected by
(the "Securities") issued the FDIC or any other Fed-
by publicly traded equity eral agency and involve
real estate investment investment risk, including
trusts ("REITs") selected the possible loss of prin-
by John Nuveen & Co. In- cipal.
corporated ("Nuveen"), the
Sponsor of the Trust, with THESE SECURITIES HAVE NOT
the assistance of BT Alex. BEEN APPROVED OR DISAP-
Brown Incorporated ("BT PROVED BY THE SECURITIES
Alex. Brown"). The Trust AND EXCHANGE COMMISSION
seeks to provide capital NOR HAS THE COMMISSION
appreciation and dividend PASSED UPON THE ACCURACY
income. The Trust is OR ADEQUACY OF THIS PRO-
scheduled to terminate on SPECTUS. ANY REPRESENTA-
November 1, 2001. TION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Part A Prospectus may
not be distributed unless
accompanied by the Nuveen
Real Estate Opportunity
Portfolio Prospectus--Part
B which is dated June ,
1998. Part B of this Pro-
spectus is attached.
Contents
1 OVERVIEW 6 INVESTING IN THE TRUST
2 TRUST SUMMARY AND FINANCIAL 6 Sales Charges
HIGHLIGHTS 6 Dealer Concessions
2 Essential Information 6 Sponsor's Profits
2 Expense Information 7 GENERAL INFORMATION
4 TRUST STRATEGIES 7 Optional Features
4 Investment Objective 7 Secondary Market for Units
4 Investment Philosophy 7 Termination
4 Investor Suitability 7 The Sponsor
4 How the Trust Selects Investments 7 BT Alex. Brown
4 What are REITs? 8 SCHEDULE OF INVESTMENTS
5 ACQUISITION OF SECURITIES 9 STATEMENT OF CONDITION
5 RISK FACTORS 10 REPORT OF INDEPENDENT PUBLIC
6 SECURITIES SELECTED FOR THE TRUST ACCOUNTANTS
6 DISTRIBUTIONS
6 Income and Capital Distributions
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGIS-
TRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURI-
TIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS
TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFEC-
TIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
TION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
CODE NUMBER
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Nuveen Real Estate Opportunity Portfolio, June 1998
TRUST SUMMARY AND FINANCIAL HIGHLIGHTS as of June , 1998
ESSENTIAL INFORMATION
Initial Date of Deposit: June , 1998
Initial Number of Units: (1)
Fractional Undivided Interest per Unit: (1)1/
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PUBLIC OFFERING PRICE (2)
Aggregate Offering Price of Securi-
ties: $
Aggregate Offering Price of Securi-
ties per Unit: $10.00
Sales Charge: (3) $0.00
Initial Public Offering Price per
Unit: $10.00
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MANDATORY TERMINATION DATE
November 1, 2001
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ESTIMATED ANNUAL INCOME DISTRIBUTIONS (4)
Estimated Annual Income Distributions
(per Trust) $
Estimated Annual Income Distributions
(per Unit) $
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EXPENSE INFORMATION
SALES CHARGES (MAXIMUM TOTAL 0.00%) (3)
AMOUNT PER $1000
INVESTED
(AS OF THE INITIAL
DATE OF DEPOSIT)
------------------
Maximum Initial
Sales Charge Im-
posed on Pur-
chases (as a % of
Initial Public
Offering Price):
(3).............. 0.00% $0.00
Maximum Sales
Charge on Rein-
vested Dividends
(as a % of Ini-
tial Public Of-
fering Price):... 0.00% $0.00
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ESTIMATED ANNUAL OPERATING EXPENSES
(PER UNIT) (5)
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Trustee's Fee: $
Estimated Annual Amortization of Or-
ganizational and Offering Expenses:
[Evaluator's Annual Fee] $
Sponsor's Supervisory Fee (6) $
Total Annual Expenses: $
ESTIMATED COSTS OVER TIME
The following are the estimated cumu-
lative costs on a $1,000 investment,
assuming (as mandated by the Securi-
ties and Exchange Commission) a 5%
annual return, and reinvestment of
all distributions:
Over 1 Year $
Over 3 Years $
Over 5 Years $
Over 10 Years $
The examples reflect both the esti-
mated operating expenses and maximum
sales charge on an increasing invest-
ment (had the net annual return been
reinvested in the Trust). The exam-
ples should not be considered repre-
sentations of future expenses or an-
nual rates of return; the actual ex-
penses and annual rates of return may
be more or less than those used in
the examples.
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Notes to Essential Information and Expense Information:
(1) As of the close of business on the Initial Date of Deposit, the number of
Units of the Trust may be adjusted so that the Public Offering Price per
Unit will equal approximately $10.00. Thereupon, to the extent of any such
adjustment, the fractional undivided interest per Unit will increase or de-
crease accordingly, from the amounts indicated above.
(2) See "Public Offering Price" and "Unit Value and Evaluation" in Part B of
the Prospectus.
(3) On the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay a pro
rata share of any accumulated dividends in such Income Account. The Public
Offering Price as shown reflects the value of the Securities at the opening
of business on the Initial Date of Deposit and establishes the original
proportionate relationship amongst the individual Securities. Additional
Units will be created during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. Eastern Time, or as of any earlier closing
time on which the New York Stock Exchange has scheduled in advance to close
at such earlier time. No sales charge will be assessed on Units created on
the Initial Date of Deposit. For Units created after the Initial Date of
Deposit, the maximum sales charge is % of the Public Offering Price
per Unit. See "Public Offering Price" in Part B of this Prospectus.
(4) Estimated Annual Income Distributions are based on the most recently de-
clared dividends of the Securities. Estimated Annual Income Distributions
per Unit are based on the number of Units, the fractional undivided inter-
est in the Securities per Unit and the aggregate value of the Securities
per Unit as of the Initial Date of Deposit. Investors should note that the
actual amount of income distributed per Unit by the Trust will vary from
the estimated amount due to a variety of factors including, changes in the
items described in the preceding sentence, expenses and actual dividends
declared and paid by the issuers of the Securities.
(5) The Trust (and therefore Unitholders) will bear all or a portion of its or-
ganizational and offering costs (but not the expenses incurred in the
printing of preliminary and final prospectuses, nor the expenses incurred
in the preparation and printing of brochures and other advertising materi-
als or any other selling expenses), as is common for mutual funds. See
"Trust Operating Expenses" in Part B of this Prospectus and "Statement of
Condition." Historically, the sponsors of unit investment trusts have paid
all of the costs of establishing such trusts.
(6) The Sponsor's Supervisory Fee compensates the Sponsor and/or its affiliates
for maintaining surveillance over the portfolio and for performing certain
administrative services for the Trust. See "Trust Operating Expenses" in
Part B of this Prospectus.
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Trust Strategies
INVESTMENT OBJECTIVE
The objective of the Trust is to provide capital appreciation and dividend in-
come. There is no assurance that the Trust will achieve its investment objec-
tive.
INVESTMENT PHILOSOPHY
The Trust consists of a diversified portfolio of common stocks issued by pub-
licly traded equity REITs. The Trust is a non-managed investment vehicle which
employs a buy and hold investment strategy. The Trust plans to hold, for the
life of the Trust, the stocks selected. At the end of that period, the portfo-
lio will be liquidated. Nuveen intends to create additional Units of this
Trust. To do this, Nuveen expects to deposit additional Securities in the
Trust or cash (including a letter of credit) with instructions to the Trustee
to purchase additional Securities. Such deposit of Securities will be done in
a manner that will allow the original proportionate relationship among the Se-
curities to be maintained as closely as practicable.
INVESTOR SUITABILITY
The Trust is a suitable investment for investors:
. Seeking to own a diversified portfolio of REIT common stocks;
. Seeking attractive capital and dividend growth potential with moderated
risk.
. Seeking the professional research and selection expertise of Nuveen and BT
Alex. Brown.
. Purchasing the Trust through a tax-deferred vehicle.
The Trust is not a suitable investment if:
. You are unwilling to assume the risks inherent in investing in REIT common
stocks over a relatively short time horizon and the risks inherent in the
stock and real estate markets.
HOW THE TRUST SELECTS INVESTMENTS
The Securities included in the Trust's portfolio were selected by Nuveen's re-
nowned research department with the assistance of BT Alex. Brown, a leading
equity real estate specialist, and consist of the common stocks of REITs
listed on national securities exchanges. Nuveen believes the Securities have
the potential for attractive performance through capital appreciation and div-
idend income. The Securities were selected for a variety of reasons, includ-
ing: their growth potential, market position, low debt levels and the experi-
ence of their management team. The REITs included in the portfolio own many
properties, such as multi-family housing complexes, office buildings, indus-
trial complexes, shopping centers, hotels, health care facilities, self-stor-
age properties and recreational facilities. The Trust will not, however, in-
vest in REITs that are designated as "stapled" or "paired share" REITs. A de-
scription of the Securities included in the Trust is set forth below under
"Securities Selected for the Trust" and "Schedule of Investments."
WHAT ARE REITS?
REITs are financial vehicles that have as their objective the pooling of capi-
tal from a number of investors in order to participate directly in real estate
ownership or financing. REITs are generally fully integrated operating compa-
nies that have interests in income-producing real estate. REITs bear operating
expenses that include management fees. REITs are differentiated by the types
of real estate properties held and the actual geographic location of proper-
ties and fall into two major categories: equity REITs emphasize direct prop-
erty investment, holding their invested assets primarily in the ownership of
real estate or other equity interests, while mortgage REITs concentrate on
real estate financing, holding their assets primarily in mortgages secured by
real estate.
As of the Initial Date of Deposit, the Trust contains only equity REITs. REITs
obtain capital funds for investment in underlying real estate assets by sell-
ing debt or equity securities in the public or institutional capital markets
or by bank borrowing. Thus, the returns on common equities of the REITs in
which the Trust invests will be significantly affected by changes in costs of
capital and, particularly in the case of highly "leveraged" REITs (i.e., those
with large amounts of borrowings outstanding), by changes in the level of in-
terest rates. The objective of an equity REIT is to purchase income-producing
real estate properties in order to generate high levels of cash flow from
rental income and a gradual asset appreciation, and they typically invest in
properties such as office, retail, industrial, hotel and apartment buildings
and health care facilities. The success of a REIT is largely dependent on the
skills of the REIT manager.
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REITs are a creation of the tax law. REITs essentially operate as a corpora-
tion or business trust with the advantage of exemption from corporate income
taxes provided the REIT satisfies the requirements of Sections 856 through 860
of the Internal Revenue Code. The major tests for tax-qualified status are
that the REIT (i) be managed by one or more trustees or directors, (ii) issue
shares of transferable interest to its owners, (iii) have at least 100 share-
holders, (iv) have no more than 50% of the shares held by five or fewer indi-
viduals, (v) invest substantially all of its capital in real estate related
assets and derive substantially all of its gross income from real estate re-
lated assets and (vi) distribute at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail to
qualify for such tax status, the related shareholders (including the Trust)
could be adversely affected by the resulting tax consequences.
Acquisition of Securities
As of the opening of business on the Initial Date of Deposit, all of the Secu-
rities deposited in the Trust were acquired by Nuveen in open market purchases
on a national securities exchange.
During the day on the Initial Date of Deposit, it is expected that additional
Securities will be deposited in the Trust by Nuveen. Nuveen will acquire the
additional Securities to be deposited in the Trust during the day on the Ini-
tial Date of Deposit from BT Alex. Brown, which is acting as sole underwriter
to the issuers of the Securities. The acquisition of the Securities to be de-
posited in the Trust during the day on the Initial Date of Deposit by Nuveen
is expected to be effected at prices of up to % below the current market
value of the Securities due to various factors, including size of the pur-
chase, expectation of holding period and cost of issuance. As a result of
Nuveen's ability to purchase these Securities during the day on the Initial
Date of Deposit below market value, Nuveen will offer Units of the Trust cre-
ated on the Initial Date of Deposit with no sales charge. By virtue of buying
the Securities at prices below market prices during the day on the Initial
Date of Deposit, Nuveen will realize a profit on the deposit of the Securities
during the day on the Initial Date of Deposit of up to % of the market value
of these Securities, less concessions due to dealers and others. BT Alex.
