AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 1998
REGISTRATION NO. 333-52683
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO THE
REGISTRATION STATEMENT
ON
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT
INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST: DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
B. NAME OF DEPOSITOR: DELAWARE CAPITAL MANAGEMENT, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
DELWARE CAPITAL MANAGEMENT, INC.
One Commerce Square
Philadelphia, Pennsylvania 19103
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
George M. Chamberlain, Jr. MARK J. KNEEDY
Delaware Capital Management, Inc. 111 West Monroe Street
Philadelphia, Pennsylvania 19103 Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title and amount of Proposed maximum Amount of
securities being registered aggregate offering registration fee
price
<S> <C> <C> <C>
Delaware Investments Tax-Exempt An indefinite number of Indefinite $0.00
Trust, Series 15 Units of Beneficial Interest
pursuant to Rule 24f-2 under
the Investment Company Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration
Statement.
/ X :/ Check box if it is proposed that this filing will become effective on
- ----- May 19, 1998 at 2:00 P.M. pursuant to Rule 487.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
----------------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C> <C>
1. (a) Name of Trust } Prospectus front cover
2. (b) Title of securities issued............................................. } Summary of Essential
} Information
3. Name and address of each depositor.......................................... } Trust Administration
4. Name and address of Trustee................................................. } Trust Administration
5. State of organization of Trust.............................................. } The Fund
6. Execution and termination of Trust agreement................................ } Trust Administration
7. Changes of name............................................................. } The Fund; Trust Administration
8. Fiscal year................................................................. } *
9. Litigation.................................................................. } *
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a) Registered of bearer securities....................................... } Rights of Unitholders
(b) Cumulative or distributive securities................................. } Rights of Unitsholders; The
} Fund
(c) Redemption............................................................ } Rights of Unitholders
(d) Conversion, transfer, etc............................................. } Rights of Unitholders
(e) Periodic payment plan................................................. } *
(f) Voting rights......................................................... } Rights of Unitholders
(g) Notice of Unitholders................................................. } Trust Administration
(h) Consents required..................................................... } Rights of Unitholders; Trust
} Administration
(i) Other provisions...................................................... } Tax Status; Insurance on the
Bonds
11. Type of securities comprising units........................................ } The Fund; The State Trusts
12. Certain information regarding periodic payment } *
certificates }
<PAGE>
13. (a) Load, fees, expenses, etc............................................. } Estimated Current Return and
} Estimated Long-Term
} Return; Trust Operating
Expenses
(b) Certain information regarding periodic payment
certificates........................................................ } *
(c) Certain percentages................................................... } Summary of Essential
Information; Public Offering;
Insurance on the Bonds
(d) Certain other fees, etc. payable by holders........................... } Rights of Unitholders
(e) Certain profits receivable by depositor,
principal, underwriters, writers, Trustee or }
affiliated person.............................................. } Trust Operating Expenses;
} Public Offering
(f) Ratio of annual charges to income..................................... } *
} The Fund
14. Issuance of Trust's securities............................................. } Rights of Unitholders
15. Receipt and handling of payments from purchasers........................... } *
16. Acquisition and disposition of underlying } The Fund; Investment Objectives
securities............................................................ } and Portfolio Selection; Trust
} Administration; Public
} Offering
17. Withdrawal or redemption................................................... } Rights of Unitholders; Public
} Offering
18. (a) Receipt, custody and disposition of income............................ } Rights of Unitholders
(b) Reinvestment of distributions......................................... } Rights of Unitholders
(c) Reserves or special Trusts............................................ } Trust Operating Expenses
(d) Schedule of distributions............................................. } *
19. Records, accounts and reports.............................................. } Rights of Unitholders; Trust
} Administration
20. Certain miscellaneous provisions of Trust agreement
(a) Amendment............................................................. } Trust Administration
(b) Termination........................................................... } *
(c) and (d) Trustee, removal and successor................................ } Trust Administration
(e) and (f) Depositor, removal and successor............................... } Trust Administration
21. Loans to security holders } *
22. Limitations on liability................................................... } Trust Administration
23. Bonding arrangements....................................................... } *
24. Other material provisions of Trust agreement............................... } *
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor.................................................. } Trust Administration
<PAGE>
26. Fees received by depositor................................................. } See Items 13(a) and 13(e)
27. Business of depositor...................................................... } Trust Administration
28. Certain information as to officials and
affiliated persons of depositor....................................... } Trust Administration
29. Voting securities of depositor............................................. } *
30. Persons controlling depositor.............................................. } *
31. Payment by depositor for certain services
rendered to Trust..................................................... } *
32. Payment by depositor for certain other services rendered to Trust.......... } *
33. Remuneration of employees of depositor
for certain services rendered to Trust................................ } *
34. Remuneration of other persons for certain
services rendered to Trust............................................ } *
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of Trust's securities by states............................... } Public Offering
36. Suspension of sales of Trust's securities.................................. } *
37. Revocation of authority to distribute...................................... } *
38. (a) Method of Distribution................................................ } Public Offering
(b) Underwriting Agreements............................................... } Underwriting
(c) Selling Agreements.................................................... } Public Offering
39. (a) Organization of principal underwriters................................ } Trust Administration
(b) N.A.S.D. membership of principal underwriters......................... } *
40. Certain fees received by principal underwriters............................ } See Items 13(a) and 13(e)
41. (a) Business of principal underwriters.................................... } Trust Administration
(b) Branch offices of principal underwriters.............................. } *
(c) Salesmen of principal underwriters.................................... } *
42. Ownership of Trust's securities by certain persons......................... } *
43. Certain brokerage commissions received by
principal underwriters................................................ } Public Offering
44. (a) Method of valuation................................................... } Public Offering
(b) Schedule as to offering price......................................... } *
(c) Variation in offering price to certain persons........................ } Public Offering
45. Suspension of redemption rights............................................ } Rights of Unitholders
46. (a) Redemption valuation.................................................. } Public Offering
(b) Schedule as to redemption price....................................... } *
47. Maintenance of position in underlying securities........................... } Public Offering
} Rights of Unitholders
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation of Trustee..................................... } Trust Administration
49. Fees and expenses of Trustee............................................... } Trust Operating Expenses
<PAGE>
50. Trustee's lien............................................................. } *
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
}
}
51. Insurance of holders of Trust's securities................................. } Cover Page; Trust Operating
} Expenses; Insurance on the
} Bonds
VII. POLICY OF REGISTRANT
52. (a) Provisions of Trust agreement with respect
to selection or elimination......................................... } The Fund; Trust Administration
(b) Transactions involving elimination of
underlying securities.............................................. } *
(c) Policy regarding substitution or elimination
of underlying securities........................................... } The Fund; Trust Administration
(d) Fundamental policy not otherwise covered.............................. } *
53. Tax status of Trust........................................................ } Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten years................................... } *
55 Certain information regarding periodic payment
thru certificates.......................................................... } *
58.
59. Financial statements (Instruction 1(c) to Form S-6)........................ } *
</TABLE>
- ---------------
*Inapplicable, answer negative or not required.
<PAGE>
DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
NATIONAL INSURED SERIES 6
THE FUND. Delaware Investments Tax-Exempt Trust, Series 15 (the "Fund")
consists of the underlying separate unit investment trust set forth above.
National Insured Series 6 is referred to herein as the "Trust." The Trust
initially consists of interest-bearing obligations (including delivery
statements relating to contracts for the purchase of certain such obligations
and an irrevocable letter of credit) issued by or on behalf of states and
territories of the United States and political subdivisions and authorities
thereof, the interest on which is, with certain exceptions, in the opinion of
recognized bond counsel to the issuing governmental authorities, exempt from all
Federal income taxes under existing law (the "Bonds"). Investors should consult
their tax advisers to determine the extent to which such interest income is
exempt from taxation in their state of residence. Capital gains, if any, are
subject to Federal and state tax. All Bonds in the Trust have insurance
guaranteeing the payments of principal and interest, when due, or are escrowed
to maturity. All such insurance remains effective so long as the Bonds are
outstanding. IT SHOULD BE NOTED THAT THE INSURANCE RELATES ONLY TO THE BONDS IN
THE TRUST AND NOT TO THE UNITS OFFERED HEREBY OR TO THE MARKET VALUE THEREOF. As
a result of such insurance or escrow, the Bonds of the Trust are rated "AAA" by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("Standard &
Poor's") and/or "Aaa" by Moody's Investors Service, Inc. ("Moody's"). Both
Standard & Poor's and Moody's have indicated that their respective rating is not
a recommendation to buy, hold or sell Units nor does it take into account the
extent to which expenses of the Trust or sales by the Trust of Bonds for less
than the purchase price paid by such Trust will reduce payment to Unitholders of
the interest and principal required to be paid on such Bonds. See "Insurance on
the Bonds in the Trust." No representation is made as to any insurer's ability
to meet its commitments. Certain of the Bonds in the Trust may have been
acquired at prices which resulted in such Bonds being purchased at a discount
from the aggregate par value of such Bonds. Gains based upon the difference, if
any, between the value of such Bonds at maturity, redemption or sale and their
purchase price at a discount (plus earned original issue discount) may
constitute taxable ordinary income with respect to a Unitholder who is not a
dealer with respect to his Units. INVESTORS SHOULD NOTE THAT THE SPONSOR
ANTICIPATES THAT A SINGLE INVESTOR WILL PURCHASE SUBSTANTIALLY ALL OF THE UNITS
OF THE TRUST ON THE INITIAL DATE OF DEPOSIT. THE SPONSOR ALSO ANTICIPATES THAT
SOME ADDITIONAL UNITS WILL BE SOLD TO A SMALL NUMBER OF OTHER INVESTORS DURING
THE INITIAL OFFERING PERIOD AND THAT UNITS MAY BE SOLD IN THE SECONDARY MARKET.
A SUBSEQUENT REDEMPTION OF SOME OR ALL OF THE UNITS HELD BY THE INITIAL LARGE
SINGLE INVESTOR COULD HAVE A MATERIAL ADVERSE IMPACT ON THE DIVERSIFICATION OF
THE PORTFOLIO, AND COULD CAUSE THE VALUE OF THE TRUST TO FALL BELOW THE MINIMUM
VALUE UNDER WHICH THE TRUST MAY BE TERMINATED.
INVESTMENT OBJECTIVES OF THE FUND. The objectives of the Trust are to gain
interest income exempt from Federal income tax and conservation of capital
through an investment in a diversified portfolio of Federal and state tax-exempt
obligations. THE TRUST MAY BE AN APPROPRIATE INVESTMENT VEHICLE FOR INVESTORS
WHO DESIRE TO PARTICIPATE IN A PORTFOLIO OF TAX-EXEMPT FIXED INCOME SECURITIES
WITH GREATER DIVERSIFICATION THAN THEY MIGHT BE ABLE TO ACQUIRE INDIVIDUALLY. IN
ADDITION, SECURITIES OF THE TYPE DEPOSITED IN THE TRUST ARE OFTEN NOT AVAILABLE
IN SMALL AMOUNTS. There is, of course, no guarantee that the Trust will achieve
its objectives. The payment of interest and the preservation of principal are
dependent upon the continuing ability of the issuers and/or obligors of the
Bonds and of the insurers thereof to meet their respective obligations.
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY AND INVOLVE INVESTMENT RISK, INCLUDING LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future reference.
THE DATE OF THIS PROSPECTUS IS MAY 19, 1998
<PAGE>
PUBLIC OFFERING PRICE. The Public Offering Price of the Units of the Trust
during the initial offering period is equal to the aggregate offering price of
the Bonds in such Trust's portfolio and cash, if any, in the Principal Account
held or owned by such Trust divided by the number of Units outstanding, plus the
applicable sales charge and accrued interest, if any. For sales charges in the
secondary market, see "Public Offering -- General." IF THE BONDS IN THE TRUST
WERE AVAILABLE FOR DIRECT PURCHASE BY INVESTORS, THE PURCHASE PRICE OF THE BONDS
WOULD NOT INCLUDE THE SALES CHARGE INCLUDED IN THE PUBLIC OFFERING PRICE OF THE
UNITS. THE SALES CHARGES AND EXPENSES ASSOCIATED WITH PURCHASES OF UNITS OF THE
TRUST MAY BE IN EXCESS OF THE CHARGES AND EXPENSES AN INVESTOR WOULD INCUR IF
THE INVESTOR HAD ELECTED TO INDIVIDUALLY DIRECTLY ACQUIRE THE BONDS OR TO INVEST
IN OTHER ALTERNATIVE INVESTMENTS, BUT SUCH ALTERNATIVES WOULD NOT HAVE ALL THE
FEATURES OF A UNIT INVESTMENT TRUST. If Units were available for purchase at the
opening of business on the Initial Date of Deposit, the Public Offering Price
per Unit would have been that amount set forth in the "Summary of Essential
Financial Information." See "Public Offering."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN. The Estimated
Current Return and Estimated Long-Term Return to Unitholders are as set forth
under "Summary of Essential Financial Information." The methods of calculating
Estimated Current Return and Estimated Long-Term Return are set forth under
"Estimated Current Return and Estimated Long-Term Return."
DISTRIBUTIONS. Unitholders will receive distributions on a monthly basis.
See "Rights of Unitholders -- Distributions of Interest and Principal." Record
dates will be the first day of each month. Distributions will be made on the
fifteenth day of the month subsequent to the respective record dates.
MARKET FOR UNITS. Although not obligated to do so, an affiliate of the
Sponsor, Delaware Distributors, L.P., intends to maintain a secondary market for
the Units at prices based upon the aggregate bid price of the Bonds in the
portfolio of the Trust; however, during the initial offering period such prices
will be based upon the aggregate offering prices of the Bonds. If such a market
is not maintained and no other over-the-counter market is available, a
Unitholder will be able to dispose of his Units through redemption at prices
based upon the bid prices of the underlying Bonds (see "Rights of Unitholders --
Redemption of Units").
REINVESTMENT OPTION. Unitholders have the opportunity to have their
distributions reinvested into open-end management investment companies advised
by its Sponsor or its affiliates as described under "Rights of Unitholders --
Reinvestment Option."