Brown, who also acts as a dealer of Units of the Trust, will realize a profit
on the sale of the Securities to Nuveen equal to the difference between its
acquisition cost of such Securities and the sale price of the Securities to
Nuveen (expected to be up to % of the market value of the Securities).
After the Initial Date of Deposit, Securities deposited in the Trust on any
subsequent date(s) of deposit will be acquired in open market purchases on a
national securities exchange. All of the Securities will be deposited in the
Trust based on their market value as of the respective date(s) of deposit.
Risk Factors
Risk is inherent in all investing. Investing in a unit trust involves risk,
including the risk that you may receive little or no return on your investment
or even that you may lose part or all of your investment. Therefore, before
investing you should consider carefully the following risks that you assume
when you invest in this Trust. Because of these and other risks, the Trust
should only represent a portion of your overall portfolio and you should con-
sider an investment in the Trust to be a part of a longer term investment
strategy that will provide the best results when followed over a number of
years. There is no guarantee that the Trust will achieve its investment objec-
tive.
Market risk: the risk that the market value of a stock or the Trust may change
rapidly and unpredictably, causing the stock or the Trust to be worth less
than its original price. Volatility in the market price of the Securities in
the Trust changes the value of the Units of the Trust. Market value may be af-
fected by a variety of factors, including, among others, general stock market
movements, changes in the perceptions about the issuers, changes in interest
rates or inflation, or changes in the financial condition of the issuers of
the Securities. The equity markets tend to have periods of generally rising
prices and periods of generally falling prices and are currently at histori-
cally high levels. In addition, the market value of REITs and, as a result,
the Units, may be adversely affected by a variety of factors including:
changes in the real estate market, vacancy rates, competition, and interest
rates, as well as economic recession. Because the Trust is not managed, Secu-
rities in the Trust will generally not be sold in response to market fluctua-
tions. Accordingly, an investor in the Trust may
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be exposed to more market risk than an investor in certain managed investment
vehicles. In addition, the relative lack of diversity of Securities in the
Trust's portfolio may subject Unitholders to greater market risk than other
investment vehicles that have more diversified portfolios.
Inflation risk: the risk that the value of assets or income from investments
will be less in the future as inflation decreases the value of money. As in-
flation increases, the value of the Trust's assets can decline as can the
value of the Trust's distributions.
See "Risk Factors" in Part B of this Prospectus for an additional discussion
of potential risks.
Securities Selected for
the Trust
Distributions
INCOME AND CAPITAL DISTRIBUTIONS
Cash dividends received by the Trust will be paid each March 31, June 30, Sep-
tember 30 and December 31 ("Income Distribution Dates") to Unitholders of rec-
ord each March 15, June 15, September 15 and December 15 ("Income Record
Dates"), respectively. Distributions of funds in the Capital Account, if any,
will be made at least annually on December 31 of each year to Unitholders of
record on December 15, and in certain circumstances, earlier. Any distribution
of income and/or capital will be net of expenses of the Trust. Additionally,
upon termination of the Trust, the Trustee will distribute, upon surrender of
Units, to each remaining Unitholder his pro rata share of the Trust's assets,
less expenses, in the manner set forth under "Distributions To Unitholders" in
Part B of this Prospectus. Any Unitholder may elect to have each distribution
of income or capital on his Units, other than the final liquidating distribu-
tion, automatically reinvested in additional Units of the Trust without a
sales charge. See "Distributions to Unitholders" in Part B of this Prospectus.
Investing in the Trust
SALES CHARGES
No sales charge will be assessed on Units created on the Initial Date of De-
posit. For Units created after the Initial Date of Deposit, the maximum sales
charge will be % of the public offering price. Certain classes of investors
are entitled to purchase Units at reduced sale charges. See "Public Offering
Price" in Part B of this Prospectus.
DEALER CONCESSIONS
The Sponsor plans to allow a discount to dealer firms in connection with the
distribution of Units of 3% of the public offering price of the Units.
Nuveen reserves the right to change the amount of the concession or agency
commission from time to time. In addition, Nuveen has adopted a policy whereby
concessions or agency commissions paid to dealers or other selling agents will
be withheld or reversed if Units are tendered for redemption or sold within 90
days of the Initial Date of Deposit.
SPONSOR'S PROFITS
Nuveen may realize a profit (or sustain a loss) as of the opening of business
on the Initial Date of Deposit resulting from the difference between the pur-
chase prices of the Securities and the cost of such Securities to the Trust,
which is based on the evaluation of the Securities as of the opening of busi-
ness on the Initial Date of Deposit. (See Note (2) of "Schedule of Invest-
ments.") In addition, Nuveen will receive a gross sales commission on the sale
of Units created after the Initial Date of Deposit equal to % of the Public
Offering Price of the Units (equivalent to % of the net amount invested),
less any reduced sales charge as described under "Investing in the Trust--
Sales Charges" and "Public Offering Price" in Part B of the Prospectus. See
"Distribution of Units to the Public" in Part B of this Prospectus for infor-
mation regarding the receipt of additional concessions available to dealers.
Nuveen may also be considered to have realized a profit or to have sustained a
loss, as the case may be, in the amount of any difference between the cost of
the Securities to the Trust (which is based on the Evaluator's determination
of the aggregate price of the underlying Securities of the Trust) on the sub-
sequent date(s) of deposit and the cost of such Securities to
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Nuveen. By virtue of buying the Securities at below market prices during the
day on the Initial Date of Deposit, Nuveen will realize a profit on the de-
posit of the Securities on the Initial Date of Deposit of up to % of the
market value of the Securities less concessions due to dealers and other sell-
ing agents. BT Alex. Brown, the underwriter to the issuers of the Securities,
who also acts as a dealer of Units of the Trust, will realize a profit on the
sale of the Securities to Nuveen equal to the difference between the under-
writer's acquisition cost of such Securities and the sale price of the Securi-
ties to the Sponsor (expected to be up to % of the market value of the Secu-
rities). During the initial offering period, dealers and other selling agents
also may realize profits or sustain losses as a result of fluctuation after
the Initial Date of Deposit in the Public Offering Price received by the deal-
ers and other selling agents upon the sale of Units.
In maintaining a market for the Units, Nuveen will also realize profits or
sustain losses in the amount of any difference between the price at which
Units are purchased and the price at which Units are resold (which price in-
cludes a sales charge of %) or redeemed. The secondary market Public Offer-
ing Price of Units may be greater or less than the cost of such Units to the
Sponsor.
General Information
OPTIONAL FEATURES
REDEMPTIONS
Units may be redeemed on any business day at their current market value. See
"Redemption" in Part B of this Prospectus.
REINVESTMENT
Distributions from the Trust can be reinvested with no sales charge into
Nuveen mutual or money market funds. Also, income and certain capital distri-
butions from the Trust can be reinvested with no sales charge into additional
Units of the Trust. See "Distributions to Unitholders" and "Accumulation Plan"
in Part B of this Prospectus. In addition, unit trust purchases may be applied
toward breakpoint pricing discounts for Nuveen Mutual Funds. For more informa-
tion about Nuveen investment products, obtain a prospectus from your financial
adviser.
SECONDARY MARKET FOR UNITS
Although not obligated to do so, the Sponsor may maintain a market for Units
and offer to repurchase the Units at prices based on the aggregate value of
the Securities, plus or minus cash, if any, in the Capital and Income Accounts
of the Trust plus a sales charge as set forth above in "Investing in the
Trust--Sales Charge." If a secondary market is not maintained, a Unitholder
may still redeem his Units through the Trustee. See "Redemption" in Part B of
this Prospectus.
TERMINATION
Commencing up to nine business days prior to the Mandatory Termination Date,
the Securities will begin to be sold as prescribed by the Sponsor. The Trustee
will provide written notice of the termination to Unitholders which will spec-
ify when certificates may be surrendered. Unitholders not electing a distribu-
tion of shares will receive a cash distribution within a reasonable time after
the Trust's termination. See "Distributions to Unitholders" and "Other Infor-
mation--Termination of Indenture" in Part B of this Prospectus.
THE SPONSOR
Since our founding in 1898, John Nuveen & Co. Incorporated has been synonymous
with investments that withstand the test of time. Today, we offer a range of
equity and fixed-income unit trusts designed to suit the unique circumstances
and financial planning needs of mature investors. Nuveen, a leader in tax-ef-
ficient investing, believes that a carefully selected portfolio can play an
important role in building and sustaining the wealth of a lifetime. More than
1.3 million investors have trusted Nuveen to help them maintain the lifestyle
they currently enjoy.
The prospectus describes in detail the investment objectives, policies and
risks of the Trust. We invite you to discuss the contents with your financial
adviser, or you may call us at 800-257-8787 for additional information.
BT ALEX. BROWN
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NUVEEN REAL ESTATE OPPORTUNITY PORTFOLIO, JUNE 1998
(Nuveen Unit Trusts, Series 13)
Schedule of Investments at the Initial Date of Deposit, June , 1998
<TABLE>
<CAPTION>
NAME OF
ISSUER OF PERCENTAGE OF
SECURITIES AGGREGATE MARKET COST OF CURRENT
NUMBER OF (TICKER OFFERING VALUE PER SECURITIES TO DIVIDEND
SHARES SYMBOL)(1) PRICE SHARE TRUST(2) YIELD(3)
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<C> <S> <C> <C> <C> <C>
% $ $ $
-------- --- ---------- ------
100% $ $
======== === ========== ======
</TABLE>
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(1) All Securities are represented by regular way contracts to purchase such
Securities for the performance of which an irrevocable letter of credit
has been deposited with the Trustee. The contracts to purchase the
Securities were entered into by the Sponsor on , 1998.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the last sale prices of the listed Securities on the
business day preceding the Initial Date of Deposit). The valuation of the
Securities has been determined by the Trustee. The aggregate underlying
value of the Securities on the Initial Date of Deposit was $ . Cost
and gain or (loss) to Sponsor relating to the Securities sold to the Trust
were $ and $ , respectively.
(3) Current Dividend Yield for each Security was calculated by annualizing the
last quarterly or semi-annual ordinary dividend declared on that Security
and dividing the result by that Security's closing sale price on the
business day prior to the Initial Date of Deposit.
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NUVEEN REAL ESTATE OPPORTUNITY PORTFOLIO, JUNE 1998
(Nuveen Unit Trusts, Series 13)
Statement of Condition at the Initial Date of Deposit, June , 1998
<TABLE>
<S> <C>
TRUST PROPERTY
Investment in Equity Securities represented by purchase con-
tracts(1)(2)......................................................... $
Organizational and offering costs(3)..................................
------
Total........................................................... $
======
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued organizational and offering costs(3)........................ $
------
Total........................................................... $
======
INTEREST OF UNITHOLDERS:
Unit of fractional undivided interest outstanding ( ).......
Cost to investors(4)................................................ $
Less: Sales charge(5)............................................. (0.00)
------
Net amount applicable to investors.................................. $
======
Total........................................................... $
======
</TABLE>
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(1) Aggregate cost of Securities listed under "Schedule of Investments" is
based on their aggregate underlying value.
(2) An irrevocable letter of credit has been deposited with the Trustee as
collateral, which is sufficient to cover the monies necessary for the pur-
chase of the Securities pursuant to contracts for the purchase of such Se-
curities.
(3) The Trust (and therefore Unitholders) will bear all or a portion of its
estimated organizational and offering costs which will be amortized over
the life of the Trust. The estimated organizational and offering costs are
based upon an estimate that Units of the Trust will be is-
sued. To the extent the number of Units issued is larger or smaller, the
estimate will vary.
(4) Aggregate Public Offering Price computed as set forth under "Public Offer-
ing Price" in Part B of this Prospectus.
(5) There is no sales charge on Units purchased on the Initial Date of Depos-
it. For Units purchased after the Initial Date of Deposit, the aggregate
cost to investors includes a maximum sales charge of % of the Public
Offering Price assuming no reduction of sales charge as set forth above in
"Investing in the Trust--Sales Charge" or "Public Offering Price" in Part
B of this Prospectus.
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Report of Independent Public Accountants
To the Board of Directors of John Nuveen & Co. Incorporated and Unitholders of
Nuveen Unit Trusts, Series 13:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of
Nuveen Unit Trusts, Series 13 (Nuveen Real Estate Opportunity Portfolio, June
1998), as of June , 1998.
These financial statements are the responsibility of the Sponsor. Our respon-
sibility is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the financial statements. Our proce-
dures included confirmation of the irrevocable letter of credit arrangement
for the purchase of securities, described in Note (2) to the statement of con-
dition, by correspondence with the Trustee. An audit also includes assessing
the accounting principles used and significant estimates made by the Sponsor,
as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the schedule of investments at
date of deposit referred to above present fairly, in all material respects,
the financial position of Nuveen Unit Trusts, Series 13 (Nuveen Real Estate
Opportunity Portfolio, June 1998), as of June , 1998, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June , 1998.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 2, 1998
NUVEEN UNIT TRUSTS
NUVEEN REAL ESTATE OPPORTUNITY PORTFOLIO PROSPECTUS--
PART B
(GENERAL TERMS)
JUNE , 1998
This Part B of the Prospectus may not be distributed unless accompanied by
Part A. Both Parts of this Prospectus should be retained for future reference.
Further detail regarding certain of the information provided in the
Prospectus may be obtained within five business days of written or telephonic
request to the Trustee at 4 New York Plaza, New York, NY 10004-2413 or (800)
257-8787.
Currently offered at Public Offering Price plus accumulated dividends accrued
to the date of settlement. Minimum purchase--either $1,000 or 100 Units ($500
or nearest whole number of Units whose value is less than $500 for Education
IRA purchases), whichever is less.
THIS NUVEEN UNIT TRUST SERIES consists of the underlying separate unit
investment trusts set forth in the respective Part A to this Prospectus. Each
Trust initially consists of delivery statements relating to contracts to
purchase securities and, thereafter, will consist of a portfolio of common
stocks of companies described in the applicable Part A of the Prospectus (see
"Schedule of Investments" in Part A of the Prospectus). Except in specific
instances as noted in Part A of the Prospectus, the information contained in
this Part B shall apply to each Trust in its entirety. For a discussion of the
Sponsor's obligations in the event of a failure of any contract for the
purchase of any of the Securities and its limited right to substitute other
securities to replace any failed contract, see "Composition of Trust."
DIVIDEND AND CAPITAL DISTRIBUTIONS. Cash dividends received by the Trust will
be paid on those dates set forth under "Distributions" in Part A of the
Prospectus. Distributions of funds in the Capital Account will be made as set
forth under "Distributions" in Part A of the Prospectus, and in certain
circumstances, earlier. See "Distributions to Unitholders."
THE PUBLIC OFFERING PRICE per Unit of each Trust for Units created on the
Initial Date of Deposit is generally equal to a pro rata share of the aggregate
underlying value of the Securities in such Trust's portfolio (generally
determined by the closing sale prices of the listed Securities and the ask
prices of over-the-counter traded Securities) plus or minus cash, if any, in
the Income and Capital Accounts of the Trust, with no sales charge and is
rounded to the nearest cent. The Public Offering Price per Unit of each Trust
for Units created after the Initial Date of Deposit is generally equal to a pro
rata share of the aggregate underlying value of the Securities in the Trust's
portfolio (generally determined by the closing sale prices of the listed
Securities and the ask prices of over-the-counter traded Securities) plus or
minus cash, if any, in the Income and Capital Accounts, plus a sales charge as
set forth in Part A of the Prospectus and is rounded to the nearest cent. The
Secondary Market Public Offering Price per Unit for each Trust will generally
be equal to a pro rata share of the aggregate underlying value of the
Securities in such Trust (generally determined by the closing sale prices of
the listed Securities and the bid prices of over-the-counter traded Securities)
plus a sales charge as set forth in Part A of the Prospectus. A pro rata share
of accumulated dividends, if any, in the Income Account from the preceding
Record Date to, but not including, the settlement date (normally three business
days after purchase) is added to the Public Offering Price.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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A UNITHOLDER MAY REDEEM UNITS at the office of the Trustee at prices based
upon the aggregate underlying value of the Securities (generally determined by
the closing sale prices of listed Securities and the bid prices of over-the-
counter traded Securities). The price received upon redemption may be more or
less than the amount paid by Unitholders, depending upon the value of the
Securities on the date of tender for redemption. (See "Redemption.") The
Sponsor, although not required to do so, may make a secondary market for the
Units of the Trusts at prices based upon the aggregate underlying value of the
Securities in the respective Trust (generally determined by the closing sale
prices of listed Securities and the bid prices of over-the-counter traded
Securities). (See "Market for Units.")
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
NUVEEN UNIT TRUSTS......................................................... 4
COMPOSITION OF TRUSTS...................................................... 5
RISK FACTORS............................................................... 5
REIT MARKET FACTORS AND HISTORICAL INDEX PERFORMANCE....................... 9
PUBLIC OFFERING PRICE...................................................... 11
MARKET FOR UNITS........................................................... 12
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT.................... 13
TAX STATUS................................................................. 13
RETIREMENT PLANS........................................................... 16
TRUST OPERATING EXPENSES................................................... 17
DISTRIBUTIONS TO UNITHOLDERS............................................... 17
ACCUMULATION PLAN.......................................................... 18
REPORTS TO UNITHOLDERS..................................................... 19
UNIT VALUE AND EVALUATION.................................................. 19
DISTRIBUTIONS OF UNITS TO THE PUBLIC....................................... 20
OWNERSHIP AND TRANSFER OF UNITS............................................ 20
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES...................... 21
REDEMPTION................................................................. 21
PURCHASE OF UNITS BY THE SPONSOR........................................... 23
REMOVAL OF SECURITIES FROM THE TRUSTS...................................... 23
INFORMATION ABOUT THE TRUSTEE.............................................. 23
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE.......................... 24
SUCCESSOR TRUSTEES AND SPONSORS............................................ 24
INFORMATION ABOUT THE SPONSOR.............................................. 24
OTHER INFORMATION.......................................................... 25
LEGAL OPINION.............................................................. 26
AUDITORS................................................................... 26
SUPPLEMENTAL INFORMATION................................................... 26
</TABLE>
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<PAGE>
NUVEEN UNIT TRUSTS
This Nuveen Unit Trust is one of a series of separate but similar investment
companies created by the Sponsor, each of which is designated by a different
Series number. The underlying unit investment trusts contained in this Series
are combined under one Trust Indenture and Agreement. Specific information
regarding each Trust is set forth in Part A of this Prospectus. The various
Nuveen Unit Trusts are collectively referred to herein as the "Trusts." This
Series was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement dated the Initial Date of Deposit (the "Indenture")
between John Nuveen & Co. Incorporated ("Nuveen" or the "Sponsor") and The
Chase Manhattan Bank (the "Trustee").
The Sponsor has deposited with the Trustee delivery statements relating to
contracts for the purchase of common stocks of the companies described in the
applicable Part A of the Prospectus, together with funds represented by an
irrevocable letter of credit issued by a major commercial bank in the amount
required for their purchase (or the securities themselves) (the "Securities").
See "Schedule of Investments" in Part A of the Prospectus, for a description of
the Securities deposited in the Trust. See also, "Trust Strategies" and "Risk
Factors" in Part A of the Prospectus.
The Trustee has delivered to the Sponsor registered Units which represent
ownership of the entire Trust, and which are offered for sale by this
Prospectus. Each Unit of a Trust represents a fractional undivided interest in
the Securities deposited in such Trust in the ratio set forth in "Essential
Information" in Part A of this Prospectus. Units may only be sold in states in
which they are registered. To the extent that any Units of any Trust are
redeemed by the Trustee, the aggregate value of the Trust's assets will
decrease by the amount paid to the redeeming Unitholder, but the fractional
undivided interest of each unredeemed Unit in such Trust will increase
proportionately. The Sponsor will initially, and from time to time thereafter,
hold Units in connection with their offering.
Additional Units of a Trust may be issued from time to time following the
Initial Date of Deposit by depositing in such Trust additional Securities (or
contracts therefore backed by an irrevocable letter of credit or cash) or cash
(including a letter of credit) with instructions to purchase additional
Securities in the Trust. As additional Units are issued by a Trust as a result
of the deposit of additional Securities or cash by the Sponsor, the aggregate
value of the Securities in a Trust will be increased and the fractional
undivided interest in such Trust represented by each Unit will be decreased.
The Sponsor may continue to make additional deposits of Securities, or cash
with instructions to purchase additional Securities, into a Trust following the
Initial Date of Deposit, provided that such additional deposits will be in
amounts which will maintain, within reasonable parameters, the same original
proportionate relationship among the Securities in such Trust established on
the Initial Date of Deposit. Thus, although additional Units will be issued,
each Unit will continue to represent the same proportionate amount of each
Security. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities or cash being
deposited by the Sponsor, the fractional undivided interest in a Trust
represented by each unredeemed Unit will decrease or increase accordingly,
although the actual interest in such Trust represented by such fraction will
remain unchanged. If the Sponsor deposits cash, however, existing and new
investors may experience a dilution of their investment and a reduction in
their anticipated income because of fluctuations in the price of the Securities
between the time of the cash deposit and the purchase of the Securities and
because the Trust will pay the associated brokerage fees. To minimize this
effect, the Trust will try to purchase the Securities as close to the
evaluation time or as close to the evaluation price as possible. Units will
remain outstanding until redeemed upon tender to the Trustee by Unitholders,
which may include the Sponsor, or until termination of the Trust Agreement.
The Sponsor may realize a profit (or sustain a loss on the Initial Date of
Deposit resulting from the difference between the purchase prices of the
Securities and the cost of such Securities to the Trust, which is based on the
evaluation of the Securities as of the opening of business on the Initial Date
of
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<PAGE>
Deposit. (See "Schedule of Investments" in Part A of the Prospectus.) The
Sponsor may also be considered to have realized a profit or to have sustained
a loss, as the case may be, in the amount of any difference between the cost
of the Securities to the Trust (which is based on the Evaluator's
determination of the aggregate value of the underlying Securities of the
Trust) on the subsequent date(s) of deposit and the cost of such Securities to
Nuveen, if applicable.
COMPOSITION OF TRUSTS
Each Trust initially consists of delivery statements relating to contracts
to purchase Securities (or of such Securities) as are listed under "Schedule
of Investments" in Part A of this Prospectus and, thereafter, of such
Securities as may continue to be held from time to time (including certain
securities deposited in the Trust to create additional Units or in
substitution for Securities not delivered to a Trust.)
Limited Replacement of Certain Securities. Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
Security. In the event of a failure to deliver any Security that has been
purchased for a Trust under a contract, including those Securities purchased
on a when, as and if issued basis ("Failed Securities"), the Sponsor is
authorized under the Indenture to direct the Trustee to acquire other
specified Securities ("Replacement Securities") to make up the original corpus
of the Trust within 20 days after delivery of notice of the failed contract
and the cost to the Trust may not exceed the amount of funds reserved for the
purchase of the Failed Securities.
If the right of limited substitution described in the preceding paragraph is
not utilized to acquire Replacement Securities in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such Failed
Securities to all Unitholders of the Trust and the Trustee will distribute the
principal attributable to such Failed Securities not more than 120 days after
the date on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unitholders should be aware that, at the time of receipt of such principal,
they may not be able to reinvest such proceeds in other securities with
equivalent growth potential at a comparable price.
The Indenture also authorizes the Sponsor to increase the size of the Trust
and the number of Units thereof by the deposit of additional Securities in the
Trust or cash (including a letter of credit) with instructions to purchase
additional Securities in the Trust and the issuance of a corresponding number
of additional Units. If the Sponsor deposits cash, however, existing and new
investors may experience a dilution of their investment and a reduction in
their anticipated income because of fluctuations in the prices of the
Securities between the time of the cash deposit and the purchase of the
Securities and because the Trust will pay the associated brokerage fees.
Sale of Securities. Certain of the Securities may from time to time under
certain circumstances be sold. The proceeds from such events will be used to
pay for Units redeemed or distributed to Unitholders and not reinvested;
accordingly, no assurance can be given that a Trust will retain for any length
of time its present size and composition.
Litigation. To the best knowledge of the Sponsor, there is no litigation
pending as of the Initial Date of Deposit in respect of any Securities which
might reasonably be expected to have a material adverse effect on any of the
Trusts. It is possible that after the Initial Date of Deposit, litigation may
be initiated with respect to Securities in any Trust. The Sponsor is unable to
predict whether any such litigation may be instituted, or if instituted,
whether such litigation might have a material adverse effect on the Trusts.