RISK FACTORS. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the inability of the issuer or an insurer to pay the principal of or
interest on a Bond when due, volatile interest rates, early call provisions,
and changes to the tax status of the Bonds. In addition, there are risks
associated with the Trust having one Unitholder owning substantially all of the
Units of the Trust. See "Risk Factors."
2
<PAGE>
DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT: MAY 19, 1998
SPONSOR: DELAWARE CAPITAL MANAGEMENT, INC.
DISTRIBUTOR: DELAWARE DISTRIBUTORS, L.P.
EVALUATOR: MULLER DATA CORPORATION
TRUSTEE: THE CHASE MANHATTAN BANK
<TABLE>
<CAPTION>
NATIONAL
INSURED
SERIES 6
-----------
<S> <C>
Principal Amount (Par Value) of Bonds ............................................. $ 2,075,000
Number of Units ................................................................... 206,805
Fractional Undivided Interest in the Trust per Unit ............................... 1/206,805
Par value of bonds per Unit (1) ................................................... $ 10.034
Public Offering Price:
Aggregate Offering Price of Bonds in Portfolio(2) ................................ $ 2,026,686
Aggregate Offering Price of Bonds per Unit ....................................... $ 9.80
Sales Charge 2.0% (2.041% of the Aggregate Offering
Price of the Bonds) per Unit .................................................... $ 0.20
Public Offering Price per Unit (3) ............................................... $ 10.00
Redemption Price per Unit (3)(4) .................................................. $ 9.75
Distributor's Initial Repurchase Price per Unit ................................... $ 9.80
Excess of Public Offering Price per Unit Over Redemption Price per Unit ........... $ 0.25
Excess of Distributor's Initial Repurchase Price per Unit Over Redemption Price per
Unit ............................................................................. $ 0.05
Minimum Value of the Trust under which Trust Agreement may be terminated .......... $ 830,000
Minimum Principal Distribution ..................................... $0.01 per Unit
First Settlement Date ................................................ May 22, 1998
Mandatory Termination Date ...................................... December 31, 2045
Calculation of Estimated Net Annual Unit Income: (7)
Estimated Annual Interest Income per Unit ........................................ $ 0.41434
Less: Estimated Annual Expense per Unit .......................................... $ 0.02883
-----------
Estimated Net Annual Interest Income per Unit .................................... $ 0.38551
Estimated Normal Monthly Distribution per Unit (5) ................................ $ 0.03213
Estimated Daily Rate of Net Interest
Accrual per Unit ................................................................. $ 0.00107
Estimated Current Return Based on Public
Offering Price (5)(6) ............................................................ 3.86%
Estimated Long-Term Return (5)(6) ................................................. 3.87%
Initial Distribution (June 15, 1998) .............................................. $ 0.00964
Trustee's Initial Annual Fee per $1,000 Principal Amount of Bonds (7) ............. $ 1.26
Evaluator's Fee per Evaluation .................................................... $ 8.00
Maximum Annual Supervisory Fee per Unit (8) ....................................... $ 0.00300
Estimated Organizational and Offering
Expenses per Unit (9) ............................................................ $ 0.03598
Distribution Dates .................................... Fifteenth day of each month
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made
as of the close of the New York Stock Exchange (usually 4:00 P.M. Eastern time)
on days of trading on the New York Stock
3
<PAGE>
Exchange next following receipt of an order for a sale or purchase of Units or
receipt by the Trustee of Units tendered for redemption.
- ------------------
(1) Because certain of the Bonds in the Trust may from time to time under
certain circumstances be sold or redeemed or will be called or mature in
accordance with their terms, there is no guarantee that the value of each
Unit at the Trust's termination will be equal to the Principal Amount (Par
Value) of Bonds per Unit stated above.
(2) The Bonds were initially valued at 11:00 a.m. Eastern Time on the Business
Day before the Initial Date of Deposit. Thereafter, the Bonds will be
valued at the evaluation time set forth above. See "Public Offering --
Offering Price."
(3) Anyone ordering Units for settlement after the First Settlement Date will
pay accrued interest from such date to the date of settlement (normally
three business days after order) less distributions from the Interest
Account subsequent to the First Settlement Date. For purchases settling on
the First Settlement Date, no accrued interest will be added to the Public
Offering Price. After the initial offering period, the Distributor's
Repurchase Price per Unit will be determined as described under the caption
"Public Offering."
(4) See "Rights of Unitholders -- Redemption of Units."
(5) These figures are based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in current
interest rates and with the principal prepayment, redemption, maturity,
call, exchange or sale of the underlying Bonds. The estimated cash flows for
the Trust are available upon request at no charge from the Distributor.
(6) See "Estimated Current Return and Estimated Long-Term Return" for
information concerning the calculation of both Estimated Current Returns and
Estimated Long-Term Returns.
(7) During the first year the Trustee will reduce its fee in the Trust by
approximately $0.18 per 100 Units (which amount is the estimated interest to
be earned per Unit prior to the expected delivery date for the "when, as and
if issued" Bonds included in such Trust). Should such estimated interest
exceed such amount, the Trustee will reduce its fee up to its annual fee.
After the first year, the Trustee's fee will be that amount indicated above;
Estimated Annual Interest Income per Unit, Estimated Annual Expense per
Unit, and Estimated Net Annual Interest Income per Unit will remain the same
as shown. See "Estimated Current Return and Estimated Long-Term Return."
(8) The Supervisory Fee is payable to the Sponsor. In addition, the Sponsor will
be reimbursed by the Trust for bookkeeping and administrative expenses
currently at a maximum annual rate of $0.001 per Unit.
(9) The Trust (and therefore the Unitholders of the Trust) will bear all or a
portion of its organizational and offering costs (including costs of
preparing the registration statement, the trust indenture and other closing
documents, registering Units with the Securities and Exchange Commission,
the initial audit of the Trust portfolio and the initial fees and expenses
of the Trustee but not including the expenses incurred in the preparation
and printing of brochures and other advertising materials and any other
selling expenses) as is common for mutual funds. Total organizational and
offering expenses will be charged off over a six month period from the
Initial Date of Deposit. In order to reimburse the Trustee for
organizational and offering costs, the Sponsor may have to sell Securities
from the Trust. The sale of Securities will serve to reduce the Principal
Amount (Par Value) of Bonds per Unit stated above. See "Trust Operating
Expenses" and "Statements of Net Assets." Historically, the sponsors of unit
investment trusts have paid all of the costs of establishing such trusts.
4
<PAGE>
THE FUND
GENERAL. The Fund was created under the laws of the State of New York
pursuant to a Trust Agreement (the "Trust Agreement"), dated the Initial Date of
Deposit, as defined in "Summary of Essential Financial Information," with
Delaware Capital Management, Inc. as Sponsor, Muller Data Corporation as
Evaluator, and The Chase Manhattan Bank as Trustee.
The Fund consists of one unit investment trust, which has a portfolio of
interest-bearing obligations (including delivery statements relating to
contracts for the purchase of certain such obligations) issued by or on behalf
of states and territories of the United States, and political subdivisions and
authorities thereof, the interest on which is, in the opinion of recognized bond
counsel to the issuing governmental authorities, exempt from all Federal income
taxes under existing law. In addition, interest income may also be exempt from
certain state and local taxes for residents of various states. On the Initial
Date of Deposit, the Sponsor deposited with the Trustee the Bonds indicated
under the "Schedule of Investments," including delivery statements relating to
contracts for the purchase of certain such obligations and an irrevocable letter
of credit issued by a financial institution in the aggregate amount required for
such purchases (the "Bonds"). Thereafter, the Trustee, in exchange for the Bonds
so deposited and at the direction of the Sponsor, delivered to the Distributor
evidences of ownership of the number of Units of the Trust as indicated under
"Summary of Essential Financial Information."
With the deposit of the Bonds on the Initial Date of Deposit, the Sponsor
established a percentage relationship between the amounts of Bonds in the
Trust's portfolio. From time to time following the Initial Date of Deposit, the
Sponsor, pursuant to the Trust Agreement, may deposit additional Bonds in the
Trust and Units may be continuously offered for sale to the public by means of
this Prospectus, resulting in a potential increase in the outstanding number of
Units of the Trust. Any additional Bonds deposited in the Trust will maintain,
as nearly as is practicable, the original proportionate relationship of the
Bonds in the Trust's portfolio. Since the prices of the underlying Bonds will
fluctuate daily, the ratio, on a market value basis, will also change daily. The
portion of Bonds represented by each Unit will not change as a result of the
deposit of additional Bonds in the Trust.
Certain of the Bonds in the Trust may have been purchased on a "when, as
and if issued" or "delayed delivery" basis. See footnote (1) in "The Trust --
Notes to Schedules of Investments." The delivery of any such Bonds may be
delayed or may not occur. Interest on these Bonds begins accruing to the benefit
of Unitholders on their respective dates of delivery. To the extent any Bonds
are actually delivered to the Trust after their respective expected dates of
delivery, Unitholders who purchase their Units prior to the date such Bonds are
actually delivered to the Trustee would be required to adjust their tax basis in
their Units for a portion of the interest accruing on such Bonds during the
interval between their purchase of Units and the actual delivery of such Bonds.
As a result of any such adjustment, the Estimated Current Returns during the
first year would be slightly lower than those stated herein which would be the
returns after the first year, assuming the portfolio of the Trust and estimated
annual expenses other than those of the Trustee (which may be reduced in the
first year only) do not vary from that set forth under "Summary of Essential
Financial Information." Unitholders will be "at risk" with respect to all Bonds
in the portfolios including "when, as and if issued" and "delayed delivery"
Bonds (i.e., may derive either gain or loss from fluctuations in the evaluation
of such Bonds) from the date they commit for Units. For a discussion of the
Sponsor's obligations in the event of the failure of any contract for the
purchase of any of the Bonds and limited right to substitute other tax-exempt
bonds to replace any failed contract, see "Replacement Bonds" below.
Each Unit initially offered represents the fractional undivided interest in
the Trust as indicated under "Summary of Essential Financial Information." To
the extent that any Units are redeemed by the Trustee, the fractional undivided
interest in the Trust represented by each unredeemed Unit will
5
<PAGE>
increase, although the actual interest in the Trust represented by such fraction
will remain unchanged. Units will remain outstanding until redeemed upon tender
to the Trustee by Unitholders, which may include the Distributor, or until the
termination of the Trust Agreement.
REPLACEMENT BONDS. Because certain of the Bonds in the Trust may from time
to time under certain circumstances be sold or redeemed or will mature in
accordance with their terms and because the proceeds from such events will be
distributed to Unitholders and will not be reinvested, no assurance can be given
that the Trust will retain for any length of time its present size and
composition. Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any Bond. In the event of a failure to deliver
any Bond that has been purchased for the Trust under a contract, including those
securities purchased on a "when, as and if issued" basis ("Failed Bonds"), the
Sponsor is authorized under the Trust Agreement to direct the Trustee to acquire
other securities ("Replacement Bonds") to make up the original corpus of the
Trust.
The Replacement Bonds must be purchased within 20 days after delivery of
the notice of the failed contract and the purchase price (exclusive of accrued
interest) may not exceed the amount of funds reserved for the purchase of the
Failed Bonds. The Replacement Bonds shall (i) be tax-exempt bonds, issued by
states or territories of the United States or political subdivisions thereof and
shall have the benefit of an exemption from state taxation of interest to an
extent equal to or greater than that of the bonds they replace, with fixed
maturity dates substantially the same as those of the Failed Bonds; (ii) be
purchased at a price that results in a yield to maturity and in a current
return, in each case as of the Initial Date of Deposit, at least equal to that
of the Failed Bonds; (iii) be payable in U.S. currency; (iv) not be when, as and
if issued bonds; (v) be rated at least "AAA" by Standard & Poor's and/or "Aaa"
by Moody's and (vi) be insured by one of the Insurers. Whenever a Replacement
Bond has been acquired for the Trust, the Trustee shall, within five days
thereafter, notify all Unitholders of the Trust of the acquisition of the
Replacement Bond and shall, on the next monthly distribution date which is more
than 30 days thereafter, make a pro rata distribution of the amount, if any, by
which the cost to the Trust of the Failed Bond exceeded the cost of the
Replacement Bond plus accrued interest. Once the original corpus of the Trust is
acquired, the Trustee will have no power to vary the investment of the Trust;
i.e., the Trustee will have no managerial power to take advantage of market
variations to improve a Unitholder's investment.
If the right of limited substitution described in the preceding paragraph
shall not be utilized to acquire Replacement Bonds in the event of a failed
contract, the Distributor will refund the sales charge attributable to such
Failed Bonds to all Unitholders of the Trust and distribute the principal and
accrued interest (at the coupon rate of such Failed Bonds to the date the Failed
Bonds are removed from the Trust) attributable to such Failed Bonds not later
than the next Distribution Date following such removal or such earlier time as
the Trustee in its sole discretion deems to be in the interest of the
Unitholders. In the event a Replacement Bond should not be acquired by the
Trust, the estimated net annual interest income per Unit for the Trust would be
reduced and the Estimated Current Return and the Estimated Long-Term Return
thereon might be lowered. In addition, Unitholders should be aware that they may
not be able at the time of receipt of such principal to reinvest such proceeds
in other securities at a yield equal to or in excess of the yield which such
proceeds were earning to Unitholders in the Trust.
INVESTMENT OBJECTIVES AND PORTFOLIO SELECTION
The objectives of the Trust are to gain interest income exempt from Federal
income tax and to conserve capital through an investment in a diversified
portfolio of Federal and state tax-exempt obligations. There is, of course, no
guarantee that the Trust will achieve its objectives. The Trust may be an
appropriate investment vehicle for investors who desire to participate in a
portfolio of tax-exempt
6
<PAGE>
fixed income securities with greater diversification than they might be able to
acquire individually. In addition, securities of the type deposited in the Trust
are often not available in small amounts.
Insurance guaranteeing the timely payment, when due, of all principal and
interest on the Bonds in the Trust has been obtained by the issuer of such
Bonds, by a prior owner of such Bonds or by the Sponsor prior to the deposit of
such Bonds in the Trust from one of several insurance companies (the
"Insurers"). Certain Bonds may be escrowed to maturity. No representation is
made as to any Insurer's ability to meet its commitments. All Bonds insured by
an Insurer receive a "AAA" rating by Standard & Poor's and a "Aaa" rating by
Moody's. See "Description of Bond Ratings."