RISK FACTORS
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that the
financial condition of the issuers of the Securities or the general conditions
of the common stock market may worsen and the value of the Securities and
B-5
<PAGE>
therefore the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases of value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common stocks
have rights to receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trust(s) have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. The value of common stocks is subject to
market fluctuations for as long as the common stocks remain outstanding, and
thus the value of the Securities in a Trust may be expected to fluctuate over
the life of a Trust to values higher or lower than those prevailing on the
Initial Date of Deposit.
Holders of common stock incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Unitholders will be unable to dispose of any of the Securities in a Trust,
as such, and will not be able to vote the Securities. As the holder of the
Securities, the Trustee will have the right to vote all of the voting stocks
in a Trust and will vote such stocks in accordance with the instructions of
the Sponsor.
The value of the Securities will fluctuate over a life of a Trust and may be
more or less than the value at the time they were deposited in such Trust. The
Securities may appreciate or depreciate in value (or pay dividends) depending
on the full range of economic and market influences affecting these
Securities, including the impact of the Sponsor's purchase and sale of
Securities (especially during the primary offering period of Units of a Trust)
and other factors.
Whether or not the Securities are listed on a securities exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the
Securities may depend on whether dealers will make a market in the Securities.
There can be no assurance that a market will be made for any of the
Securities, that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling Securities to
the Sponsor. The price at which the Securities may be sold to meet redemptions
and the value of a Trust will be adversely affected if trading markets for the
Securities are limited or absent. There can be no assurance that a Trust will
achieve its investment objective.
Real Estate Investment Trusts. An investment in the Trust should be made
with an understanding of the risks inherent in an investment in REITs
specifically and in real estate generally (in addition to securities market
risks). The underlying value of the Securities and the Trust's ability to make
distributions to Unitholders may be adversely affected by changes in the
national, state and local economic climate and real estate conditions (such as
oversupply of or reduced demand for space,
B-6
<PAGE>
changes in market rental rates or declining property values), increasing values
and reduced supply of desirable properties for acquisition, perceptions of
prospective tenants of the safety, convenience and attractiveness of the
properties, the ability of the owner to provide adequate management,
maintenance and insurance, the ability to collect on a timely basis all rents
from tenants, tenant defaults, the cost of complying with the Americans with
Disabilities Act, rising inflation rates, increased competition from other
properties, obsolescence of properties, changes in the availability, cost and
terms of mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real estate
tax rates and other operating expenses, regulatory and economic impediments to
raising rents, adverse changes in governmental rules and fiscal policies,
dependency on management skills, civil unrest, acts of God, including
earthquakes and other natural disasters (which may result in uninsured losses),
acts of war, adverse changes in zoning laws, and other factors which are beyond
the control of the issuers of the REITs in the Trust.
The value of the REITs may at times be particularly sensitive to devaluation
in the event of rising interest rates. Equity REITs are less likely to be
affected by interest rate fluctuations than mortgage REITs and the nature of
the underlying assets of an equity REIT may be considered more tangible than
that of a mortgage REIT. Equity REITs are more likely to be adversely affected
by changes in the value of the underlying properties they own, or are
acquiring, than mortgage REITs.
REITs may concentrate investments in specific geographic areas or in specific
property types, i.e., hotels, shopping malls, residential complexes and office
buildings. The impact of economic conditions on REITs can also be expected to
vary with geographic location and property type. Investors should be aware that
the REITs may not be diversified and are subject to the risks of financing
projects. REITs are also subject to defaults by borrowers, self-liquidation,
the market's perception of the REIT industry generally, and the possibility of
failing to qualify for pass-through of income under the Internal Revenue Code,
and to maintain exemption from the Investment Company Act of 1940. A default by
a borrower or lessee may cause the REIT to experience delays in enforcing its
right as mortgagee or lessor and to incur significant costs related to
protecting its investments. In addition, because real estate generally is
subject to real property taxes, the REITs in the Trust may be adversely
affected by increases or decreases in property tax rates and assessments or
reassessments of the properties underlying the REITs by taxing authorities.
Furthermore, because real estate is relatively illiquid, the ability of REITs
to vary their portfolios in response to changes in economic and other
conditions may be limited and may adversely affect the value of the Units.
There can be no assurance that any REIT will be able to dispose of its
underlying real estate assets when advantageous or necessary. In an effort to
reduce the impact of the risks discussed above, the Sponsor has selected REITs
that are diversified among various real estate sectors and geographic
locations.
REITs generally maintain comprehensive insurance on presently owned and
subsequently acquired real property assets, including liability, fire and
extended coverage. However, certain types of losses may be uninsurable or not
be economically insurable as to which the underlying properties are at risk in
their particular locales. There can be no assurance that insurance coverage
will be sufficient to pay the full current market value or current replacement
cost of any lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by a REIT
might not be adequate to restore its economic position with respect to such
property.
Under various environmental laws, a current or previous owner or operator of
real property may be liable for the costs of removal or remediation of
hazardous or toxic substances on, under or in such property. Such laws often
impose liability whether or not the owner or operator caused or knew of the
presence of such hazardous or toxic substances and whether or not the storage
of such substances was in violation of a tenant's lease. In addition, the
presence of hazardous or toxic substances, or the failure to remediate such
property properly, may adversely affect the owner's ability to borrow using
such real
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<PAGE>
property as collateral. No assurance can be given that one or more of the
REITs in the Trust may not be presently liable or potentially liable for any
such costs in connection with real estate assets they presently own or
subsequently acquire while such REITs are held in the Trust.
The Clinton Administration's proposed budget for fiscal year 1999 includes
four proposals affecting REITs. These proposals, if enacted, would place
additional restrictions on the structure of certain REITs, limit a REIT's
permissible investments, and effect the taxation of "built-in gains." The
Sponsor is unable to predict whether such proposals or future proposals will
be enacted or what impact such proposals or future proposals, if any, will
have on the Securities included in the Trust.
Unitholders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. As the holder
of the Securities, the Trustee will have the right to vote all of the voting
stocks in the Trust and will vote such stocks in accordance with the
instructions of the Sponsor.
BT Alex. Brown Incorporated ("BT Alex. Brown") has acted as sole underwriter
to the issuers of the Securities in the acquisition of the Securities at
prices below market value for deposit in the Trust on the Initial Date of
Deposit and may acquire the Securities for the Sponsor in open market
transactions on subsequent date(s) of deposit and thereby may benefit. BT
Alex. Brown, in its general securities business, acts as agent or principal in
connection with the purchase and sale of equity securities, including the
Securities in the Trust, and may act as a market maker in certain of the
Securities. BT Alex. Brown also from time to time may issue reports on and
make recommendations relating to equity securities, which may include the
Securities, and may provide investment banking services to the issuers of the
Securities.
The criteria for inclusion in the Trust were applied to the Securities
immediately prior to the Initial Date of Deposit. Since the Sponsor may
deposit additional Securities, the Sponsor may continue to sell Units of the
Trust even though the dividend income or the capital appreciation potential of
the Securities may have changed and would no longer justify inclusion in the
Trust. In addition, the Sponsor will continue to sell Units of the Trust even
if BT Alex. Brown changes a recommendation relating to a Security.
Investors should also note that BT Alex. Brown, in its independent capacity
as a broker/dealer and as an investment advisor to individuals, mutual funds,
employee benefit plans or other institutions and persons, may distribute
information concerning the Securities which comprise the portfolio to various
individuals and entities and may, from time to time, recommend to or effect on
behalf of such individuals, entities or others, the purchase or sale of one or
more of the Securities which are included in the portfolio. This may have an
effect on the prices of the Securities which is adverse to the interest of the
purchasers of Units of the Trust. Additionally, this may have an impact on the
price paid by the Trust for the Securities as well as the price received upon
redemption of the Units or upon the termination of the Trust.
Year 2000 Problem. Like other investment companies, financial and business
organizations and individuals around the world, a Trust could be adversely
affected if the computer systems used by the Sponsor or Trustee or other
service providers to such Trust do not properly process and calculate date-
related information and data from and after January 1, 2000. This is commonly
known as the "Year 2000 Problem." The Sponsor and Trustee are taking steps
that they believe are reasonably designed to address the Year 2000 Problem
with respect to computer systems that they use and to obtain reasonable
assurances that comparable steps are being taken by a Trust's other service
providers. At this time, however, there can be no assurance that these steps
will be sufficient to avoid any adverse impact to a Trust.
The Year 2000 Problem is expected to impact corporations and other parties,
which may include issuers of the Securities contained in a Trust, to varying
degrees based upon various factors, including, but not limited to, their
industry sector and degree of technological sophistication. The Sponsor is
unable
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to predict what impact, if any, the Year 2000 Problem will have on issuers of
the Securities contained in a Trust.
Legislation. At any time after the Initial Date of Deposit, legislation may
be enacted, with respect to the Securities in a Trust or the issuers of the
Securities. Changing approaches to regulation, particularly with respect to the
environment, may have a negative impact on certain companies represented in a
Trust. There can be no assurance that future legislation, regulation or
deregulation will not have a material adverse effect on a Trust or will not
impair the ability of the issuers of the Securities to achieve their business
goals.
REIT MARKET FACTORS AND HISTORICAL INDEX PERFORMANCE
Over the five year period ended in 1997, the total market capitalization of
REITs grew from approximately $16 billion to nearly $141 billion according to
the National Association of Real Estate Investment Trusts ("NAREIT"), which
still represents only a portion of the U.S. commercial real estate market.
However, the Sponsor believes real estate tends to be under-represented in many
investors' portfolios. Recently, the Real Estate Investment Trust
Simplification Act of 1997 was enacted and is generally thought to ease
restrictions on REITs to allow for greater efficiency and competitiveness. In
addition, the Sponsor believes that a strong economy has the potential to
create opportunities in the real estate market. In most of the nation's
property markets, demand exceeds prerecession peaks. Record low vacancy rates
in suburban office markets cause some observers to believe the suburbs are at
full capacity. That may spell opportunity for developers. Historically high
lease rate increases--coupled with low costs--should place companies in the
industry in a good position for future success. As indicated on the graph
provided below, over the period from December 31, 1972 through March 31, 1998,
a $10,000 investment in REITs (as measured by the NAREIT-Equity Index) would
have grown to $279,663 while a similar investment in Dow Jones Industrial
Average ("DJIA") stocks and the S&P 500 Index would have grown to $221,469, and
$215,209 respectively. The NAREIT-Equity Index is a market capitalization
weighted index comprised of 182 REITs, as of March 31, 1998, with 75% or
greater of their gross assets invested in equity ownership of real estate. The
average annual total returns of the NAREIT-Equity Index for the most recent 1,
3, 5, 10, 20 and 25 years ended December 31, 1997, were 20.3%, 23.6%, 18.7%,
15.1%, 16.8% and 15.5%. The average annual total returns of the S&P 500 Index
for the most recent 1, 3, 5, 10, 20 and 25 years ended December 31, 1997, were
33.4%, 31.3%, 21.0%, 18.9%, 17.4% and 14.4%. The average annual total returns
of the DJIA for the most recent 1, 3, 5, 10, 20 and 25 years ended December 31,
1997 were 24.9%, 30.3%, 22.6%, 19.2%, 17.3% and 14.5%.
REITs have historically offered attractive growth potential with moderated
risk. Specifically, over the last 25 years, REITs have generated attractive
returns while tending to experience smaller losses than the S&P 500 Index
during significant stock market declines. From December 31, 1972 to December
31, 1997, the NAREIT-Equity Index demonstrated only 88.2% and 87.2% of the
volatility of the S&P 500 Index and DJIA, respectively. In addition, real
estate investments have historically served as a hedge against inflation,
because real estate values and lease rates tend to escalate in line with
inflation. Equity REITs, which invest in real estate, have historically served
as valuable protection against inflation. The Trust portfolio is much less
diversified than the NAREIT-Equity Index and will have investment results that
differ from these indices.
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The following table compares the average annual total returns of the NAREIT-
Equity Index, S&P 500 Index and the DJIA from December 31, 1972 through
December 31, 1997. The average annual total returns and the cumulative total
returns of the NAREIT-Equity Index, S&P 500 Index and the DJIA over that time
period were 15.5% and 2797%, 14.4% and 2152%, and 14.5% and 2215%,
respectively.
ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
NAREIT-
S&P 500 EQUITY
INDEX INDEX DJIA
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<S> <C> <C> <C>
12/31/72..........................................
12/31/73.......................................... -14.66% -15.52% -13.29%
12/31/74.......................................... -26.47% -21.40% -23.73%
12/31/75.......................................... 37.20% 19.30% 44.87%
12/31/76.......................................... 23.84% 47.59% 22.93%
12/31/77.......................................... -7.18% 22.42% -12.84%
12/31/78.......................................... 6.56% 10.34% 2.81%
12/31/79.......................................... 18.44% 35.86% 10.68%
12/31/80.......................................... 32.42% 24.37% 22.13%
12/31/81.......................................... -4.91% 6.00% -3.65%
12/31/82.......................................... 21.41% 21.60% 27.20%
12/31/83.......................................... 22.51% 30.64% 26.05%
12/31/84.......................................... 6.27% 20.93% 1.35%
12/31/85.......................................... 32.16% 19.10% 33.62%
12/31/86.......................................... 18.47% 19.16% 27.25%
12/31/87.......................................... 5.23% -3.64% 5.55%
12/31/88.......................................... 16.81% 13.49% 16.21%
12/31/89.......................................... 31.49% 8.84% 32.24%
12/31/90.......................................... -3.17% -15.35% -0.54%
12/31/91.......................................... 30.55% 35.70% 24.25%
12/31/92.......................................... 7.67% 14.59% 7.40%
12/31/93.......................................... 9.99% 19.65% 16.97%
12/31/94.......................................... 1.31% 3.17% 5.02%
12/31/95.......................................... 37.43% 15.27% 36.94%
12/31/96.......................................... 23.07% 35.26% 28.91%
12/31/97.......................................... 33.36% 20.29% 24.91%
</TABLE>
B-10
<PAGE>
The following graph compares growth of a hypothetical $10,000 investment in
the NAREIT-Equity Index, the S&P 500 Index and the DJIA over the period
December 31, 1972 through March 31, 1998.
The graph which appears here demonstrates that a hypothetical $10,000
investment in the NAREIT-Equity Index, DJIA and S&P 500 Index beginning in
December 31, 1972 would have grown to $279,663, $215,209 and $221,469,
respectively, by March 31, 1998.
25 YEAR RETURN COMPARISON
Graph Appears Here
The past performance of the equity REITs set forth above is not
representative of the expected performance of the Trust, which contains a
significantly less diversified portfolio of REITS. In addition, past
performance is not indicative of future results. This illustration does not
represent the actual performance of any investment product. These unmanaged
indices assume reinvestment of dividends and income but do not include
brokerage commissions or other fees. The NAREIT-Equity Index, S&P 500 Index and
Dow Jones Industrial Average are the property of the National Association of
Real Estate Investment Trusts, Standard & Poor's Corporation and Dow Jones &
Company, Inc., respectively, which are not affiliated with the Sponsor and have
not participated in any way in the creation of the Trust or the selection of
the portfolio, and have not approved any information contained herein. Trust
performance will likely differ from past and future NAREIT-Equity Index returns
because of a variety of reasons, such as the Trust will contain a less
diversified portfolio of REITs and is subject to sales charges, fees and
expenses. The investment return and principal value of the Trust will fluctuate
with changes in market conditions. There can be no assurance that the Trust
will provide a positive return or outperform the indices over its life. The
returns for any period may be negative. An investment in equity REITs provides
only commercial real estate industry exposure which is characterized by a lack
of relative diversification as compared to an investment in all of the common
stocks which comprise a stock index.
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is based on the aggregate underlying
value of the Securities in the Trust (generally determined by the closing sale
prices of listed Securities and the ask prices of over-the-counter traded
Securities), plus or minus cash, if any, in the Income and Capital Accounts of
the Trust, plus an initial sales charge equal to the difference between the
maximum sales charge as set forth in Part A of the Prospectus per Unit, if
applicable, and is rounded to the nearest cent. See "Unit Value and
Evaluation." For Units created on the Initial Date of Deposit no sales charge
will apply. A pro rata share of accumulated dividends, if any, in the Income
Account from the preceding Record Date to,
B-11
<PAGE>
but not including, the settlement date (normally three business days after
purchase) is added to the Public Offering Price.
For "secondary market" sales the Public Offering Price per Unit of each Trust
is determined by adding to the Trustee's determination of the aggregate value
of each Security in the Trust (generally determined by the closing sale prices
of listed Securities and the bid prices of over-the-counter traded Securities)
a sales charge as set forth in Part A of this Prospectus. See "Unit Value and
Evaluation."
Pursuant to the terms of the Indenture, the Trustee may terminate a Trust if
the net asset value of such Trust, as shown by any evaluation, is less than 20%
of the total value of the Securities deposited in the Trust during the primary
offering period of the Trust.
At all times while Units are being offered for sale, the Sponsor will
appraise or cause to be appraised daily the value of the underlying Securities
in each Trust as of 4:00 p.m. eastern time, or as of any earlier closing time
on a day on which the New York Stock Exchange (the "Exchange") is scheduled in
advance to close at such earlier time and will adjust the Public Offering Price
of the Units commensurate with such appraisal ("Evaluation Time"). Such Public
Offering Price will be effective for all orders received by a dealer or the
Sponsor at or prior to 4:00 p.m. eastern time on each such day or as of any
earlier closing time on a day on which the Exchange is scheduled in advance to
close at such earlier time. Orders received after that time, or on a day when
the Exchange is closed for a scheduled holiday or weekend will be held until
the next determination of price.
Whether or not Units are being offered for sale, the Sponsor will determine
or cause to be determined the aggregate value of each Trust as of 4:00 p.m.
eastern time: (i) on each June 30 or December 31 (or, if such date is not a
business day, the last business day prior thereto), (ii) on any day on which a
Unit is tendered for redemption (or the next succeeding business day if the
date of tender is a non-business day) and (iii) at such other times as may be
necessary. For this purpose, a "business day" shall be any day on which the
Exchange is normally open. (See "Unit Value and Evaluation.")
MARKET FOR UNITS
During the initial public offering period, the Sponsor intends to offer to
purchase Units of each Trust at a price based upon the pro rata share per Unit
of the aggregate underlying value of the Securities in such Trust (generally
determined by the closing sale prices of listed Securities and the ask prices
of over-the-counter traded Securities). Afterward, although it is not obligated
to do so, the Sponsor may maintain a secondary market for Units of each Trust
at its own expense and continuously offer to purchase Units of each Trust at
prices, subject to change at any time, which are based upon the aggregate
underlying value of the Securities in a Trust (generally determined by the
closing sale prices of listed Securities and the bid prices of over-the-counter
traded Securities). Unitholders who wish to dispose of their Units should
inquire of the Trustee or their broker as to the current Redemption Price. In
connection with its secondary market making activities, the Sponsor may from
time to time enter into secondary market joint account agreements with other
brokers and dealers. Pursuant to such an agreement, the Sponsor will generally
purchase Units from the broker or dealer at the Redemption Price (as defined in
"Redemption") and will place the Units into a joint account managed by the
Sponsor; sales from the account will be made in accordance with the then
current prospectus and the Sponsor and the broker or dealer will share profits
and losses in the joint account in accordance with the terms of their joint
account agreement.
In maintaining a market for the Units, the Sponsor will realize profits or
sustain losses in the amount of any difference between the price at which Units
are purchased and the price at which Units are resold or redeemed. The
secondary market Public Offering Price of Units may be greater or less than the
cost of such Units to the Sponsor.
B-12
<PAGE>
Certificates, if any, for Units are delivered to the purchaser as promptly
after the date of settlement (three business days after purchase) as the
Trustee can complete the mechanics of registration, normally within 48 hours
after registration instructions are received. Purchasers of Units to whom
Certificates are issued will be unable to exercise any right of redemption
until they have received their Certificates, properly endorsed for transfer.
(See "Redemption.")
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT
The prices at which the Securities deposited in the Trusts would have been
offered to the public on the business day prior to the Initial Date of Deposit
were determined by the Trustee.
The amount by which the Trustee's determination of the aggregate value of the
Securities deposited in the Trusts was greater or less than the cost of such
Securities to the Sponsor was profit or loss to the Sponsor. (See Part A of
this Prospectus.) The Sponsor also may realize further profit or sustain
further loss as a result of fluctuations in the Public Offering Price of the
Units. Cash, if any, made available to the Sponsor prior to the settlement date
for a purchase of Units, or prior to the acquisition of all Portfolio
securities by a Trust, may be available for use in the Sponsor's business, and
may be of benefit to the Sponsor.
TAX STATUS
The following is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary is limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986 (the "Code"). Unitholders should consult
their tax advisers in determining the Federal, state, local and any other tax
consequences of the purchase, ownership and disposition of Units in a Trust.
For purposes of the following discussion and opinions, it is assumed that each
Security is considered a share in a REIT for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for Federal
income tax purposes; each Unitholder will be treated as the owner of a pro
rata portion of each of the assets of the Trust under the Code; and the
income of the Trust will be treated as income of the Unitholders thereof
under the Code. Each Unitholder will be considered to have received his pro
rata share of income derived from the Trust asset when such income is
considered to be received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, taxable exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder. The
price a Unitholder pays for his or her Units is allocated among his or her
pro rata portion of each Security held by the Trust (in proportion to the
fair market values thereof on the valuation date nearest the date the
Unitholder purchases his or her Units) in order to determine his or her tax
basis for his or her pro rata portion of each Security held by the Trust.
Unitholders should consult their own tax advisors with regard to the
calculation of basis. For Federal income tax purposes, a Unitholder's pro
rata portion of dividends (other than capital gains dividends of a REIT, as
described below), as defined by Section 316 of the Code, paid with respect
to a Security held by the Trust is taxable as ordinary income to the extent
of such corporation's current and accumulated "earnings and profits." A
Unitholder's pro rata portion of dividends paid on such Security which
exceeds such current and accumulated earnings and profits will first reduce
a Unitholder's tax basis in such Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Security shall generally
be treated as capital gain. In general, the holding period for such capital
gain will be determined by the period of time a Unitholder has held his or
her Units. The issuers of the Securities intend to qualify under special
Federal income tax rules as "real
B-13
<PAGE>
estate investment trusts" (each a "REIT," shares of such issuers held by
the Trust shall be referred to collectively as the "REIT Shares"). Because
Unitholders are deemed to directly own a pro rata portion of the REIT
Shares as discussed above, Unitholders are advised to consult their tax
advisers for information relating to the tax consequences of owning the
REIT Shares. Provided an issuer qualifies as a REIT, certain distributions
by such issuers on the REIT Shares may qualify as "capital gain dividends,"
taxable to shareholders (and, accordingly, to the Unitholders as owners of
a pro rata portion of the REIT Shares) as long-term capital gains,
regardless of how long a shareholders has owned such shares. In addition,
distributions of income or capital gains declared on REIT Shares in
October, November or December will be deemed to have been paid to
shareholders (and, accordingly, to Unitholders as owners of a pro rata
portion of the REIT Shares) on December 31 of the year they are declared,
even when paid by a REIT during the following January and received by
shareholders or Unitholders in such following year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust, will generally be
considered a capital gain (except in the case of a dealer or a financial
institution). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust,
will generally be considered a capital loss (except in the case of a dealer
or a financial institution) Unitholders should consult their tax advisors
regarding the recognition of such capital gains and losses for Federal
income tax purposes as special rules described below apply to a
Unitholder's pro rata portion of REIT Shares.