In selecting Bonds for the Trust the following factors, among others, were
considered by the Sponsor: (i) either the Standard & Poor's rating of the
securities was in no case less than AAA or the Moody's rating of the Securities
was in no case less than Aaa including provisional or conditional ratings,
respectively, or, if not rated, the Securities had, in the opinion of the
Sponsor, credit characteristics sufficiently similar to the credit
characteristics of interest-bearing tax-exempt obligations that were so rated as
to be acceptable for acquisition by the Trust, (ii) whether the Bonds are
insured by an Insurer (iii) the prices of the Bonds relative to other bonds of
comparable quality and maturity, (iv) the diversification of Bonds as to purpose
of issue and location of issuer, and (v) the availability and cost of insurance
for the prompt payment of principal and interest, when due, on the Bonds.
Subsequent to the Initial Date of Deposit, a Bond may cease to be rated or its
rating may be reduced below either the applicable Standard & Poor's or Moody's
ratings set forth above or both. Neither event requires elimination of such
Bonds from the portfolio of the Trust but may be considered in the Sponsor's
determination as to whether or not to direct the Trustee to dispose of the
Bonds. See "Trust Administration -- Portfolio Administration."
To the best knowledge of the Sponsor, there is no litigation pending as of
the Initial Date of Deposit in respect of any Bonds which might reasonably be
expected to have a material adverse effect upon the Fund or the Trust. At any
time after the Initial Date of Deposit, litigation may be initiated on a variety
of grounds with respect to Bonds in the Trust. Such litigation as, for example,
suits challenging the issuance of pollution control revenue bonds under
environmental protection statutes, may affect the validity of such Bonds or the
tax-free nature of the interest thereon. The outcome of litigation of such
nature can never be entirely predicted. The Fund has received or will receive
opinions of bond counsel to the issuing authorities of each Bond on the date of
issuance to the effect that such Bonds have been validly issued and that the
interest thereon is exempt from Federal and applicable state income taxation. In
addition, other factors may arise from time to time which potentially may impair
the ability of issuers to meet obligations undertaken with respect to the Bonds.
THE TRUST
NATIONAL INSURED SERIES 6
GENERAL. National Insured Series 6 consists of eight issues of Bonds all
issued by entities located in seven states. Two of the Bonds in the Trust
(24.1%) are general obligations of the governmental entities issuing them or are
backed by the taxing power thereof. The remaining issues are payable from the
income of a specific project or authority and are not supported by the issuer's
power to levy taxes. These issues are divided by purpose of issues (and
percentage of principal amount to total Trust) as follows: 27.7% Education,
36.2% Other Revenue, and 12.0% Water & Sewer Revenue. No Bond issue has received
a provisional rating. For a general description of certain of the risks
associated with the Bonds, see "Risk Factors" below.
FEDERAL TAXATION. For a discussion of the Federal tax status of income
earned on Units, see "Tax Status."
7
<PAGE>
REPORT OF INDEPENDENT AUDITORS
TO THE SPONSOR, TRUSTEE AND THE UNITHOLDERS OF DELAWARE INVESTMENTS
TAX-EXEMPT TRUST, SERIES 15:
We have audited the accompanying statement of net assets, including the
schedule of investments, of Delaware Investments Tax-Exempt Trust, Series 15
(comprised of the National Insured Series 6) as of the opening of business on
May 19, 1998. The statement of net assets is the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on this statement of net
assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of net assets is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of net assets. Our
procedures included confirmation of the irrevocable letter of credit held by the
Trustee and deposited in the Trust on May 19, 1998. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall presentation of the statement of net
assets. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of Delaware Investments
Tax-Exempt Trust, Series 15 at the opening of business on May 19, 1998, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
May 19, 1998
8
<PAGE>
DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
STATEMENT OF NET ASSETS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: MAY 19, 1998
<TABLE>
<CAPTION>
NATIONAL
INSURED
SERIES 6
----------
<S> <C>
Contracts to purchase securities (1)(2) ..................... $2,026,686
Accrued interest on underlying securities (1)(3) ............ 22,493
Organizational and offering costs (4) ....................... 7,440
----------
Total Assets ................................................ 2,056,619
Less: distributions payable (3) ............................. 22,493
Less: accrued organizational and offering costs (4) ......... 7,440
----------
Net Assets .................................................. $2,026,686
==========
Net Assets Represented By:
Interest of Unitholders --
Units of fractional undivided interest
outstanding: (206,805 Units)
Cost to investors (5) ....................................... $2,068,050
Less: Gross underwriting commission (5) ..................... 41,364
----------
Net Assets (5) .............................................. $2,026,686
==========
</TABLE>
- ------------------
(1) The aggregate value of the Bonds listed under "Schedule of Investments" and
their cost to such Trust are the same. The value of the Bonds is determined
by Muller Data Corporation as of 11:00 a.m. Eastern Time on May 18, 1998 on
the basis set forth under "Public Offering -- Offering Price." The contracts
to purchase securities are collateralized by an irrevocable letter of credit
which has been deposited with the Trustee in and for the following amount:
<TABLE>
<CAPTION>
PRINCIPAL OFFERING
AMOUNT OF PRICE OF ACCRUED INTEREST
AMOUNT OF BONDS UNDER BONDS UNDER TO EXPECTED
LETTER OF CREDIT CONTRACTS CONTRACTS DELIVERY DATES
---------------- ----------- ----------- ----------------
<S> <C> <C> <C> <C>
National Insured Series 6 ......... $2,100,000 $2,075,000 $2,026,686 $22,493
</TABLE>
(2) Insurance coverage providing for the timely payment of principal and
interest on the Bonds in the portfolio of the Trust has been obtained by
the issuer of the Bond, the underwriter of such Bond or others. See
"Schedule of Investments."
(3) The Trustee will advance the amount of accrued interest as of May 22, 1998
(the "First Settlement Date"), and all accrued interest to the First
Settlement Date will be distributed to the Distributor as the Unitholder of
record as of the First Settlement Date.
(4) The Trust (and therefore Unitholders) will bear all or a portion of their
organizational and offering costs, which will be deferred and charged off
over a six month period from the Initial Date of Deposit.
(5) The aggregate public offering price (exclusive of interest) and the
aggregate sales charge are computed on bases set forth under "Public
Offering -- Offering Price" and "Public Offering -- Sponsor and
Distributor Compensation."
9
<PAGE>
NATIONAL INSURED SERIES 6
SCHEDULE OF INVESTMENTS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: MAY 19, 1998
<TABLE>
<CAPTION>
NAME OF ISSUER, TITLE, INTEREST RATE AND
AGGREGATE MATURITY DATE OF EITHER BONDS DEPOSITED REDEMPTION OFFERING PRICE
PRINCIPAL (1) OR BONDS CONTRACTED FOR (1)(5) RATING (2) PROVISIONS (3) TO TRUST (4)
- ------------- -------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
$ 250,000 Board of Education of Iron County, Utah, AAA Non-Callable $ 270,560
General Obligation School Building
Bonds, Series 1994, (MBIA Insured),
5.90%, Due 01/15/2015 #
250,000 City of New Orleans, Louisiana, AAA Non-Callable 251,088
Refunding Certificates of Indebtedness,
Series 1998 B, (FSA Insured), 4.50%, Due
12/01/2005 #
250,000 County of Otsego, New York, Industrial AAA Non-Callable 251,105
Development Agency, Civic Facilities
Revenue Bonds, (Bassett Healthcare
Obligated Group-Outpatient Clinic
Project), (MBIA Insured), 4.50%, Due
11/01/2004 #
250,000 District of Columbia Revenue Refunding AAA Non-Callable 260,560
Bonds, The Howard University Issue,
Series 1998, (MBIA Insured), 5.25%, Due
10/01/2003
250,000 Maryland State Health & Higher AAA Non-Callable 251,088
Educational Facilities Authority Revenue
Bonds, Helix Health Issue, Series 1997,
(AMBAC Insured), 4.50%, Due 7/01/2005 #
250,000 City of Houston, Texas, Water & Sewer AAA Non-Callable 249,985
System Revenue Bonds, Junior Lien,
Series 1998 B, (FSA Insured), 4.50%, Due
12/01/2005 **, #
250,000 State of Illinois General Obligation Bonds, AAA Non-Callable 260,968
Series of December, 1995, (FGIC Insured),
5.125%, Due 12/01/2005
325,000 Houston, Texas, Independent School AAA Non-Callable 231,332
District, Public Facilities Corporation
Lease Revenue Bonds, (Cesar E Chavez
High School), Series 1998 A, (AMBAC
Insured), 0.00%, Due 9/15/2005 **, #, 6
---------- ----------
$2,075,000 $2,026,686
========== ==========
</TABLE>
For an explanation of footnotes used on this page, see "Notes to Schedule
of Investments" on page 11.
10
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
AS OF THE OPENING OF BUSINESS ON THE
INITIAL DATE OF DEPOSIT: MAY 19, 1998
1. Certain Bonds are represented by "regular way" or "when issued"
contracts for the performance of which an irrevocable letter of credit, obtained
from a financial institution unaffiliated with the Sponsor, has been deposited
with the Trustee. The Sponsor has assigned to the Trustee all of its right,
title and interest in and to such Bonds. Contracts to acquire Bonds were entered
on or after May 15, 1998. These Bonds have expected settlement dates on or prior
to June 4, 1998 (see "The Fund").
2. All ratings are by Standard & Poor's and/or Moody's. As a result of the
insurance related to each Bond, each Bond is rated "AAA" by Standard & Poor's
and/or "Aaa" by Moody's. See "Insurance on Bonds in the Trust" and "Description
of Bond Ratings."
3. There is shown under this heading the year in which each issue of the
Bonds is initially or currently callable and the call price for that year. Each
issue of the Bonds continues to be callable at declining prices thereafter (but
not below par value) except for original issue discount bonds which are
redeemable at prices based on the issue price plus the amount of original issue
discount accreted to redemption date plus, if applicable, some premium, the
amount of which will decline in subsequent years. "S.F." indicates a sinking
fund is established with respect to an issue of the Bonds. Redemption pursuant
to call provisions generally will, and redemption pursuant to sinking fund
provisions may, occur at times when the redeemed obligations have an offering
side valuation which represents a premium over par. Certain Bonds may be subject
to redemption without premium prior to the date shown pursuant to extraordinary
optional or mandatory redemptions if certain events occur. Notwithstanding any
provisions to the contrary, certain bond issuers have in the past, and others
may in the future, attempt to redeem bonds prior to their initially scheduled
call dates and at prices which do not include any premiums. For a general
discussion of certain of these events, see "Risk Factors -- Redemptions of
Bonds." To the extent that the Bonds were deposited in the Trust at a price
higher than the price at which they are redeemed, this will represent a loss of
capital when compared with the original Public Offering Price of the Units.
Conversely, to the extent that the Bonds were acquired at a price lower than the
redemption price, this will represent an increase in capital when compared with
the original Public Offering Price of the Units. Distributions will generally be
reduced by the amount of the income which would otherwise have been paid with
respect to redeemed Bonds and there will be distributed to Unitholders the
principal amount and any premium received on such redemption. The Estimated
Current Return and Estimated Long-Term Return in this event may be affected by
such redemptions. For the Federal tax effect on Unitholders of such redemptions
and resultant distributions, see "Tax Status" and "Estimated Current Return and
Estimated Long-Term Return."
4. Evaluation of Bonds is made on the basis of current offering prices for
the Bonds. The offering prices are greater than the current bid prices of the
Bonds which is the basis on which Unit value is determined for purposes of
redemption of Units (see "Public Offering -- Offering Price").
5. Other information regarding the Bonds in the Trust, as of the opening of
business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
ANNUAL BID SIDE
COST TO PROFIT (LOSS) INTEREST INCOME EVALUATION
TRUST SPONSOR TO SPONSOR TO TRUST OF BONDS
- -------------------------------------- ---------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
National Insured Series 6 ......... $2,023,221 $3,464 $85,688 $2,017,122
</TABLE>
The Sponsor may have entered into contracts which hedge interest rate
fluctuations on certain Bonds in the portfolio. On the opening of business on
the Initial Date of Deposit, the offering side evaluation of
11
<PAGE>
the Bonds in the Trust was higher than the bid side evaluation of such Bonds by
.47%. Two Bonds in the Trust representing 28% of the principal amount of the
Bonds, respectively, (marked by a double asterisk(**)) were purchased on a
"when, as and if issued" basis. Interest on these Bonds begins accruing to the
benefit of Unitholders on their respective dates of delivery. Delivery is
expected to take place six to twelve days after the First Settlement Date.
"#" indicates that such Bond was issued at either an original issue discount or
purchased at a market discount. The tax effect of Bonds issued at an original
issue discount or purchased at a market discount is described in "Tax Status."
6. This Bond has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Bonds which pay
no interest are normally described as "zero coupon" bonds. Over the life of
bonds purchased at a deep discount the value of such bonds will increase such
that upon maturity the holders of such bonds will receive 100% of the principal
amount thereof. To the extent that zero coupon bonds are sold or called prior
to maturity, there is no guarantee that the value of the proceeds received
therefrom by the Trust will equal or exceed the par value that would have been
obtained at maturity of such zero coupon bonds.
- -------------------------
EQUIVALENT TAXABLE ESTIMATED CURRENT RETURNS
As of the date of this Prospectus, the following table shows the
approximate taxable estimated current returns for individuals that are
equivalent to tax-exempt estimated current returns under Federal taxes using the
published Federal tax rates scheduled to be in effect in 1998. This table
illustrates approximately what you would have to earn on taxable investments to
equal the tax-exempt estimated current return in your income tax bracket. The
table does not show the approximate taxable estimated current returns for
individuals who are subject to the alternative minimum tax. The taxable
equivalent estimated current returns may be somewhat higher than the equivalent
returns indicated in the following table for those individuals who have adjusted
gross incomes in excess of $124,500. The table does not reflect the effect of
limitations on itemized deductions and the deduction for personal exemptions
which were designed to phase out certain benefits of these deductions for higher
income taxpayers. These limitations, in effect, raise the marginal maximum
Federal tax rate to approximately 44 percent for taxpayers filing a joint return
and entitled to four personal exemptions and to approximately 41 percent for
taxpayers filing a single return entitled to only one personal exemption. These
limitations are subject to certain maximums, which depend on the number of
exemptions claimed and the total amount of the taxpayer's itemized deductions.