Dividends Received Deduction. Dividends received on the Securities (as long
as such Securities qualify as REIT shares) are not eligible for the corporate
dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as if the expense had been paid directly by
such Unitholder. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible
by an individual only to the extent they exceed 2% of such individual's
adjusted gross income. Unitholder's may be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions subject to this
limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. However, any loss realized by a Unitholder with
respect to the disposition of his or her pro rata portion of the REIT Shares,
to the extend such Unitholder has owned his or her Units for less than six
months or the Trust has held the REIT Shares for less than six months, will be
treated as long-term capital loss to the extent of such Unitholder's pro rata
portion of any capital gain dividends received (or deemed to have been
received) with respect to the REIT Shares. The Taxpayer Relief Act of 1997
(the "1997 Act") provides that for taxpayers other than corporations, net
capital gain (which is defined as net long-term capital gain over net short-
term capital loss for the taxable year) is subject to a maximum marginal
stated tax rate of either 28%, 25% or 20%, depending upon the holding periods
of the capital assets and on whether the gain is "unrecaptured Section 1250
gain." Capital loss is long-term if the holding period for the asset is more
than one year, and is short-term if the holding period for the asset is one
year or less. Generally, capital gains realized from assets held for more than
one year but not more than 18 months are taxed at a maximum marginal stated
tax rate of 28% and capital gains realized from assets (with certain
exclusions) held for more than 18 months are taxed at a maximum marginal
stated tax rate of 20% (10% in the case of certain taxpayers in the lowest tax
bracket). Capital gain realized from assets held more than 18 months that is
considered unrecaptured Section 1250 gain is taxed at a maximum marginal
stated tax rate of 25%. Further, capital gains realized from assets held for
one year or less are taxed at the same rates as ordinary income. Legislation
is currently pending that provides the appropriate methodology that should be
applied in netting the realized capital gains and losses. Such legislation is
proposed to be effective retroactively for
B-14
<PAGE>
tax years ending after May 6, 1997. Note, however, that the 1997 Act provides
that the application of the rules described above in the case of pass-through
entities such as the REITs will be prescribed in future Treasury Regulations.
The Internal Revenue Service has released preliminary guidance which provides
that, in general, pass-through entities such as REITs may designate their
capital gain dividends as either a 20% rate gain distribution, an unrecaptured
Section 1250 gain distribution or a 28% rate gain distribution depending on the
nature of the gain received by the pass-through entity. Accordingly,
Unitholders should consult their own tax advisers as to the tax rate applicable
to capital gain dividends.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If the Unitholder disposes of a Unit, the Unitholder is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of the Trust
including his or her pro rata portion of all the Securities represented by the
Unit. The 1997 Act includes provisions that treat certain transactions designed
to reduce or eliminate risk of loss and opportunities for gain (e.g., short
sales, off-setting notional principal contracts, futures or forward contracts
or similar transactions) as constructive sales for purposes of recognition of
gain (but not loss) and for purposes of determining the holding period.
Unitholders should consult their own tax advisors with regard to any such
constructive sales rules.
Special Tax Consequences of In-Kind Distributions Upon Termination of a
Trust. As discussed under "Redemption," under certain circumstances a
Unitholder may request an In-Kind Distribution upon the termination of a Trust.
As previously discussed, prior to the termination of a Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust's assets for
Federal income tax purposes. The receipt of an In-Kind Distribution will result
in a Unitholder receiving an undivided interest in whole shares of stock plus,
possibly, cash.
The potential tax consequences that may occur under an In-Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to
Securities. A "Security" for this purpose is a particular class of stock issued
by a particular REIT. A Unitholder will not recognize gain or loss if a
Unitholder only receives Securities in exchange for his or her pro rata portion
in the Securities held by the Trust. However, if a Unitholder also receives
cash in exchange for a fractional share of a Security held by the Trust, such
Unitholder will generally recognize gain or loss based upon the difference
between the amount of cash received by the Unitholder and his or her tax basis
in such fractional share of a Security held by the Trust.
Because the Trust will own many Securities, a Unitholder who requests an In-
Kind Distribution will have to analyze the tax consequences with respect to
each Security owned by the Trust. If a Unitholder is deemed to recognize gain
or loss on the In-Kind Distribution because cash is received in addition to
Securities, the amount of taxable gain (or loss) recognized upon such exchange
will generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unitholder with respect to each Security owned by the
Trust. Unitholders who request an In-Kind Distribution are advised to consult
their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax
basis in his or her Units will generally equal the price paid by such
Unitholder for his or her Units. The cost of the Units is allocated among the
Securities held by the Trust in accordance with the proportion of the fair
market values of such Securities on the valuation date nearest the date the
Units are purchased in order to determine such Unitholder's tax basis for his
or her pro rata portion of each Security.
B-15
<PAGE>
A Unitholder's tax basis in his or her Units and his or her pro rata portion
of a Security held by the Trust will be reduced to the extent dividends paid
with respect to such Security are received by the Trust which are not taxable
as ordinary income and are not capital gain dividends as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States persons. Such persons should consult their tax
advisers.
At the termination of the Trust, the Trustee will furnish to each Unitholder
a statement containing information relating to the dividends received by the
Trust on the Securities, the gross proceeds received by the Trust from the
disposition of any Security (resulting from redemption or the sale of any
Security) and the fees and expenses paid by the Trust. The Trustee will also
furnish annual information returns to Unitholders and the Internal Revenue
Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established. See "Retirement Plans."
Unitholders will be notified annually of the amount of dividends includable
in the Unitholder's gross income and amounts of Trust expenses which may be
claimed as itemized deductions.
The foregoing discussion relates only to United States federal income
taxation of U.S. Unitholders; Unitholders may be subject to state and local
taxation. Unitholders should consult their tax advisers regarding potential
foreign, state and local taxation with respect to the Units, and foreign
investors should consult their tax advisers with respect to United States tax
consequences of ownership of Units.
Investment in the Trust is available for purchase by funds and accounts of
individual investors that are exempt from Federal income taxes such as
Individual Retirement Accounts, Roth Individual Retirement Accounts, Education
Individual Retirement Accounts, Keogh Plans, pension funds and other tax-
deferred retirement plans.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the Trusts
for New York tax matters, under the existing income tax laws of the State of
New York, each Trust is not an association taxable as a corporation and the
income of each Trust will be treated as the income of the Unitholders thereof.
RETIREMENT PLANS
Units of the Trusts may be well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement plans.
Generally the Federal income tax relating to capital gains and income received
in each of the foregoing plans is deferred until distributions are received.
Distributions from such plans are generally treated as ordinary income but
may, in some cases, be eligible for special 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.
B-16
<PAGE>
TRUST OPERATING EXPENSES
No annual advisory fee is charged to the Trusts by the Sponsor. The Sponsor
and/or its affiliates do, however, receive an annual fee as set forth in
"Expense Information" in Part A of the Prospectus for maintaining surveillance
over the portfolio and for performing certain administrative services for the
Trust (the "Sponsor's Supervisory Fee"). Estimated annual Trust expenses are as
set forth in Part A of this Prospectus; if actual expenses are higher than the
estimate, the excess will be borne by the Trust. The estimated expenses do not
include the brokerage commissions payable by the Trust in purchasing and
selling Securities.
The Trustee receives for ordinary recurring services an annual fee for each
Trust as set forth in "Expense Information" appearing in Part A of this
Prospectus. The Trustee's Fee may be periodically adjusted in response to
fluctuations in short-term interest rates (reflecting the cost to the Trustee
of advancing funds to a Trust to meet scheduled distributions). In addition,
both the Sponsor's Supervisory Fee and the Trustee's Fee may be adjusted in
accordance with the cumulative percentage increase of the United States
Department of Labor's Consumer Price Index entitled "All Services Less Rent of
Shelter" since the establishment of the Trusts. The Trustee has the use of
funds, if any, being held in the Income and Capital Accounts of each Trust for
future distributions, payment of expenses and redemptions. These Accounts are
non-interest bearing to Unitholders. Pursuant to normal banking procedures, the
Trustee benefits from the use of funds held therein. Part of the Trustee's
compensation for its services to the Trusts is expected to result from such use
of these funds.
All or a portion of the expenses incurred in establishing the Trusts,
including costs of preparing the registration statement, the trust indenture
and other closing documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio, the initial
evaluation, legal fees, the initial fees and expenses of the Trustee, and any
other non-material out-of-pocket expenses, will be amortized and paid by a
Trust. The following are additional expenses of the Trusts and, when paid by or
are owed to the Trustee, are secured by a lien on the assets of the Trust or
Trusts to which such expenses are allocable: (1) the expenses and costs of any
action undertaken by the Trustee to protect the Trusts and the rights and
interests of the Unitholders; (2) all taxes and other governmental charges upon
the Securities or any part of the Trusts (no such taxes or charges are being
levied or made or, to the knowledge of the Sponsor, contemplated); (3) amounts
payable to the Trustee as fees for ordinary recurring services and for
extraordinary non-recurring services rendered pursuant to the Indenture, all
disbursements and expenses, including counsel fees (including fees of counsel
which the Trustee may retain) sustained or incurred by the Trustee in
connection therewith; and (4) any losses or liabilities accruing to the Trustee
without negligence, bad faith or willful misconduct on its part. The Trustee is
empowered to sell Securities in order to pay these amounts if funds are not
otherwise available in the applicable Income and Capital Accounts.
DISTRIBUTIONS TO UNITHOLDERS
The Trustee will distribute any net income received with respect to any of
the Securities in a Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Date. See "Distributions"
in Part A of this Prospectus. Persons who purchase Units will commence
receiving distributions only after such person becomes a Record Owner.
Notification to the Trustee of the transfer of Units is the responsibility of
the purchaser, but in the normal course of business such notice is provided by
the selling broker/dealer. Proceeds received on the sale of any Securities in a
Trust, to the extent not used to meet redemptions of Units or pay expenses will
be distributed on the last day of each month if the amount available for
distribution equals at least $1.00 per 100 Units ("Capital Distribution Dates")
to Unitholders of record on the fifteenth day of each applicable month
("Capital Record Dates") and December 31 of each year to Unitholders of record
on December 15. The Trustee is not required to pay interest on funds held in
the Capital Account of a Trust (but may itself
B-17
<PAGE>
earn interest thereon and therefore benefit from the use of such funds). A
Unitholder's pro rata portion of the Capital Account, less expenses, will be
distributed as part of the final liquidation distribution.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by a
Trust if the Trustee has not been furnished the Unitholder's tax
identification number in the manner required by such regulations. Any amount
so withheld is transmitted to the Internal Revenue Service and may be
recovered by the Unitholder under certain circumstances by contacting the
Trustee, otherwise the amount may be recoverable only when filing a tax
return. Under normal circumstances the Trustee obtains the Unitholder's tax
identification number from the selling broker. However, a Unitholder should
examine his or her statements from the Trustee to make sure that the Trustee
has been provided a certified tax identification number in order to avoid this
possible "back-up withholding." In the event the Trustee has not been
previously provided such number, one should be provided as soon as possible.
Within a reasonable time after a Trust is terminated, each Unitholder will,
upon surrender of his Units for redemption, receive (i) the pro rata share of
the amounts realized upon the disposition of Securities, unless he or she
elects an In-Kind Distribution as described under "Redemption" and (ii) a pro
rata share of any other assets of such Trust, less expenses of such Trust.
The Trustee will credit to the Income Account of a Trust any dividends
received on the Securities therein. All other receipts (e.g., return of
capital, etc.) are credited to the Capital Account of a Trust.
The Trustee may establish reserves (the "Reserve Account") within a Trust
for state and local taxes, if any, and any governmental charges payable out of
such Trust.
Distribution Reinvestment. Any Unitholder may elect to have each
distribution of income on his Units, other than the final liquidating
distribution in connection with the termination of a Trust, automatically
reinvested in additional Units of such Trust. Each person who purchases Units
of a Trust may elect to participate in the reinvestment option by notifying
the Trustee in writing of their election. Reinvestment may not be available in
all states. Notification to the Trustee must be received within 10 days prior
to the Record Date for such distributions. Each subsequent distribution of
income and/or capital, as selected by the Unitholder, will be automatically
applied by the Trustee to purchase additional Units of a Trust. No sales
charge will be assessed on Units acquired pursuant to reinvestment. It should
be remembered that even if distributions are reinvested, they are still
treated as distributions for income tax purposes.
ACCUMULATION PLAN
The Sponsor is also the principal underwriter of several open-end mutual
funds (the "Accumulation Funds") into which Unitholders may choose to reinvest
Trust distributions. Unitholders may elect to reinvest income and capital
distributions automatically, without any sales charge. Each Accumulation Fund
has investment objectives which differ in certain respects from those of the
Trusts and may invest in securities which would not be eligible for deposit in
the Trusts. Further information concerning the Accumulation Plan and a list of
Accumulation Funds is set forth in the Information Supplement of this
Prospectus, which may be obtained by contacting the Trustee at the phone
number listed on the back cover of this Prospectus.