For example, the limitation on itemized deductions will not cause a taxpayer to
lose more than 80 percent of his allowable itemized deductions, with certain
exceptions. See "Tax Status" for a more detailed discussion of recent Federal
tax legislation, including a discussion of provisions affecting corporations.
FEDERAL TAX EQUIVALENT TABLE
<TABLE>
<CAPTION>
TAXABLE INCOME ($1,000'S) TAX-EXEMPT ESTIMATED CURRENT RETURN
- ---------------------------------- ------------------------------------------------------------------------
SINGLE JOINT TAX 3-1/2% 4% 4-1/2% 5% 5-1/2% 6% 6-1/2%
RETURN RETURN BRACKET EQUIVALENT TAXABLE ESTIMATED CURRENT RETURN
- --------------- -------------- ------- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-25.35 $ 0-42.35 15.0% 4.12% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65%
25.35-61.40 42.35-102.30 28.0 4.86 5.56 6.25 6.94 7.64 8.33 9.03
61.40-128.10 102.30-155.95 31.0 5.07 5.80 6.52 7.25 7.97 8.70 9.42
128.10-278.45 155.95-278.45 36.0 5.47 6.25 7.03 7.81 8.59 9.38 10.16
Over 278.45 Over 278.45 39.6 5.75 6.57 7.45 8.28 9.11 9.93 10.76
</TABLE>
12
<PAGE>
RISK FACTORS
GENERAL. INVESTORS SHOULD NOTE THAT THE SPONSOR ANTICIPATES THAT A SINGLE
INVESTOR WILL PURCHASE SUBSTANTIALLY ALL OF THE UNITS OF THE TRUST ON THE
INITIAL DATE OF DEPOSIT. THE SPONSOR ALSO ANTICIPATES THAT SOME ADDITIONAL UNITS
WILL BE SOLD TO A SMALL NUMBER OF OTHER INVESTORS DURING THE INITIAL OFFERING
PERIOD, AND THAT UNITS MAY BE SOLD IN THE SECONDARY MARKET. A SUBSEQUENT
REDEMPTION OF SOME OR ALL OF THE UNITS HELD BY THE INITIAL LARGE SINGLE INVESTOR
COULD HAVE A MATERIAL ADVERSE IMPACT ON THE DIVERSIFICATION OF THE PORTFOLIO,
AND COULD CAUSE THE VALUE OF THE TRUST TO FALL BELOW THE MINIMUM VALUE UNDER
WHICH THE TRUST MAY BE TERMINATED.
Certain of the Bonds in the Trust may have been acquired at a market
discount from par value. The coupon interest rates on the discount bonds at the
time they were purchased and deposited in the Trust were lower than the current
market interest rates for newly issued bonds of comparable rating and type. If
such interest rates for newly issued comparable bonds increase, the market
discount of previously issued bonds will become greater, and if such interest
rates for newly issued comparable bonds decline, the market discount of
previously issued bonds will be reduced, other things being equal. Investors
should also note that the value of bonds purchased at a market discount will
increase in value faster than Bonds purchased at a market premium if interest
rates decrease. Conversely, if interest rates increase, the value of bonds
purchased at a market discount will decrease faster than Bonds purchased at a
market premium. In addition, if interest rates rise, the prepayment risk of
higher yielding, premium bonds and the prepayment benefit for lower yielding,
discount bonds will be reduced. A discount bond held to maturity will have a
larger portion of its total return in the form of taxable income and capital
gain and less in the form of tax-exempt interest income than a comparable bond
newly issued at current market rates. See "Tax Status." Market discount
attributable to interest changes does not indicate a lack of market confidence
in the issue. Neither the Sponsor, the Distributor nor the Trustee shall be
liable in any way for any default, failure or defect in any of the Bonds.
Certain of the Bonds in the Trust may be original issue discount bonds.
Under current law, the original issue discount, which is the difference between
the stated redemption price at maturity and the issue price of the Bonds, is
deemed to accrue on a daily basis and the accrued portion is treated as
tax-exempt interest income for Federal income tax purposes. On sale or
redemption, any gain realized that is in excess of the earned portion of
original issue discount will be taxable as capital gain unless the gain is
attributable to market discount in which case the accretion of market discount
is taxable as ordinary income. See "Tax Status." The current value of an
original issue discount bond reflects the present value of its stated redemption
price at maturity. The market value tends to increase in greater increments as
the Bonds approach maturity.
Certain of the original issue discount bonds may be zero coupon bonds
(including bonds known as multiplier bonds, money multiplier bonds, capital
appreciation bonds, capital accumulator bonds, compound interest bonds and money
discount maturity payment bonds). Zero coupon bonds do not provide for the
payment of any current interest and generally provide for payment at maturity at
face value unless sooner sold or redeemed. Zero coupon bonds may be subject to
more price volatility than conventional bonds. While some types of zero coupon
bonds, such as multipliers and capital appreciation bonds, define par as the
initial offering price rather than the maturity value, they share the basic zero
coupon bond features of (i) not paying interest on a semi-annual basis and (ii)
providing for the reinvestment of the bond's semi-annual earnings at the bond's
stated yield to maturity. While zero coupon bonds are frequently marketed on the
basis that their fixed rate of return minimizes reinvestment risk, this benefit
can be negated in large part by weak call protection, i.e., a bond's provision
for redemption at only a modest premium over the accreted value of the bond. See
footnote (6) in "The Trust -- Notes to Schedule of Investments."
13
<PAGE>
Certain of the Bonds in the Trust may have been acquired at a market
premium from par value at maturity. The coupon interest rates on the premium
bonds at the time they were purchased and deposited in the Trust were higher
than the current market interest rates for newly issued bonds of comparable
rating and type. If such interest rates for newly issued and otherwise
comparable bonds decrease, the market premium of previously issued bonds will be
increased, and if such interest rates for newly issued comparable bonds
increase, the market premium of previously issued bonds will be reduced, other
things being equal. The current returns of bonds trading at a market premium are
initially higher than the current returns of comparable bonds of a similar type
issued at currently prevailing interest rates because premium bonds tend to
decrease in market value as they approach maturity when the face amount becomes
payable. Because part of the purchase price is thus returned not at maturity but
through current income payments, early redemption of a premium bond at par or
early prepayments of principal will result in a reduction in yield. Redemption
pursuant to call provisions generally will, and redemption pursuant to sinking
fund provisions may, occur at times when the redeemed Bonds have an offering
side valuation which represents a premium over par or for original issue
discount Bonds a premium over the accreted value. To the extent that the Bonds
were deposited in the Trust at a price higher than the price at which they are
redeemed, this will represent a loss of capital when compared to the original
Public Offering Price of the Units. Because premium bonds generally pay a higher
rate of interest than Bonds priced at or below par, the effect of the redemption
of premium bonds would be to reduce estimated net annual unit income by a
greater percentage than the par amount of such bonds bears to the total par
amount of Bonds in the affected Trust. Although the actual impact of any such
redemptions that may occur will depend upon the specific Bonds that are
redeemed, it can be anticipated that the estimated net annual unit income will
be significantly reduced after the dates on which such Bonds are eligible for
redemption. The Trust may be required to sell zero coupon bonds prior to
maturity (at their current market price which is likely to be less than their
par value) in the event that all the Bonds in the portfolio other than the zero
coupon bonds are called or redeemed in order to pay expenses of the Trust or in
case the Trust is terminated. See "Trust Administration -- Portfolio
Administration" and "Trust Administration -- Amendment or Termination." See "The
Trust -- Schedule of Investments" for the earliest scheduled call date and the
initial redemption price for each Bond.
Certain of the Bonds in the Trust may be general obligations of a
governmental entity that are backed by the taxing power of such entity. In view
of this, an investment in the Trust should be made with an understanding of the
characteristics of such issuers and the risks which such an investment may
entail. All other Bonds in the Trust are revenue bonds payable from the income
of a specific project or authority and are not supported by the issuer's power
to levy taxes. General obligation bonds are secured by the issuer's pledge of
its faith, credit and taxing power for the payment of principal and interest.
Revenue bonds, on the other hand, are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise tax or other specific revenue source. There are, of
course, variations in the security of the different Bonds in the Trust, both
within a particular classification and between classifications, depending on
numerous factors. See "The Trust -- General."
Certain of the Bonds in the Trust may be obligations which derive their
payments from mortgage loans. Certain of such housing bonds may be FHA insured
or may be single family mortgage revenue bonds issued for the purpose of
acquiring from originating financial institutions notes secured by mortgages on
residences located within the issuer's boundaries and owned by persons of low or
moderate income. In view of this, an investment in the Trust should be made with
an understanding of the characteristics of such issuers and the risks which such
an investment may entail. Mortgage loans are generally partially or completely
prepaid prior to their final maturities as a result of events such as sale of
the mortgaged premises, default, condemnation or casualty loss. Because these
bonds are subject to extraordinary mandatory redemption in whole or in part from
such prepayments of mortgage loans, a
14
<PAGE>
substantial portion of such bonds will probably be redeemed prior to their
scheduled maturities or even prior to their ordinary call dates. Extraordinary
mandatory redemption without premium could also result from the failure of the
originating financial institutions to make mortgage loans in sufficient amounts
within a specified time period. Additionally, unusually high rates of default on
the underlying mortgage loans may reduce revenues available for the payment of
principal of or interest on such mortgage revenue bonds. These bonds were issued
under Section 103A of the Internal Revenue Code, which Section contains certain
requirements relating to the use of the proceeds of such bonds in order for the
interest on such bonds to retain its tax-exempt status. In each case the issuer
of the bonds has covenanted to comply with applicable requirements and bond
counsel to such issuer has issued an opinion that the interest on the bonds is
exempt from Federal income tax under existing laws and regulations. Certain
issuers of housing bonds have considered various ways to redeem bonds they have
issued prior to the stated first redemption dates for such bonds. In connection
with any housing bonds held by the Trust, the Sponsor at the Initial Date of
Deposit is not aware that any of the respective issuers of such Bonds are
actively considering the redemption of such Bonds prior to their respective
stated initial call dates. See "The Trust -- General."
Certain of the Bonds in the Trust may be health care revenue bonds. In view
of this, an investment in the Trust should be made with an understanding of the
characteristics of such issuers and the risks which such an investment may
entail. Ratings of bonds issued for health care facilities are often based on
feasibility studies that contain projections of occupancy levels, revenues and
expenses. A facility's gross receipts and net income available for debt service
may be affected by future events and conditions including, among other things,
demand for services and the ability of the facility to provide the services
required, physicians' confidence in the facility, management capabilities,
competition with other health care facilities, efforts by insurers and
governmental agencies to limit rates, legislation establishing state
rate-setting agencies, expenses, the cost and possible unavailability of
malpractice insurance, the funding of Medicare, Medicaid and other similar third
party payor programs, government regulation and the termination or restriction
of governmental financial assistance, including that associated with Medicare,
Medicaid and other similar third party payor programs. Medicare reimbursements
are currently calculated on a prospective basis utilizing a single nationwide
schedule of rates. Prior to such legislation Medicare reimbursements were based
on the actual costs incurred by the health facility. The current legislation may
adversely affect reimbursements to hospitals and other facilities for services
provided under the Medicare program. See "The Trust -- General."
Certain of the Bonds in the Trust may be obligations of public utility
issuers, including those selling wholesale and retail electric power and gas. In
view of this, an investment in the Trust should be made with an understanding of
the characteristics of such issuers and the risks which such an investment may
entail. General problems of such issuers would include the difficulty in
financing large construction programs in an inflationary period, the limitations
on operations and increased costs and delays attributable to environmental
considerations, the difficulty of the capital market in absorbing utility debt,
the difficulty in obtaining fuel at reasonable prices and the effect of energy
conservation. All of such issuers have been experiencing certain of these
problems in varying degrees. In addition, Federal, state and municipal
governmental authorities may from time to time review existing, and impose
additional, regulations governing the licensing, construction and operation of
nuclear power plants, which may adversely affect the ability of the issuers of
certain of the Bonds in the portfolio to make payments of principal and/or
interest on such Bonds. See "The Trust -- General."
Certain of the Bonds in the Trust may be obligations of issuers whose
revenues are derived from the sale of water and/or sewerage services. In view of
this, an investment in the Trust should be made with an understanding of the
characteristics of such issuers and the risks which such an investment may
entail. Such Bonds are generally payable from user fees. The problems of such
issuers include the ability to
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obtain timely and adequate rate increases, population decline resulting in
decreased user fees, the difficulty of financing large construction programs,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the increasing difficulty of obtaining or
discovering new supplies of fresh water, the effect of conservation programs and
the impact of "no growth" zoning ordinances. All of such issuers have been
experiencing certain of these problems in varying degrees. See "The Trust --
General."
Certain of the Bonds in the Trust may be industrial revenue bonds ("IRBs").
In view of this, an investment in the Trust should be made with an understanding
of the characteristics of such issuers and the risks which such an investment
may entail. IRBs have generally been issued under bond resolutions pursuant to
which the revenues and receipts payable under the arrangements with the operator
of a particular project have been assigned and pledged to purchasers. In some
cases, a mortgage on the underlying project may have been granted as security
for the IRBs. Regardless of the structure, payment of IRBs is solely dependent
upon the creditworthiness of the corporate operator of the project or corporate
guarantor. Corporate operators or guarantors may be affected by many factors
which may have an adverse impact on the credit quality of the particular company
or industry. These include cyclicality of revenues and earnings, regulatory and
environmental restrictions, litigation resulting from accidents or
environmentally caused illnesses, extensive competition and financial
deterioration resulting from a corporate restructuring pursuant to a leveraged
buy-out, takeover or otherwise. Such a restructuring may result in the operator
of a project becoming highly leveraged which may impact on such operator's
creditworthiness which in turn would have an adverse impact on the rating and/or
market value of such Bonds. Further, the possibility of such a restructuring may
have an adverse impact on the market for and consequently the value of such
Bonds, even though no actual takeover or other action is ever contemplated or
effected. See "The Trust -- General."
Certain of the Bonds in the Trusts may be obligations that are secured by
lease payments of a governmental entity (hereinafter called "lease
obligations"). Lease obligations are often in the form of certificates of
participation. In view of this, an investment in the Trust should be made with
an understanding of the characteristics of such issuers and the risks which such
an investment may entail. Although the lease obligations do not constitute
general obligations of the municipality for which the municipality's taxing
power is pledged, a lease obligation is ordinarily backed by the municipality's
covenant to appropriate for and make the payments due under the lease
obligation. However, certain lease obligations contain "non-appropriation"
clauses which provide that the municipality has no obligation to make lease
payments in future years unless money is appropriated for such purpose on a
yearly basis. A governmental entity that enters into such a lease agreement
cannot obligate future governments to appropriate for and make lease payments
but covenants to take such action as is necessary to include any lease payments
due in its budgets and to make the appropriations therefor. A governmental
entity's failure to appropriate for and to make payments under its lease
obligation could result in insufficient funds available for payment of the
obligations secured thereby. Although "non-appropriation" lease obligations are
secured by the leased property, disposition of the property in the event of
foreclosure might prove difficult. See "The Trust -- General."
Certain of the Bonds in the Trust may be obligations of issuers which are,
or which govern the operation of, schools, colleges and universities and whose
revenues are derived mainly from ad valorem taxes or, for higher education
systems, from tuition, dormitory revenues, grants and endowments. In view of
this, an investment in the Trust should be made with an understanding of the
characteristics of such issuers and the risks which such an investment may
entail. General problems relating to school bonds include litigation contesting
the state constitutionality of financing public education in part from ad
valorem taxes, thereby creating a disparity in educational funds available to
schools in wealthy areas and schools in poor areas. Litigation or legislation on
this issue may affect the sources of funds available for
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the payment of school bonds in the Trust. General problems relating to college
and university obligations include the prospect of a declining percentage of the
population consisting of "college" age individuals, possible inability to raise
tuitions and fees sufficiently to cover increased operating costs, the
uncertainty of continued receipt of Federal grants and state funding, and
government legislation or regulations which may adversely affect the revenues or
costs of such issuers. All of such issuers have been experiencing certain of
these problems in varying degrees. See "The Trust -- General."
Certain of the Bonds in the Trust may be obligations which are payable from
and secured by revenues derived from the ownership and operation of facilities
such as airports, bridges, turnpikes, port authorities, convention centers and
arenas. In view of this, an investment in the Trust should be made with an
understanding of the characteristics of such issuers and the risks which such an
investment may entail. The major portion of an airport's gross operating income
is generally derived from fees received from signatory airlines pursuant to use
agreements which consist of annual payments for leases, occupancy of certain
terminal space and service fees. Airport operating income may therefore be
affected by the ability of the airlines to meet their obligations under the use
agreements. The air transport industry is experiencing significant variations in
earnings and traffic, due to increased competition, excess capacity, increased
costs, deregulation, traffic constraints and other factors, and several airlines
are experiencing severe financial difficulties. The Sponsor cannot predict what
effect these industry conditions may have on airport revenues, which are
dependent for payment on the financial condition of the airlines and their usage
of the particular airport facility. Similarly, payment on Bonds related to other
facilities is dependent on revenues from the projects, such as user fees from
ports, tolls on turnpikes and bridges and rents from buildings. Therefore,
payment may be adversely affected by reduction in revenues due to such factors
as increased cost of maintenance, decreased use of facility, lower cost of
alternative modes of transportation, scarcity of fuel and reduction or loss of
rents. See "The Trust -- General."
Certain of the Bonds in the Trust may be obligations which are payable from
and secured by revenues derived from the operation of resource recovery
facilities. In view of this, an investment in the Trust should be made with an
understanding of the characteristics of such issuers and the risks which such an
investment may entail. Resource recovery facilities are designed to process
solid waste, generate steam and convert steam to electricity. Resource recovery
bonds may be subject to extraordinary optional redemption at par upon the
occurrence of certain circumstances, including but not limited to: destruction
or condemnation of a project; contracts relating to a project becoming void,
unenforceable or impossible to perform; changes in the economic availability of
raw materials, operating supplies or facilities necessary for the operation of a
project or technological or other unavoidable changes adversely affecting the
operation of a project; administrative or judicial actions which render
contracts relating to the projects void, unenforceable or impossible to perform;
or impose unreasonable burdens or excessive liabilities. The Sponsor cannot
predict the causes or likelihood of the redemption of resource recovery bonds in
the Trust prior to the stated maturity of the Bonds. See "The Trust -- General."
An investment in Units of the Trust should be made with an understanding of
the interest rate risk associated with such an investment. Generally, bond
prices (and therefore Unit prices) will move inversely with interest rates, and
bonds with longer maturities are likely to exhibit greater fluctuations in
market value, all other things being equal, than bonds with shorter maturities.
REDEMPTIONS OF BONDS. Certain of the Bonds in the Trust are subject to
redemption prior to their stated maturity date pursuant to sinking fund
provisions, call provisions or extraordinary optional or mandatory redemption
provisions or otherwise. A sinking fund is a reserve fund accumulated over a
period of time for retirement of debt. A callable debt obligation is one which
is subject to redemption or refunding prior to maturity at the option of the
issuer. A refunding is a method by which a debt
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obligation is redeemed, at or before maturity, by the proceeds of a new debt
obligation. In general, call provisions are more likely to be exercised when the
offering side valuation is at a premium over par than when it is at a discount
from par. The exercise of redemption or call provisions will (except to the
extent the proceeds of the called Bonds are used to pay for Unit redemptions)
result in the distribution of principal and may result in a reduction in the
amount of subsequent interest distributions and it may also affect the current
return on Units of the Trust. The Trust portfolio contains a listing of the
sinking fund and call provisions, if any, with respect to each of the Bonds.
Extraordinary optional redemptions and mandatory redemptions result from the
happening of certain events. Generally, events that may permit the extraordinary
optional redemption of Bonds or may require the mandatory redemption of Bonds
include, among others: the substantial damage or destruction by fire or other
casualty of the project for which the proceeds of the Bonds were used; an
exercise by a local, state or Federal governmental unit of its power of eminent
domain to take all or substantially all of the project for which the proceeds of
the Bonds were used; changes in the economic availability of raw materials,
operating supplies or facilities or technological or other changes which render
the operation of the project for which the proceeds of the Bonds were used
uneconomic; changes in law or an administrative or judicial decree which renders
the performance of the agreement under which the proceeds of the Bonds were made
available to finance the project impossible or which creates unreasonable
burdens or which imposes excessive liabilities, such as taxes, not imposed on
the date the Bonds are issued on the issuer of the Bonds or the user of the
proceeds of the Bonds; an administrative or judicial decree which requires the
cessation of a substantial part of the operations of the project financed with
the proceeds of the Bonds, an overestimate of the costs of the project to be
financed with the proceeds of the Bonds resulting in excess proceeds of the
Bonds which may be applied to redeem Bonds; or an underestimate of a source of
funds securing the Bonds resulting in excess funds which may be applied to
redeem Bonds. The Sponsor is unable to predict all of the circumstances which
may result in such redemption of an issue of Bonds. See "The Trust -- Schedule
of Investments" and footnote (3) in "The Trust -- Notes to Schedule of
Investments."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN
As of the opening of business on the Initial Date of Deposit, the Estimated
Current Return and the Estimated Long-Term Return were those indicated in the
"Summary of Essential Financial Information." The Estimated Current Return is
calculated by dividing the estimated net annual interest income per Unit by the
Public Offering Price. The estimated net annual interest income per Unit will
vary with changes in fees and expenses of the Trustee, Sponsor and Evaluator and
with the principal prepayment, redemption, maturity, exchange or sale of Bonds,
while the Public Offering Price will vary with changes in the offering price of
the underlying Bonds; therefore, there is no assurance that the present
Estimated Current Return will be realized in the future. Estimated Long-Term
Return is calculated using a formula which (i) takes into consideration, and
determines and factors in the relative weightings of, the market values, yields
(which takes into account the amortization of premiums and the accretion of
discounts) and estimated retirements of all the Bonds in the Trust and (ii)
takes into account a compounding factor and the expenses and sales charge
associated with each Trust Unit. Since the market values and estimated
retirements of the Bonds and the expenses of the Trust will change, there is no
assurance that the present Estimated Long-Term Return will be realized in the
future. Estimated Current Return and Estimated Long-Term Return are expected to
differ because the calculation of Estimated Long-Term Return reflects the
estimated date and amount of principal returned while Estimated Current Return
calculations include only net annual interest income and Public Offering Price.
In order to acquire certain of the Bonds contracted for by the Sponsor for
deposit in the Trust, it may be necessary for the Sponsor or Trustee to pay on
the settlement dates for delivery of such Bonds amounts covering accrued
interest on such Bonds which exceed (i) the amounts paid by Unitholders and
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(ii) the amounts which will be made available through cash furnished by the
Sponsor on the Initial Date of Deposit, which amount of cash may exceed the
interest which would accrue to the First Settlement Date. The Trustee has agreed
to pay for any amounts necessary to cover any such excess and will be reimbursed
therefor, without interest, when funds become available from interest payments
on the particular Bonds with respect to which such payments may have been made.
Also, since interest on any "when, as and if issued" Bonds does not begin
accruing as tax-exempt interest income to the benefit of Unitholders until their
respective dates of delivery, the Trustee may reduce its fee (and, to the extent
necessary, pay Trust expenses) in an amount equal to that indicated under
"Summary of Essential Financial Information," in order to maintain (or in some
cases approach) for the Unitholders the same estimated net annual interest
incomes during the first year of the Trust's operations as is indicated under
"Summary of Essential Financial Information."
TRUST OPERATING EXPENSES
COMPENSATION OF SPONSOR. Delaware Capital Management, Inc., which acts as
Sponsor, will receive a fee for providing portfolio supervision services in
amounts set forth under "Summary of Essential Financial Information." Such
charges will be payable in monthly installments based on the number of Units
outstanding on the first day of each month of each year. The Sponsor will also
be reimbursed for bookkeeping and administrative services in amounts as set
forth under "Summary of Essential Information." With respect to the fees payable
to the Sponsor for providing portfolio supervision and bookkeeping and other
administrative services to the Trust, such individual fees may exceed the actual
costs of providing such services for the Trust, but at no time will the total
amount paid to the Sponsor for providing such services rendered to all unit
investment trusts sponsored by Delaware Capital Management, Inc. or its
affiliates in any calendar year exceed the aggregate cost to the Sponsor and its
affiliates of supplying such services in such year. The foregoing fees may be
increased without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of Shelter"
in the Consumer Price Index published by the United States Department of Labor
or, if such category is no longer published, in a comparable category. The
Distributor, an affiliate of the Sponsor, will receive sales commissions and may
realize other profits (or losses) in connection with the sale of Units and the
Sponsor may realize profits (or may realize losses) in connection with the
deposit of the Bonds as described under "Public Offering -- Sponsor and
Distributor Compensation."
EVALUATOR'S FEE. For its services, the Evaluator will receive a fee as set
forth under "Summary of Essential Financial Information." The Evaluator's fees
are payable in monthly installments. The Evaluator's fees may be increased
without approval of the Unitholders by amounts not exceeding proportionate
increases under the category "All Services Less Rent of Shelter" in the Consumer
Price Index published by the United States Department of Labor or, if such
category is no longer published, in a comparable category.
TRUSTEE'S FEE. For its services, the Trustee will receive an annual fee as
set forth under "Summary of Essential Financial Information." The Trustee's fees
are payable in monthly installments (based on the outstanding principal amount
of Bonds in the Trust as of the first day of each month of each year) on or
before the fifteenth day of each month from the Interest Account to the extent
funds are available and then from the Principal Account. 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 the Trust to
meet scheduled distributions) and may be further increased without approval of
the Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor or, if such category is no
longer published, in a comparable category. Since the Trustee has the use of the
funds being held
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in the Principal and Interest Accounts for future distributions, payment of
expenses and redemptions and since such Accounts are non-interest bearing to
Unitholders, the Trustee benefits thereby. Part of the Trustee's compensation
for its services to the Fund is expected to result from the use of these funds.
For a discussion of the services rendered by the Trustee pursuant to its
obligations under the Trust Agreement, see "Rights of Unitholders -- Reports
Provided" and "Trust Administration."
MISCELLANEOUS EXPENSES. Expenses incurred in establishing the Trust,
including the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and charged off over a six month period from
the Initial Date of Deposit. The following additional charges are or may be
incurred by the Trust: (i) fees of the Trustee for extraordinary services, (ii)
expenses of the Trustee (including legal and auditing expenses) and of counsel
designated by the Sponsor, (iii) various governmental charges, (iv) expenses and
costs of any action taken by the Trustee to protect the Trust and the rights and
interests of Unitholders, (v) indemnification of the Trustee for any loss,
liability or expenses incurred by it in the administration of the Trust without
gross negligence, bad faith or willful misconduct on its part, (vi) any special
custodial fees payable in connection with the sale of any of the Bonds in the
Trust and (vii) expenditures incurred in contacting Unitholders upon termination
of the Trust.
The fees and expenses set forth herein are payable out of the Trust. When
such fees and expenses are paid by or owing to the Trustee, they are secured by
a lien on the portfolio or portfolios of the Trust. If the balances in the
Interest and Principal Accounts are insufficient to provide for amounts payable
by the Fund, the Trustee has the power to sell Bonds to pay such amounts.
INSURANCE ON THE BONDS IN THE TRUST
Insurance guaranteeing prompt payment of interest and principal, when due,
on the Bonds in the Trust has been obtained by the issuers or underwriters of
such Bonds.