Participants may at any time, by so notifying the Trustee in writing, elect
to change the Accumulation Fund into which their distributions are being
reinvested, to change from capital only reinvestment to reinvestment of both
capital and income or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units
in cash. Such notice will be effective as of the next Record Date occurring at
least 10 days after the Trustee's receipt of the notice. There will be no
charge or other penalty for such change of election or termination. The
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character of Trust distributions for income tax purposes will remain unchanged
even if they are reinvested in an Accumulation Fund.
REPORTS TO UNITHOLDERS
The Trustee shall furnish Unitholders of a Trust in connection with each
distribution, a statement of the amount of income, if any, and the amount of
other receipts (received since the preceding distribution) being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit of a Trust outstanding. Within a reasonable period of time after the
end of each calendar year, the Trustee shall furnish to each person, who at any
time during the calendar year was a registered Unitholder of a Trust, a
statement with respect to such Trust that provides (1) a summary of
transactions in the Trust for such year; (2) any Security sold during the year
and the Securities held at the end of such year by the Trust; (3) the
redemption price per Unit based upon a computation thereof on the 31st day of
December of such year (or the last business day prior thereto); and (4) amounts
of income and capital distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust.
UNIT VALUE AND EVALUATION
The value of the Trust is determined by the Trustee on the basis of (1) the
cash on hand in the Trust other than cash deposited in the Trust to purchase
Securities not applied to the purchase of such Securities; (2) the aggregate
value of the Securities held in the Trust, as determined by the Evaluator on
the basis of the aggregate underlying value of the Securities in the Trust next
computed; (3) dividends receivable on the Securities trading ex-dividend as of
the date of computation; (4) amounts representing organizational expenses paid
from the Trust less amounts representing accrued organizational expenses of the
Trust; and (5) all other assets of the Trust; and deducting therefrom: (1)
amounts representing any applicable taxes or governmental charges and amounts
due the Sponsor or Trustee for indemnification or extraordinary expenses
payable out of such Trust for which no deductions had been made for the purpose
of additions to the Reserve Account; (2) any amounts owing to the Trustee for
its advances; (3) an amount representing estimated accrued expenses of the
Trust, including, but not limited to, unpaid fees and expenses of the Trustee
(including legal fees) and the Sponsor; (4) cash held for distribution to
Unitholders of record of the Trust or for redemption of tendered Units as of
the business day prior to the evaluation being made; and (5) other liabilities
incurred by the Trust. The result of such computation is divided by the number
of Units of such Trust outstanding as of the date thereof and rounded to the
nearest cent to determine the per Unit value ("Unit Value") of such Trust. The
Trustee may determine the aggregate value of the Securities in the Trust in the
following manner: if the Securities are listed on a securities exchange or the
NASDAQ National Market System ("listed Securities"), this evaluation is
generally based on the closing sale price on that exchange or that system (if
the listed Securities are listed on the New York Stock Exchange ("NYSE") the
closing sale price on the NYSE shall apply) or, if there is no closing sale
price on that exchange or system, at the closing bid prices (ask prices for
primary market purchases). If the Securities are not so listed or, the
evaluation shall generally be based on the current bid prices (ask prices for
primary market purchases) on the over-the-counter market (unless these prices
are inappropriate as a basis for valuation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of current
bid prices for comparable securities, (b) by appraising the value of the
Securities on the bid side of the market or (c) by any combination of the
above.
With respect to any Security not listed on a national exchange or the NASDAQ
National Market System, or, with respect to a Security so listed but the
Trustee deems the last reported sale price on the relevant exchange to be
inappropriate as a basis for valuation, upon the Trustee's request, the Sponsor
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shall, from time to time, designate one or more evaluation services or other
sources of information on which the Trustee shall be authorized conclusively to
rely in evaluating such Security, and the Trustee shall have no liability for
any errors in the information so received. The cost thereof shall be an expense
reimbursable to the Trustee from the Income and Capital Accounts.
DISTRIBUTIONS OF UNITS TO THE PUBLIC
Nuveen, in addition to being the Sponsor, is the sole Underwriter of the
Units. It is the intention of the Sponsor to qualify Units of the Trusts for
sale under the laws of substantially all of the states of the United States of
America.
Promptly following the deposit of Securities in exchange for Units of the
Trusts, it is the practice of the Sponsor to place all of the Units as
collateral for a letter or letters of credit from one or more commercial banks
under an agreement to release such Units from time to time as needed for
distribution. Under such an arrangement the Sponsor pays such banks
compensation based on the then current interest rate. This is a normal
warehousing arrangement during the period of distribution of the Units to
public investors. To facilitate the handling of transactions, sales of Units
shall be limited to transactions involving a minimum of either $1,000 or 100
Units ($500 or nearest whole number of Units whose value is less than $500 for
Education IRA purchases), whichever is less. The Sponsor reserves the right to
reject, in whole or in part, any order for the purchase of Units.
The Sponsor plans to allow a discount to brokers and dealers in connection
with the distribution of Units. The amounts of such discounts are set forth in
Part A of this Prospectus.
The Sponsor may maintain a secondary market for Units of each Trust. See
"Market for Units."
The Sponsor reserves the right to change the amount of the dealer concessions
set forth in Part A of this Prospectus from time to time.
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts shown in Part
A of the Prospectus as under "Dealer Concessions." The Glass-Steagall Act
prohibits banks from underwriting Trust Units; the Act does, however, permit
certain agency transactions and banking regulators have not indicated that
these particular agency transactions are not permitted under the Act. In Texas
and in certain other states, any bank making Units available must be registered
as a broker-dealer under state law.
OWNERSHIP AND TRANSFER OF UNITS
The ownership of Units is evidenced by registered Certificates unless the
Unitholder expressly requests that ownership be evidenced by a book entry
position recorded on the books and records of the Trustee. The Trustee is
authorized to treat as the owner of Units that person who at the time is
registered as such on the books of the Trustee. Any Unitholder who holds a
Certificate may change to book entry ownership by submitting to the Trustee the
Certificate along with a written request that the Units represented by such
Certificate be held in book entry form. Likewise, a Unitholder who holds Units
in book entry form may obtain a Certificate for such Units by written request
to the Trustee. Units may be held in denominations of one Unit or any multiple
or fraction thereof. Fractions of Units are computed to three decimal places.
Any Certificates issued will be numbered serially for identification, and are
issued in fully registered form, transferable only on the books of the Trustee.
Book entry Unitholders will receive a Book Entry Position Confirmation
reflecting their ownership.
Units are transferable by making a written request to the Trustee and, in the
case of Units evidenced by Certificate(s), by presenting and surrendering such
Certificate(s) to the Trustee, at its address listed
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on the back cover of this Part B of the Prospectus, properly endorsed or
accompanied by a written instrument or instruments of transfer. The
Certificate(s) should be sent registered or certified mail for the protection
of the Unitholders. Each Unitholder must sign such written request, and such
Certificate(s) or transfer instrument, exactly as his name appears on (a) the
face of the Certificate(s) representing the Units to be transferred, or (b) the
Book Entry Position Confirmation(s) relating to the Units to be transferred.
Such signature(s) must be guaranteed by a guarantor acceptable to the Trustee.
In certain instances the Trustee may require additional documents such as, but
not limited to, trust instruments, certificates of death, appointments as
executor or administrator or certificates of corporate authority. Mutilated
Certificates must be surrendered to the Trustee in order for a replacement
Certificate to be issued. Although at the date hereof no charge is made and
none is contemplated, a Unitholder may be required to pay $2.00 to the Trustee
for each Certificate reissued or transfer of Units requested and to pay any
governmental charge which may be imposed in connection therewith.
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES
To obtain a new Certificate replacing one that has been lost, stolen, or
destroyed, the Unitholder must furnish the Trustee with sufficient
indemnification and pay such expenses as the Trustee may incur. This
indemnification must be in the form of an Open Penalty Bond of Indemnification.
The premium for such an indemnity bond may vary, but currently amounts to 1% of
the market value of the Units represented by the Certificate. In the case
however, of a Trust as to which notice of termination has been given, the
premium currently amounts to 0.5% of the market value of the Units represented
by such Certificate.
REDEMPTION
Unitholders may redeem all or a portion of their Units by (1) making a
written request for such redemption (book entry Unitholders may use the
redemption form on the reverse side of their Book Entry Position Confirmation)
to the Trustee at its address listed on the back cover of this Part B of the
Prospectus (redemptions of 1,000 Units or more will require a signature
guarantee), (2) in the case of Units evidenced by a Certificate, by also
tendering such Certificate to the Trustee, duly endorsed or accompanied by
proper instruments of transfer with signatures guaranteed as explained above,
or provide satisfactory indemnity required in connection with lost, stolen or
destroyed Certificates and (3) payment of applicable governmental charges, if
any. Certificates should be sent only by registered or certified mail to
minimize the possibility of their being lost or stolen. (See "Ownership and
Transfer of Units.") No redemption fee will be charged. A Unitholder may
authorize the Trustee to honor telephone instructions for the redemption of
Units held in book entry form. Units represented by Certificates may not be
redeemed by telephone. The proceeds of Units redeemed by telephone will be sent
by check either to the Unitholder at the address specified on his account or to
a financial institution specified by the Unitholder for credit to the account
of the Unitholder. A Unitholder wishing to use this method of redemption must
complete a Telephone Redemption Authorization Form and furnish the Form to the
Trustee. Telephone Redemption Authorization Forms can be obtained from a
Unitholder's registered representative or by calling the Trustee. Once the
completed Form is on file, the Trustee will honor telephone redemption requests
by any authorized person. The time a telephone redemption request is received
determines the "date of tender" as discussed below. The redemption proceeds
will be mailed within three business days following the telephone redemption
request. Only Units held in the name of individuals may be redeemed by
telephone; accounts registered in broker name, or accounts of corporations or
fiduciaries (including among others, trustees, guardians, executors and
administrators) may not use the telephone redemption privilege.
On the third business day following the date of tender, the Unitholder will
be entitled to receive in cash for each Unit tendered an amount equal to the
Unit Value of such Trust determined by the Trustee, as of 4:00 p.m. eastern
time, or as of any earlier closing time on a day on which the Exchange is
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scheduled in advance to close at such earlier time, on the date of tender as
defined hereafter ("Redemption Price"). The price received upon redemption may
be more or less than the amount paid by the Unitholder depending on the value
of the Securities on the date of tender. Unitholders should check with the
Trustee or their broker to determine the Redemption Price before tendering
Units.
The "date of tender" is deemed to be the date on which the request for
redemption of Units is received in proper form by the Trustee, except that a
redemption request received after 4:00 p.m. eastern time, or as of any earlier
closing time on a day on which the Exchange is scheduled in advance to close at
such earlier time, or on any day on which the Exchange is normally closed, the
date of tender is the next day on which such Exchange is normally open for
trading and such request will be deemed to have been made on such day and the
redemption will be effected at the Redemption Price computed on that day.
Any Unitholder tendering 2,500 Units or more for redemption may request by
written notice submitted at the time of tender from the Trustee, in lieu of a
cash redemption, a distribution of shares of Securities in an amount and value
of Securities per Unit equal to the Redemption Price Per Unit, as determined as
of the evaluation next following tender. In-kind distributions ("In-Kind
Distributions") shall be made by the Trustee through the distribution of each
of the Securities in book-entry form to the account of the Unitholder's bank or
broker/dealer at the Depository Trust Company. An In-Kind Distribution will be
reduced by customary transfer and registration charges. The tendering
Unitholder will receive his pro rata number of whole shares of each of the
Securities comprising a portfolio and cash from the Capital Account equal to
the fractional shares to which the tendering Unitholder is entitled. The
Trustee may adjust the number of shares of any issue of Securities included in
a Unitholder's In-Kind Distribution to facilitate the distribution of whole
shares, such adjustment to be made on the basis of the value of Securities on
the date of tender. If funds in the Capital Account are insufficient to cover
the required cash distribution to the tendering Unitholder, the Trustee may
sell Securities in the manner described below.