An Insurer has issued a policy or policies of insurance covering each of
the Bonds in the Trust, each policy to remain in force until the payment in full
of such Bonds and whether or not the Bonds continue to be held by the Trust. By
the terms of each policy, the Insurer will unconditionally guarantee to the
holders or owners of the Bonds the payment, when due, required of the issuer of
the Bonds of an amount equal to the principal of and interest on the Bonds as
such payments shall become due, in the event such payments are not paid (except
that in the event of any acceleration of the due date of principal by reason of
mandatory or optional redemption, default or otherwise, the payments guaranteed
will be made in such amounts and at such times as would have been due had there
not been an acceleration). The Insurer will be responsible for such payments,
less any amounts received by the holders or owners of the Bonds from any trustee
for the bond issuers or from any other sources other than the Insurer. The
Insurers' policies relating to small industrial development bonds and pollution
control revenue bonds also guarantee the full and complete payments required to
be made by or on behalf of an issuer of Bonds pursuant to the terms of the Bonds
if there occurs an event which results in the loss of the tax-exempt status of
the interest on such Bonds, including principal, interest or premium payments,
if any, as and when thereby required. Each Insurer has indicated that its
insurance policies do not insure the payment of principal or interest on bonds
which are not required to be paid by the issuer thereof because the bonds were
not validly issued. However, as indicated under "Tax Status," the respective
issuing authorities have received opinions of bond counsel relating to the valid
issuance of each of the Bonds in the Trust. Each Insurer's policy also does not
insure against non-payment of principal of or interest on the Bonds resulting
from the insolvency, negligence or any other act or omission of the trustee or
other paying agent for the Bonds. Such policies are not covered
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by the property/casualty insolvency funds maintained by various states. The
policies are non-cancelable and the insurance premiums have been fully paid on
or prior to the date of deposit, either by the Sponsor or, if a policy has been
obtained by a Bond issuer, by such issuer.
Standard & Poor's rates all new issues insured by an Insurer "AAA Prime
Grade." Moody's rates all bond issues insured by an Insurer "Aaa." These ratings
independently reflect each company's current assessment of the creditworthiness
of each Insurer and its ability to pay claims on its policies of insurance. See
"Investment Objectives and Portfolio Selection." Any further explanation as to
the significance of either rating may be obtained only from the company which
issued the respective rating. Neither rating is a recommendation to buy, sell or
hold the Bonds, and such rating may be subject to revision or withdrawal at any
time by the respective issuer. Any downward revision or withdrawal of the rating
may have an adverse effect on the market price of the Bonds.
Because the insurance on the Bonds will be effective so long as the Bonds
are outstanding, such insurance will be taken into account in determining the
market value of the Bonds and therefore some value attributable to such
insurance will be included in the value of the Units of the Trust. The insurance
does not, however, guarantee the market value of the Bonds or of the Units.
TAX STATUS
At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exclusion of interest thereon from Federal gross
income were rendered by bond counsel to the respective issuing authorities.
Neither the Sponsor nor Chapman and Cutler have made any special review for the
Fund of the proceedings relating to the issuance of the Bonds or of the bases
for such opinions. If the interest on a Bond should be determined to be taxable,
the Bond would generally have to be sold at a substantial discount. In addition,
investors could be required to pay income tax on interest received prior to the
date on which interest is determined to be taxable.
Gain realized on the sale or redemption of the Bonds by the Trustee or of a
Unit by a Unitholder is includible in gross income for Federal income tax
purposes and may be includible in gross income for state tax purposes. (Such
gain does not include any amounts received in respect of accrued interest or
accrued original issue discount, if any). If a Bond is acquired with accrued
interest, that portion of the price paid for the accrued interest is added to
the tax basis of the Bond. When this accrued interest is received, it is treated
as a return of capital and reduces the tax basis of the Bond. If a Bond is
purchased for a premium, the amount of the premium is added to the tax basis of
the Bond. Bond premium is amortized over the remaining term of the Bond, and the
tax basis of the Bond is reduced each tax year by the amount of the premium
amortized in that tax year. For purposes of the following opinions, it is
assumed that each asset of the Trust is debt, the interest on which is excluded
for Federal income tax purposes.
In the opinion of Chapman and Cutler, counsel for the Sponsor, under
existing law as of the date of this Prospectus:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes and interest and accrued original issue
discount on Bonds which is excludable from gross income under the Internal
Revenue Code of 1986 (the "Code") will retain its status for Federal income
tax purposes when received by the Trust and when distributed to
Unitholders; however such interest may be taken into account in computing
the alternative minimum tax, an additional tax on branches of foreign
corporations and the environmental tax (the "Superfund Tax"), as noted
below;
2. Each Unitholder is considered to be the owner of a pro rata portion
of each asset of the Trust under subpart E, subchapter J of chapter 1 of
the Code and will have a taxable event when the Trust disposes of a Bond,
or when the Unitholder redeems or sells his Unit. If the Unitholder
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disposes of a Unit, he is deemed thereby to have disposed of his entire pro
rata interest in all assets of the Trust including his pro rata portion of
all the Bonds represented by the Unit. The Taxpayer Relief Act of 1997
includes provisions that treat certain transactions designed to reduce or
eliminate risk of loss and opportunities for gain as constructive sales for
purposes of recognition of gain (but not loss) and for purposes of
determining the holding period. Unitholders should consult their own tax
advisers with regard to any such constructive sale rules. Unitholders must
reduce the tax basis of their Units for their share of accrued interest
received by the Trust, if any, on Bonds delivered after the date the
Unitholders pay for their Units to the extent that such interest accrued on
such Bonds before the date the Trust acquired ownership of the Bonds (and
the amount of this reduction may exceed the amount of accrued interest paid
to the seller), and, consequently, such Unitholders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such
Units. Gain or loss upon the sale or redemption of Units is measured by
comparing the proceeds of such sale or redemption with the adjusted basis
of the Units. If the Trustee disposes of Bonds (whether by sale, payment on
maturity, redemption or otherwise), gain or loss is recognized to the
Unitholder (subject to various non-recognition provisions of the Code). The
amount of any such gain or loss is measured by comparing the Unitholder's
pro rata share of the total proceeds from such disposition with the
Unitholder's basis for his or her fractional interest in the asset disposed
of. In the case of a Unitholder who purchases Units, such basis (before
adjustment for accrued original issue discount and amortized bond premium,
if any) is determined by apportioning the cost of the Units among each of
the Trust assets ratably according to value as of the valuation date
nearest the date of acquisition of the Units. Unitholders should consult
their own tax advisors with regard to the calculation of basis. The tax
basis reduction requirements of the Code relating to amortization of bond
premium may, under some circumstances, result in the Unitholder realizing a
taxable gain when his Units are sold or redeemed for an amount less than or
equal to his original cost; and
3. Any proceeds paid under individual policies obtained by issuers of
Bonds which represent maturing interest on defaulted Bonds held by the
Trustee will be excludable from Federal gross income if, and to the same
extent as, such interest would have been excludable if paid in the normal
course by the issuer of the defaulted Bonds provided that, at the time such
policies are purchased, the amounts paid for such policies are reasonable,
customary and consistent with the reasonable expectation that the issuer of
the Bonds, rather than the Insurer, will pay debt service on the Bonds.
Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original issue
discount accrues either on the basis of a constant compound interest rate or
ratably over the term of the Bond, depending on the date the Bond was issued. In
addition, special rules apply if the purchase price of a Bond exceeds the
original issue price plus the amount of original issue discount which would have
previously accrued based upon its issue price (its "adjusted issue price") to
prior owners. If a Bond is acquired with accrued interest, that portion of the
price paid for the accrued interest is added to the tax basis of the Bond. When
this accrued interest is received, it is treated as a return of capital and
reduces the tax basis of the Bond. If a Bond is purchased for a premium, the
amount of the premium is added to the tax basis of the Bond. Bond premium is
amortized over the remaining term of the Bond, and the tax basis of the Bond is
reduced each tax year by the amount of the premium amortized in that tax year.
The application of these rules will also vary depending on the value of the
Bonds on the date a Unitholder acquires his Units and the price the Unitholder
pays for his Units. Unitholders should consult with their tax advisers regarding
these rules and their application.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects
tax-exempt bonds to the market discount rules of the Code effective for bonds
purchased after April 30, 1993. In general, market discount is the amount (if
any) by which the stated redemption price at maturity exceeds an investor's
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purchase price (except to the extent that such difference, if any, is
attributable to original issue discount not yet accrued) subject to a statutory
DE MINIMIS rule. Market discount can arise based on the price a Trust pays for
Bonds or the price a Unitholder pays for his or her Units. Under the Tax Act,
accretion of market discount is taxable as ordinary income; under prior law the
accretion had been treated as capital gain. Market discount that accretes while
a Trust holds a Bond would be recognized as ordinary income by the Unitholders
when principal payments are received on the Bond, upon sale or at redemption
(including early redemption), or upon the sale or redemption of his or her
Units, unless a Unitholder elects to include market discount in taxable income
as it accrues. The market discount rules are complex and Unitholders should
consult their tax advisers regarding these rules and their application.
In the case of certain corporations, the alternative minimum tax and the
Superfund Tax for taxable years beginning after December 31, 1986 depend upon
the corporation's alternative minimum taxable income ("AMTI"), which is the
corporation's taxable income with certain adjustments. One of the adjustment
items used in computing the AMTI of a corporation (other than an S Corporation,
Regulated Investment Company, Real Estate Investment Trust, REMIC or FASIT) is
an amount equal to 75% of the excess of such corporation's "adjusted current
earnings" over an amount equal to its AMTI (before such adjustment item and the
alternative tax net operating loss deduction). "Adjusted current earnings"
includes all tax exempt interest, including interest on all of the Bonds in the
Trust. Under current code provisions, the Superfund Tax does not apply to tax
years beginning on or after January 1, 1996. Legislative proposals have been
introduced that would reinstate the Superfund Tax for taxable years beginning
after December 31, 1997 and before January 1, 2009. Under the provisions of
Section 884 of the Code, a branch profits tax is levied on the "effectively
connected earnings and profits" of certain foreign corporations which include
tax-exempt interest such as interest on the Bonds in the Trust. Unitholders
should consult their tax advisers with respect to the particular tax
consequences to them including the corporate alternative minimum tax, the
Superfund Tax and the branch profits tax imposed by Section 884 of the Code.
Counsel for the Sponsor has also advised that under Section 265 of the Code
interest on indebtedness incurred or continued to purchase or carry Units of the
Trust is not deductible for Federal income tax purposes. The Internal Revenue
Service has taken the position that such indebtedness need not be directly
traceable to the purchase or carrying of Units (however, these rules generally
do not apply to interest paid on indebtedness incurred to purchase or improve a
personal residence). Also, under Section 265 of the Code, certain financial
institutions that acquire Units would generally not be able to deduct any of the
interest expense attributable to ownership of such Units. Legislative proposals
have been made that would extend the financial institution rules to certain
other corporations, including securities dealers and other financial
intermediaries. Investors with questions regarding these issues should consult
with their tax advisers.
In the case of certain of the Bonds in the Trust, the opinions of bond
counsel indicate that interest on such Bonds received by a "substantial user" of
the facilities being financed with the proceeds of these Bonds, or persons
related thereto, for periods while such Bonds are held by such a user or related
person, will not be excludible from Federal gross income, although interest on
such Bonds received by others would be excludible from Federal gross income.
"Substantial user" and "related person" are defined under the Code and U.S.
Treasury Regulations. Any person who believes that he or she may be a
"substantial user" or a "related person" as so defined should contact his or her
tax adviser.
ALL STATEMENTS OF LAW IN THE PROSPECTUS CONCERNING EXCLUSION FROM GROSS
INCOME FOR FEDERAL, STATE OR OTHER TAX PURPOSES ARE THE OPINIONS OF COUNSEL AND
ARE TO BE SO CONSTRUED.
At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exclusion of interest thereon from Federal gross
income are rendered by bond counsel to the respective
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issuing authorities. Neither the Sponsor nor Chapman and Cutler has made any
special review for the Fund of the proceedings relating to the issuance of the
Bonds or of the basis for such opinions.
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% or 20%,
depending upon the holding periods of the capital assets. Capital gain or loss
is long-term if the holding period for the asset is more than one year, and is
short-term if the holding period for the asset is one year or less. 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). 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 tax years
ending after May 6, 1997.
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. Unit holders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
For purposes of computing the alternative minimum tax for individuals and
corporations and the Superfund Tax for corporations, interest on certain private
activity bonds (which includes most industrial and housing revenue bonds) issued
on or after August 8, 1996 is included as an item of tax preference. However,
the assets of the Trust do not include any such private activity bonds issued on
or after that date.
In general, Section 86 of the Code, provides that 50% of Social Security
benefits are includible in gross income to the extent that the sum of "modified
adjusted gross income" plus 50% of the Social Security benefits received exceeds
a "base amount." The base amount is $25,000 for unmarried taxpayers, $32,000 for
married taxpayers filing a joint return and zero for married taxpayers who do
not live apart at all times during the taxable year and who file separate
returns. Modified adjusted gross income is adjusted gross income determined
without regard to certain otherwise allowable deductions and exclusions from
gross income and by including tax-exempt interest. To the extent that Social
Security benefits are includible in gross income, they will be treated as any
other item of gross income.
In addition, under the Tax Act, for taxable years beginning after December
31, 1993, up to 85% of Social Security benefits are includible in gross income
to the extent that the sum of "modified adjusted gross income" plus 50% of
Social Security benefits received exceeds an "adjusted base amount." The
adjusted base amount is $34,000 for unmarried taxpayers, $44,000 for married
taxpayers filing a joint return, and zero for married taxpayers who do not live
apart at all times during the taxable year and who file separate returns.
Although tax-exempt interest is included in modified adjusted gross income
solely for the purpose of determining what portion, if any, of Social Security
benefits will be included in gross income, no tax-exempt interest, including
that received from the Trust, will be subject to tax. A taxpayer whose adjusted
gross income already exceeds the base amount or the adjusted base amount must
include 50% or 85%, respectively, of his Social Security benefits in gross
income whether or not he receives any tax-exempt interest. A taxpayer whose
modified adjusted gross income (after inclusion of tax-exempt interest) does not
exceed the base amount need not include any Social Security benefits in gross
income.
Ownership of the Units may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, corporations
subject to either the environmental tax, the branch
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profits tax, financial institutions, certain insurance companies, certain S
corporations, individual recipients of Social Security or Railroad Retirement
benefits and taxpayers who may be deemed to have incurred (or continued)
indebtedness to purchase or carry tax-exempt obligations. Prospective investors
should consult their tax advisors as to the applicability of any collateral
consequences.
PUBLIC OFFERING
GENERAL. Units are offered at the Public Offering Price. During the initial
offering period the Public Offering Price is based on the offering prices of the
Bonds in the Trust and includes a sales charge of 2.0% of the Public Offering
Price (2.041% of the aggregate offering price of the Bonds) plus any accrued
interest. In the secondary market, the Public Offering Price is based on the bid
prices of the Bonds in the Trust and includes a sales charge of 5.5% of the
Public Offering Price (5.820% of the aggregate bid price of the Bonds) plus any
accrued interest.
IF THE BONDS IN THE TRUST WERE AVAILABLE FOR DIRECT PURCHASE BY INVESTORS,
THE PURCHASE PRICE OF THE BONDS WOULD NOT INCLUDE THE SALES CHARGE INCLUDED IN
THE PUBLIC OFFERING PRICE OF THE UNITS. THE SALES CHARGES AND EXPENSES
ASSOCIATED WITH PURCHASES OF UNITS OF THE TRUST MAY BE IN EXCESS OF THE CHARGES
AND EXPENSES AN INVESTOR WOULD INCUR IF THE INVESTOR HAD ELECTED TO INDIVIDUALLY
DIRECTLY ACQUIRE THE BONDS OR TO INVEST IN OTHER ALTERNATIVE INVESTMENTS, BUT
SUCH ALTERNATIVES WOULD NOT HAVE ALL THE FEATURES OF A UNIT INVESTMENT TRUST.
ACCRUED INTEREST. Accrued interest is the accumulation of unpaid interest
on a bond from the last day on which interest thereon was paid. Interest on
Bonds generally is paid semi-annually, although the Trust accrues such interest
daily. Because of this, the Trust always has an amount of interest earned but
not yet collected by the Trustee. For this reason, with respect to sales
settling subsequent to the First Settlement Date, the Public Offering Price of
Units will have added to it the proportionate share of accrued interest to the
date of settlement. Unitholders will receive on the next distribution date of
the Trust the amount, if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would otherwise
have to be paid in addition to the Public Offering Price in the sale of Units to
the public, the Trustee will advance the amount of accrued interest as of the
First Settlement Date and the same will be distributed to the Distributor as the
Unitholder of record as of the First Settlement Date. Consequently, the amount
of accrued interest to be added to the Public Offering Price of Units will
include only accrued interest from the First Settlement Date to the date of
settlement, less any distributions from the Interest Account subsequent to the
First Settlement Date. See "Rights of Unitholders -- Distributions of Interest
and Principal."
Because of the varying interest payment dates of the Bonds, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trust and distributed to Unitholders. Therefore, there
will always remain an item of accrued interest that is added to the value of the
Units. If a Unitholder sells or redeems all or a portion of his Units, he will
be entitled to receive his proportionate share of the accrued interest from the
purchaser of his Units. Since the Trustee has the use of the funds held in the
Interest Account for distributions to Unitholders and since such Account is
noninterest-bearing to Unitholders, the Trustee benefits thereby.
OFFERING PRICE. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in accordance
with fluctuations in the prices of the underlying Bonds in the Trust.
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As indicated above, the price of the Units as of the opening of business on
the Initial Date of Deposit was determined by adding to the determination of the
aggregate offering price of the Bonds an amount equal to 2.041% of such value
and dividing the sum so obtained by the number of Units outstanding. This
computation produced a gross underwriting profit equal to 2.0% of the Public
Offering Price. Such price determination as of 11:00 a.m. Eastern Time on the
business day before the Initial Date of Deposit was made on the basis of an
evaluation of the Bonds in the Trust prepared by Muller Data Corporation, a firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities. Except as of the opening of business on the Initial Date
of Deposit, during the initial offering period, the Evaluator will appraise or
cause to be appraised daily the value of the underlying Bonds as of the close of
trading on the New York Stock Exchange (generally 4:00 P.M. Eastern Time) on
days the New York Stock Exchange is open (or as of any earlier closing time on a
day on which the New York Stock 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. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on the New York
Stock Exchange on each such day (or as of any earlier closing time on a day on
which the New York Stock Exchange is scheduled in advance to close at such
earlier time). Orders received by the Trustee, Distributor or any dealer for
purchases, sales or redemptions after that time, or on a day when the New York
Stock Exchange is closed, will be held until the next determination of price.
For secondary market sales, the Public Offering Price per Unit will be equal to
the aggregate bid price of the Bonds in the Trust plus the secondary market
sales charge. For secondary market purposes, such appraisal and adjustment will
be made by the Evaluator as of the close of trading on the New York Stock
Exchange on days on which the New York Stock Exchange is open (or as of any
earlier closing time on a day on which the New York Stock Exchange is schedule
in advance to close at such earlier time) for each day on which any Unit of the
Trust is tendered for redemption, and it shall determine the aggregate value of
the Trust as of the close of trading on the New York Stock Exchange (or as of
any earlier closing time on a day on which the New York Stock Exchange is
scheduled in advance to close at such earlier time) on such other days as may be
necessary.
The aggregate price of the Bonds in the Trust has been and will be
determined on the basis of bid prices or offering prices, as appropriate, (i) on
the basis of current market prices for the Bonds obtained from dealers or
brokers who customarily deal in bonds comparable to those held by the Trust;
(ii) if such prices are not available for any particular Bonds, on the basis of
current market prices for comparable bonds; (iii) by causing the value of the
Bonds to be determined by others engaged in the practice of evaluation, quoting
or appraising comparable bonds; or (iv) by any combination of the above.
The initial or primary Public Offering Price of the Units and the
Distributor's initial repurchase price per Unit are based on the offering price
per Unit of the underlying Bonds plus the applicable sales charge plus interest
accrued but unpaid from the First Settlement Date to the date of settlement. The
secondary market Public Offering Price and the Redemption Price per Unit are
based on the bid price per Unit of the Bonds in the Trust plus the applicable
sales charge plus accrued interest. The offering price of Bonds in the Trust may
be expected to range from .35%-1% more than the bid price of such Bonds. On the
Initial Date of Deposit, the offering side evaluation of the Bonds in the Trust
were higher than the bid side evaluation of such Bonds by the amount indicated
under footnote (5) in "The Trust -- Notes to Schedule of Investments." This
amount constitutes profit to the Sponsor (see "Sponsor and Distributor
Compensation").
Although payment is normally made three business days following the order
for purchase, payment may be made prior thereto. However, delivery of
certificates, if any are requested in writing, representing Units so ordered
will be made as soon as possible following such order or shortly thereafter. A
person will become the owner of Units on the date of settlement provided payment
has been received. Cash, if any, made available to the Distributor prior to the
date of settlement for the purchase of Units may be
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used in the Distributor's business and may be deemed to be a benefit to the
Distributor, subject to the limitations of the Securities Exchange Act of 1934.
UNIT DISTRIBUTION. During the initial offering period, Units will be
distributed to the public by broker-dealers and others at the Public Offering
Price, plus accrued interest computed as described above. Upon the completion of
the initial offering, Units repurchased in the secondary market, if any, may be
offered by this prospectus at the secondary Public Offering Price in the manner
described.
Broker-dealers or others will be allowed a concession or agency commission
in connection with the distribution of Units during the initial offering period
equal to $.15 per Unit and in the secondary market equal to 4.0% of the Public
Offering Price per Unit. Certain commercial banks may make Units of the Fund
available to their customers on an agency basis. A portion of the sales charge
(equal to the agency commission referred to above) is retained by or remitted to
the banks. Under the Glass-Steagall Act, banks are prohibited from underwriting
Units of the Fund; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have not indicated that these particular
agency transactions are not permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations of Federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
The Distributor reserves the right to reject, in whole or in part, any
order for the purchase of Units and to change the amount of the concession or
agency commission to dealers and others from time to time. To facilitate the
handling of transactions, sales of Units shall normally be limited to
transactions involving a minimum of $1,000.
At various times the Distributor may implement programs under which the
sales forces of brokers, dealers, banks and/or others may be eligible to win
nominal awards for certain sales efforts, or under which the Distributor will
reallow to any such brokers, dealers, banks and/or others that sponsor sales
contests or recognition programs conforming to criteria established by the
Distributor, or participate in sales programs sponsored by the Distributor, an
amount not exceeding the total applicable sales charges on the sales generated
by such person at the public offering price during such programs. Also, the
Distributor in its discretion may from time to time pursuant to objective
criteria established by the Distributor pay fees to qualifying brokers, dealers,
banks or others for certain services or activities which are primarily intended
to result in sales of Units of the Trust. Such payments are made by the
Distributor out of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unitholders pay for their Units or the amount
that the Trust will receive from the Units sold.
SPONSOR AND DISTRIBUTOR COMPENSATION. The Distributor will receive the
gross sales commission equal to 2.0% of the Public Offering Price of the Units
(2.041% of the net amount invested).
In addition, the Sponsor will realize a profit or will sustain a loss, as
the case may be, as a result of the difference between the price paid for the
Bonds by the Sponsor and the cost of such Bonds to the Trust (which is based on
the determination of the aggregate offering price of the Bonds in the Trust on
the Initial Date of Deposit as prepared by Muller Data Corporation). See "The
Trust -- Schedule of Investments" and footnote (5) thereto. Neither the Sponsor,
the Distributor, nor their affiliates have participated as sole underwriter or
as a manager or as a member of an underwriting syndicate from which any of the
Bonds in the portfolio of the Trust were acquired. The Distributor may further
realize additional profit or loss during the initial offering period as a result
of the possible fluctuations in the market value of the Bonds in the Trust after
the Initial Date of Deposit, since all proceeds received from purchasers of
Units (excluding dealer concessions or agency commissions allowed, if any) will
be retained by the Distributor.
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As stated under "Public Market" below, the Distributor intends, but is not
obligated, to maintain a secondary market for the Units of the Fund. In so
maintaining a market, the Distributor 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 is based on the
bid prices of the Bonds in the Trust and includes a sales charge). In addition,
the Distributor will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
PUBLIC MARKET. During the initial public offering period, the Distributor
intends to offer to purchase Units at a price based on the aggregate offering
price per Unit of the Bonds in the Trust plus accrued interest to the date of
settlement. Afterward, although not obligated to do so, the Distributor intends
to maintain a market for the Units offered hereby and to offer continuously to
purchase such Units at the bid price of the Bonds in the portfolio plus interest
accrued to the date of settlement plus any principal cash on hand, less any
amounts representing taxes or other governmental charges payable out of the
Trust and less any accrued Trust expenses. If the supply of Units exceeds demand
or if some other business reason warrants it, the Distributor may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. In the event that a market is not maintained for the Units and the
Unitholder cannot find another purchaser, a Unitholder desiring to dispose of
his Units may dispose of such Units by tendering them to the Trustee for
redemption at the Redemption Price, which is based upon the aggregate bid price
of the Bonds in the portfolio and any accrued interest. The aggregate bid prices
of the underlying Bonds in the Trust are expected to be less than the related
aggregate offering prices. See "Rights of Unitholders -- Redemption of Units." A
UNITHOLDER WHO WISHES TO DISPOSE OF HIS UNITS SHOULD INQUIRE OF HIS BROKER AS TO
CURRENT MARKET PRICES IN ORDER TO DETERMINE WHETHER THERE IS IN EXISTENCE ANY
PRICE IN EXCESS OF THE REDEMPTION PRICE AND, IF SO, THE AMOUNT THEREOF.
RIGHTS OF UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trust will not be evidenced
by certificates unless a Unitholder, the Unitholder's registered broker/dealer
or the clearing agent for such broker/dealer makes a written request to the
Trustee. Certificates, if issued, will be so noted on the confirmation statement
sent to the broker. Non-receipt of such certificate(s) must be reported to the
Trustee within one year; otherwise, a 2% surety bond fee will be required for
replacement.
Units are transferable by making a written request to the Trustee and, in
the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee program in addition to, or in substitution for, STAMP, as
may be accepted by the Trustee.
Although no such charge is now made or contemplated, the Trustee may
require a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.
DISTRIBUTIONS OF INTEREST AND PRINCIPAL. Interest received by the Trust,
including that part of the proceeds of any disposition of Bonds which
represents accrued interest and including any insurance
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proceeds representing interest due on defaulted Bonds, is credited by the
Trustee to the Interest Account. Other receipts are credited to the Principal
Account. Interest received by the Trust after deduction of amounts sufficient to
reimburse the Trustee for any amounts advanced and paid to the Distributor as
the Unitholder of record as of the First Settlement Date (see "Public Offering
- -- Offering Price") will be distributed on or shortly after the fifteenth day of
each month on a pro rata basis to Unitholders of record as of the preceding
record date (which will be the first day of the month). All distributions will
be net of applicable expenses. The pro rata share of cash in the Principal
Account will be computed as of the applicable record date, and distributions to
the Unitholders as of such record date will be made on or shortly after the
fifteenth day of such month. Proceeds received from the disposition of any of
the Bonds after such record date and prior to the following distribution date
will be held in the Principal Account and not distributed until the next
distribution date. The Trustee is not required to pay interest on funds held in
the Principal or Interest Accounts (but may itself earn interest thereon and
therefore benefits from the use of such funds) nor to make a distribution from
the Principal Account unless the amount available for distribution shall equal
at least $0.01 per Unit.
The distribution to the Unitholders as of each record date after the First
Settlement Date will be made on the following distribution date or shortly
thereafter and shall consist of an amount substantially equal to one twelfth of
the Unitholders' pro rata share of the estimated net annual unit income in the
Interest Account after deducting estimated expenses. Because interest payments
are not received by the Trust at a constant rate throughout the year, such
interest distribution may be more or less that the amount credited to the
Interest Account as of the record date. For the purpose of minimizing
fluctuation in the distributions from the Interest Account, the Trustee is
authorized to advance such amounts as may be necessary to provide interest
distributions of approximately equal amounts. The Trustee shall be reimbursed
for any such advances from funds in the Interest Account on the ensuing record
date. 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.