Under regulations issued by the Internal Revenue Service, the Trustee may be
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. For further
information regarding this withholding, see "Distributions to Unitholders." In
the event the Trustee has not been previously provided such number, one must be
provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn from
the Income Account of a Trust to the extent that funds are available for such
purpose, or from the Capital Account. All other amounts paid on redemption
shall be withdrawn from the Capital Account.
The Trustee is empowered to sell Securities of a Trust in order to make funds
available for redemption. To the extent that Securities are sold, the size and
diversity of the Trust will be reduced. Such sales may be required at a time
when Securities would not otherwise be sold and might result in lower prices
than might otherwise be realized.
The Redemption Price per Unit during the secondary market will be determined
on the basis of the Unit Value of the Trust. See "UNIT VALUE AND EVALUATION"
for a more detailed discussion of the factors included in determining Unit
Value.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or during which the Securities and Exchange
Commission determines that trading on the New York Stock Exchange is restricted
or any 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
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Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unitholders to redeem
their Units. The Trustee is not liable to any person in any way for any loss or
damage which may result from any such suspension or postponement.
PURCHASE OF UNITS BY THE SPONSOR
The Trustee will notify the Sponsor of any tender of Units for redemption. If
the Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price it may purchase such Units by notifying the Trustee before the
close of business on the second succeeding business day and by making payment
therefor to the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee. (See "Redemption.") The Sponsor's
current practice is to bid at the Redemption Price in the secondary market.
Units held by the Sponsor may be tendered to the Trustee for redemption as any
other Units.
REMOVAL OF SECURITIES FROM THE TRUSTS
The portfolio of the Trust is not "managed" by the Sponsor or the Trustee;
their activities described herein are governed solely by the provisions of the
Indenture. The Indenture provides that the Sponsor may (but need not) direct
the Trustee to dispose of a Security in the event that an issuer defaults in
the payment of a dividend that has been declared, that any action or proceeding
has been instituted restraining the payment of dividends or there exists any
legal question or impediment affecting such Security, that the issuer of the
Security has breached a covenant which would affect the payments of dividends,
the credit standing of the issuer or otherwise impair the sound investment
character of the Security, that the issuer has defaulted on the payment on any
other of its outstanding obligations, that the price of the Security declined
to such an extent or other such credit factors exist so that in the opinion of
the Sponsor, the retention of such Securities would be detrimental to a Trust.
Except as stated in this Prospectus, the acquisition by a Trust of any
securities or other property other than the Securities is prohibited. Pursuant
to the Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Securities such as those
acquired in connection with a merger or other transaction. If offered such new
or exchanged securities or properties, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless acquired by a
Trust, they may be accepted for deposit in a Trust and either sold by the
Trustee or held in a Trust pursuant to the direction of the Sponsor. Proceeds
from the sale of Securities by the Trustee are credited to the Capital Account
of a Trust for distribution to Unitholders or to meet redemptions.
The Trustee may also sell Securities designated by the Sponsor, or if not so
directed, in its own discretion, for the purpose of redeeming Units of a Trust
tendered for redemption and the payment of expenses.
The Sponsor, in designating Securities to be sold by the Trustee, will
generally make selections in order to maintain, to the extent practicable, the
proportionate relationship among the number of shares of individual issues of
Securities. To the extent this is not practicable, the composition and
diversity of the Securities may be altered. In order to obtain the best price
for a Trust, it may be necessary for the Sponsor to specify minimum amounts
(generally 100 shares) in which blocks of Securities are to be sold.
INFORMATION ABOUT THE TRUSTEE
The Trustee and its address are stated on the back cover of this Part B of
the Prospectus. The Trustee is subject to supervision and examination by the
Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and either the Comptroller of the Currency or state banking
authorities.
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LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from any action in good faith pursuant to
the Indenture, or for errors in judgment, but shall be liable only for their
own negligence, lack of good faith or willful misconduct. The Trustee shall not
be liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Securities. In the event of the failure of the Sponsor to
act under the Indenture, the Trustee may act thereunder and shall not be liable
for any action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Indenture or upon or in respect of any Trust which
the Trustee may be required to pay under any present or future law of the
United States of America or of any other taxing authority having jurisdiction.
In addition, the Indenture contains other customary provisions limiting the
liability of the Trustee.
SUCCESSOR TRUSTEES AND SPONSORS
The Trustee or any successor trustee may resign by executing an instrument of
resignation in writing and filing same with the Sponsor and mailing a copy of a
notice of resignation to all Unitholders then of record. Upon receiving such
notice, the Sponsor is required to promptly appoint a successor trustee. If the
Trustee becomes incapable of acting or is adjudged a bankrupt or insolvent, or
a receiver or other public officer shall take charge of its property or
affairs, the Sponsor may remove the Trustee and appoint a successor by written
instrument. The resignation or removal of a trustee and the appointment of a
successor trustee shall become effective only when the successor trustee
accepts its appointment as such. Any successor trustee shall be a corporation
authorized to exercise corporate trust powers, having capital, surplus and
undivided profits of not less than $5,000,000. Any corporation into which a
trustee may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which a trustee shall be a party,
shall be the successor trustee.
If upon resignation of a trustee no successor has been appointed and has
accepted the appointment within 30 days after notification, the retiring
trustee may apply to a court of competent jurisdiction for the appointment of a
successor.
If the Sponsor fails to undertake any of its duties under the Indenture, and
no express provision is made for action by the Trustee in such event, the
Trustee may, in addition to its other powers under the Indenture (1) appoint a
successor sponsor or (2) terminate the Indenture and liquidate the Trusts.
INFORMATION ABOUT THE SPONSOR
Since our founding in 1898, Nuveen has been synonymous with investments that
withstand the test of time. Today, we offer a broad range of investments
designed for mature investors whose portfolio is the principal source of their
ongoing financial security. More than 1.3 million investors have entrusted
Nuveen to help them maintain the lifestyle they currently enjoy.
A value investing approach--purchasing securities of strong companies and
communities that represent good long-term value--is the cornerstone of Nuveen's
investment philosophy. It is a careful, disciplined, long-term strategy that
offers the potential for consistent, attractive returns with moderated risk.
Successful value investing begins with in-depth research and a discerning eye
for marketplace opportunity. Nuveen's team of investment professionals is
backed by the discipline, resources and expertise of a century of investment
experience, including one of the most recognized research departments in the
industry. Nuveen's research department has a long history of uncovering high
quality, under-valued securities.
To meet the unique circumstances and financial planning needs of mature
investors, Nuveen offers a wide array of taxable and tax-free investment
products--including equity and fixed-income mutual
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funds, unit trusts, exchange-traded funds, customized asset management services
and cash management products.
Nuveen is a subsidiary of The John Nuveen Company which, in turn, is
approximately 78% owned by the St. Paul Companies, Inc. ("St. Paul"). St. Paul
is located in St. Paul, Minnesota and is principally engaged in providing
property-liability insurance through subsidiaries. Nuveen is a member of the
National Association of Securities Dealers, Inc. and the Securities Industry
Association and has its principal offices located in Chicago (333 West Wacker
Drive). Nuveen maintains eight regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trusts to reach their investment goals, the Sponsor may
advertise and create specific investment programs and systems. For example,
such activities may include presenting information on how to use an investment
in the Trust, alone or in combination with an investment in other mutual funds
or unit investment trusts sponsored by Nuveen, to accumulate assets for future
education needs or periodic payments such as insurance premiums. The Sponsor
may produce software or additional sales literature to promote the advantages
of using the Trusts to meet these and other specific investor needs.
OTHER INFORMATION
Amendment of Indenture
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders (1) to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent, or (2)
to make such other provisions as shall not adversely affect the Unitholders,
provided, however, that the Indenture may not be amended, without the consent
of 100% of the Unitholders, to permit the deposit or acquisition of securities
either in addition to, or in substitution for any of the Securities initially
deposited in any Trust except as stated in "Composition of Trusts" regarding
the creation of additional Units and the limited right of substitution of
Replacement Securities, except for the substitution of refunding securities
under certain circumstances or except as otherwise provided in this Prospectus.
The Trustee shall advise the Unitholders of any amendment requiring the consent
of Unitholders, or upon request of the Sponsor, promptly after execution
thereof.
Termination of Indenture
The Trust may be liquidated at any time by an instrument executed by the
Sponsor and consented to by 66 2/3% of the Units of the Trust then outstanding.
The Trust may also be liquidated by the Trustee when the value of such Trust,
as shown by any evaluation, is less than 20% of the total value of the
Securities deposited in the Trust as of the conclusion of the primary offering
period and may be liquidated by the Trustee in the event that Units not yet
sold aggregating more than 60% of the Units originally created are tendered for
redemption by the Sponsor. The sale of Securities from the Trust upon
termination may result in realization of a lesser amount than might otherwise
be realized if such sale were not required at such time. For this reason, among
others, the amount realized by a Unitholder upon termination may be less than
the amount of Securities originally represented by the Units held by such
Unitholder. The Indenture will terminate upon the redemption, sale or other
disposition of the last Security held thereunder, but in no event shall it
continue beyond the Mandatory Termination Date set forth under "Essential
Information" in Part A of this Prospectus.
Commencing up to nine business days prior to the Mandatory Termination Date,
Securities will begin to be sold in connection with the termination of the
Trust. The Sponsor will determine the manner, timing and execution of the sale
of the Securities. Written notice of the termination of a Trust specifying the
time or times at which Unitholders may surrender their certificates for
cancellation shall be given by the Trustee to each Unitholder at his address
appearing on the registration books of such Trust maintained by the Trustee.
Unitholders not electing a distribution of shares of Securities will
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receive a cash distribution from the sale of the remaining Securities within a
reasonable time after the Trust is terminated. Regardless of the distribution
involved, the Trustee will deduct from the funds of a Trust any accrued costs,
expenses, advances or indemnities provided by the Indenture, including
estimated compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or other
governmental charges. Trustee will then distribute to each Unitholder his pro
rata share of the balance of the Income and Capital Accounts.
LEGAL OPINION
The legality of the Units offered hereby has been passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603. Carter, Ledyard &
Milburn, 2 Wall Street, New York, New York 10005, has acted as counsel for the
Trustee with respect to the Series.
AUDITORS
The "Statement of Condition" and "Schedule of Investments" at the Initial
Date of Deposit included in Part A of this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report in Part A of this Prospectus, and are included herein in reliance upon
the authority of said firm as experts in giving said report.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee, investors will receive at
no cost to the investor supplemental information about this Trust, which has
been filed with the Securities and Exchange Commission and is intended to
supplement information contained in Part A and Part B of this Prospectus. This
supplement includes additional general information about the Sponsor and the
Trusts.
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NUVEEN UNIT TRUSTS
NUVEEN REAL ESTATE OPPORTUNITY PORTFOLIO
PROSPECTUS--PART B
JUNE , 1998
Sponsor John Nuveen & Co. Incorporated 333
West Wacker Drive Chicago, IL
60606-1286
Trustee The Chase Manhattan Bank 4 New
York Plaza New York, NY 10004-2413
Telephone: 800-257-8787
Legal Counsel to Sponsor Chapman and Cutler 111 West Monroe
Street Chicago, IL 60603
Independent Public Accountants for Arthur Andersen LLP 33 West Monroe
the Trust Street Chicago, IL 60603
Except as to statements made herein furnished by the Trustee, the Trustee
has assumed no responsibility for the accuracy, adequacy and completeness of
the information contained in this Prospectus.
When Units of the Trusts are no longer available, or for investors who will
reinvest into subsequent series of the Trusts, this Prospectus may be used as
a preliminary prospectus for a future series; in which case investors should
note the following:
Information contained herein is subject to amendment. A registration
statement relating to securities of a future series has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective.
The Prospectus shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of these securities in any State
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, and to which reference is made.
No person is authorized to give any information or to make representations
not contained in this Prospectus or in supplemental information or sales
literature prepared by the Sponsor, and any information or representation not
contained therein must not be relied upon as having been authorized by either
the Trusts, the Trustee or the Sponsor. 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. The
Trusts are registered as Unit Investment Trusts under the Investment Company
Act of 1940, as amended. Such registration does not imply that the Trusts or
any of their Units have been guaranteed, sponsored, recommended or approved by
the United States or any State or agency or officer thereof.