As of the first day of each month, the Trustee will deduct from the
Interest Account and, to the extent funds are not sufficient therein, from the
Principal Account, amounts necessary to pay the expenses of the Trust (as
determined on the basis set forth under "Trust Operating Expenses"). The Trustee
also may withdraw from said accounts such amounts, if any, as it deems necessary
to establish a reserve for any governmental charges or extraordinary charges
payable out of the Trust. Amounts so withdrawn shall not be considered a part of
the Trust's assets until such time as the Trustee shall return all or any part
of such amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Interest and Principal Accounts such amounts as may be
necessary to cover purchases of Replacement Bonds and redemption of Units by the
Trustee.
REINVESTMENT OPTION. Unitholders of the Trust may elect to have each
distribution of interest income, capital gains and/or principal on their Units
automatically reinvested in shares of any mutual fund in the Delaware
Investments Family of Mutual Funds which are registered in the Unitholder's
state of residence. Such mutual funds are hereinafter collectively referred to
as the "Reinvestment Funds."
Each Reinvestment Fund has investment objectives which differ from those of
the Trust. The prospectus relating to each Reinvestment Fund describes the
investment policies of such fund and sets forth the procedures to follow to
commence reinvestment. A Unitholder should obtain a prospectus for the
respective Reinvestment Fund by writing to Delaware Distributors, L.P. at 1818
Market Street, Philadelphia, Pennsylvania 19103, or by phone at 800-362-7500.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units will,
on the applicable distribution date, automatically
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be applied, as directed by such person, as of such distribution date by the
Trustee to purchase shares (or fractions thereof) of the applicable Reinvestment
Fund at a net asset value as computed as of the next end of a "business day," as
defined in the Reinvestment Fund's prospectus.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next
succeeding distribution date, by so notifying the Trustee in writing, elect to
terminate his or her reinvestment plan and receive future distributions on his
or her Units in cash. There will be no charge or other penalty for such
termination. Each Reinvestment Fund, its principal underwriter and its
investment adviser shall have the right to terminate at any time the
reinvestment plan relating to such fund.
REPORTS PROVIDED. The Trustee shall furnish Unitholders of the Trust in
connection with each distribution a statement of the amount of interest and, if
any, the amount of other receipts being distributed expressed in each case as a
dollar amount representing the pro rata share of each Unit of the Trust
outstanding. For as long as the Sponsor deems it to be in the best interests of
the Unitholders, the accounts of the Trust shall be audited, not less frequently
than annually, by independent certified public accountants and the report of
such accountants shall be furnished by the Trustee to Unitholders of the Trust
upon request. 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 the Trust a statement (i) as to the
Interest Account: interest received (including amounts representing interest
received upon any disposition of the Bonds) and the percentage of such amount by
states and territories in which the issuers of such Bonds are located,
deductions for applicable taxes and for fees and expenses of the Trust, for
purchases of Replacement Bonds and for redemptions of Units, if any,
reservations made by the Trustee, if any, and the balance remaining after such
distributions and deductions, expressed in each case both as a total dollar
amount and as a dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; (ii) as to the
Principal Account: the dates of disposition of any Bonds and the net proceeds
received therefrom (excluding any portion representing accrued interest), the
amount paid for purchases of Replacement Bonds and for redemptions of Units, if
any, reservations made by the Trustee, if any, deductions for payment of
applicable taxes, fees and expenses of the Trust and the balance remaining after
such distributions and deductions expressed both as a total dollar amount and as
a dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Bonds held and the
number of Units outstanding on the last business day of such calendar year; (iv)
the Redemption Price per Unit based upon the last computation thereof made
during such calendar year; and (v) amounts actually distributed during such
calendar year from the Interest and Principal Accounts, separately stated,
expressed both as total dollar amounts and as dollar amounts representing the
pro rata share of each Unit outstanding.
In order to comply with Federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Bonds in the Trust furnished to it by the Evaluator.
REDEMPTION OF UNITS. A Unitholder who does not dispose of Units in the
secondary market described above may cause Units to be redeemed by the Trustee
by making a written request to the Trustee, at its unit investment trust office,
The Chase Manhattan Bank, Bowling Green Station, P.O. Box 5185, New York, NY
10274-5185 and, in the case of Units evidenced by a certificate, by tendering
such certificate to the Trustee, properly endorsed or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Trustee.
Unitholders must sign the request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and on any
certificate representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the
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proceeds are payable to the Unitholder(s) of record at the address of record, no
signature guarantee is necessary for redemptions by individual account owners
(including joint owners). Additional documentation may be requested, and a
signature guarantee is always required, from corporations, executors,
administrators, trustees, guardians or associations. The signatures must be
guaranteed by a participant in the STAMP or such other guarantee program in
addition to, or in substitution for, STAMP, as may be accepted by the Trustee. A
certificate should only be sent by registered or certified mail for the
protection of the Unitholder. Since tender of the certificate is required for
redemption when one has been issued, Units represented by a certificate cannot
be redeemed until the certificate representing such Units has been received by
the purchasers. The Trustee's toll-free number for customer assistance is
1-800-428-8890, available 9:00 a.m. to 5:00 p.m. EST any business day.
Redemption shall be made by the Trustee on the third business day following
the day on which a tender for redemption is received (the "Redemption Date").
Such redemption shall be made by payment of cash, equivalent to the Redemption
Price for the Trust, determined as set forth below as of the evaluation time
stated under "Summary of Essential Financial Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be cancelled and any undivided fractional interest in the Trust
extinguished. The price received upon redemption might be more or less than the
amount paid by the Unitholder depending on the value of the Bonds in the Trust
at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee will
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. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a return. Under normal circumstances the Trustee
obtains the Unitholder's tax identification number from the selling broker.
However, at any time a Unitholder elects to tender Units for redemption, such
Unitholder should provide a tax identification number to the Trustee in order to
avoid this possible "back-up withholding" in the event the Trustee has not been
previously provided such number.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account or, if the balance therein is insufficient, from the Principal Account.
All other amounts will be withdrawn from the Principal Account. The Trustee is
empowered to sell underlying Bonds in order to make funds available for
redemption. Units so redeemed shall be cancelled.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the bid price of the Bonds in
the Trust, while the initial and primary Public Offering Price of Units will be
determined on the basis of the offering price of the Bonds, as of the close of
trading on the New York Stock Exchange (or as of any earlier closing time on a
day on which the New York Stock Exchange is schedule in advance to close at such
earlier time) on days of trading on the New York Stock Exchange on the date any
such determination is made. On the Initial Date of Deposit, the Public Offering
Price per Unit (which is based on the offering prices of the Bonds and includes
the sales charge) exceeded the value at which Units could have been redeemed
(based upon the current bid prices of the Bonds in the Trust) by the amount
shown under "Summary of Essential Financial Information." While the Trustee has
the power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which determines
the price per Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in the Trust determined on the basis of (i) the cash on
hand in the Trust or monies in the process of being collected, (ii) the value of
the Bonds in the Trust based on the bid prices of the Bonds (including "when
issued" contracts, if any) and (iii) interest accrued thereon, less (a) amounts
representing taxes or other governmental charges payable out of the Trust and
(b) the accrued expenses of the Trust. The Evaluator
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<PAGE>
may determine the value of the Bonds in the Trust by employing any of the
methods set forth in "Public Offering -- Offering Price."
The price at which Units may be redeemed could be less than the price paid
by the Unitholder and may be less than the par value of the Bonds represented by
the Units so redeemed. As stated above, the Trustee may sell Bonds to cover
redemptions. When Bonds are sold, the size of the Trust will be, and the
diversity may be, reduced. Such sales may be required at a time when Bonds would
not otherwise be sold and might result in lower prices than might otherwise be
realized.
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 that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Bonds in
the Trust is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. 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.
TRUST ADMINISTRATION
DISTRIBUTOR PURCHASES OF UNITS. The Trustee shall notify the Distributor of
any tender of Units for redemption. If the Distributor's bid in the secondary
market at that time equals or exceeds the Redemption Price per Unit, it may
purchase such Units by notifying the Trustee before the close of business on the
date of such notification and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by the
Trustee. Units held by the Distributor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Distributor will be in
accord with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Distributor, which likewise will bear any loss
resulting from a lower offering or redemption price subsequent to its
acquisition of such Units.
PORTFOLIO ADMINISTRATION. The Trustee is empowered to sell, for the purpose
of redeeming Units tendered by any Unitholder, and for the payment of expenses
for which funds may not be available, such of the Bonds designated by the
Sponsor as the Trustee in its sole discretion may deem necessary. The Sponsor,
in designating such Bonds, will consider a variety of factors, including (i)
interest rates, (ii) market value and (iii) marketability. The Sponsor may
direct the Trustee to dispose of Bonds in the event there is a decline in price
or the occurrence of other market or credit factors, including advance refunding
(i.e., the issuance of refunding securities and the deposit of the proceeds
thereof in trust or escrow to retire the refunded securities on their respective
redemption dates), so that in the opinion of the Sponsor the retention of such
Securities would be detrimental to the interest of the Unitholders.
The Sponsor is required to instruct the Trustee to reject any offer made by
an issuer of any of the Bonds to issue new obligations in exchange or
substitution for any Bond pursuant to a refunding or refinancing plan, except
that the Sponsor may instruct the Trustee to accept or reject such an offer or
to take any other action with respect thereto as the Sponsor may deem proper if
(i) the issuer is in default with respect to such Bond or (ii) in the written
opinion of the Sponsor the issuer will probably default with respect to such
Bond in the reasonably foreseeable future. Any obligation so received in
exchange or substitution will be held by the Trustee subject to the terms and
conditions of the Trust Agreement to the same extent as Bonds originally
deposited thereunder. Within five days after the deposit of obligations in
exchange or substitution for underlying Bonds, the Trustee is required to give
notice thereof to each Unitholder, identifying the Bonds eliminated and the
Bonds substituted therefor. Except as stated herein and under "The Fund --
Replacement Bonds" regarding the substitution of Replacement
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<PAGE>
Bonds for Failed Bonds, the acquisition by the Trust of any obligations other
than the Bonds initially deposited is not permitted.
If any default in the payment of principal or interest on any Bond occurs
and no provision for payment is made therefor within 30 days, the Trustee is
required to notify the Sponsor thereof. If the Sponsor fails to instruct the
Trustee to sell or to hold such Bond within 30 days after notification by the
Trustee to the Sponsor of such default, the Trustee may in its discretion sell
the defaulted Bond and not be liable for any depreciation or loss thereby
incurred.
AMENDMENT OR TERMINATION. The Sponsor and the Trustee have the power to
amend the Trust Agreement without the consent of any of the Unitholders when
such an amendment is (i) to cure an ambiguity or to correct or supplement any
provision of the Trust Agreement which may be defective or inconsistent with any
other provision contained therein or (ii) to make such other provisions as shall
not adversely affect the interest of the Unitholders (as determined in good
faith by the Sponsor and the Trustee), provided that the Trust Agreement may not
be amended to increase the number of Units issuable thereunder or to permit the
deposit or acquisition of obligations either in addition to or in substitution
for any of the Bonds initially deposited in the Trust, except for the
substitution of certain refunding obligations for such Bonds, for Replacement
Bonds and for subsequent deposits (see "The Fund"). In the event of any
amendment requiring the consent of Unitholders, the Trustee is obligated to
notify promptly all Unitholders of the substance of such amendment.
The Trust may be terminated at any time by consent of Unitholders
representing 66-2/3% of the Units of the Trust then outstanding or by the
Trustee when the value of the Trust, as shown by any semi-annual evaluation, is
less than the minimum value indicated under "Summary of Essential Financial
Information." The Trust will be liquidated by the Trustee in the event that a
sufficient number of Units not yet sold are tendered for redemption by the
underwriters, including the Distributor, so that the net worth of such Trust
would be reduced to less than 40% of the initial principal amount of the Trust.
If the Trust is liquidated because of the redemption of unsold Units by the
underwriters, the Distributor will refund to each purchaser of Units the entire
sales charge paid by such purchaser.
The Trust Agreement provides that the Trust shall terminate upon the
redemption, sale or other disposition of the last Bond held in the Trust, but in
no event shall it continue beyond the end of the year preceding the fiftieth
anniversary of the Trust Agreement. In the event of termination of the Trust,
written notice thereof will be sent by the Trustee to each Unitholder of the
Trust at his address appearing on the registration books of the Trust maintained
by the Trustee, such notice specifying the time or times at which the Unitholder
may surrender his certificate or certificates, if any were issued, for
cancellation. Within a reasonable time thereafter the Trustee shall liquidate
any Bonds then held in the Trust and shall deduct from the funds of the Trust
any accrued costs, expenses or indemnities provided by the Trust Agreement,
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. The sale of Bonds in the Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were not
required at such time. For this reason, among others, the amount realized by a
Unitholder upon termination may be less than the principal amount or par amount
of Bonds represented by the Units held by such Unitholder. The Trustee shall
then distribute to each Unitholder his or her share of the balance of the
Interest and Principal Accounts. With such distribution the Unitholders shall be
furnished a final distribution statement of the amount distributable. At such
time as the Trustee in its sole discretion shall determine that any amounts held
in reserve are no longer necessary, it shall make distribution thereof to
Unitholders in the same manner.
LIMITATION ON LIABILITIES. The Sponsor, the Evaluator, the Distributor and
the Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good
33
<PAGE>
faith pursuant to the Trust Agreement, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith or gross negligence in
the performance of their duties or by reason of their reckless disregard of
their obligations and duties thereunder. The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee of any of the
Bonds. In the event of the failure of the Sponsor to act under the Trust
Agreement, the Trustee may act thereunder and shall not be liable for any action
taken by it in good faith under the Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Bonds or upon the interest thereon or upon it
as Trustee under the Trust Agreement or upon or in respect of the Fund which the
Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Trust Agreement contains other customary provisions limiting the
liability of the Trustee.
The Trustee, Sponsor, Distributor and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Trust Agreement
shall be made in good faith upon the basis of the best information available to
it, provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor, Distributor or Unitholders for errors in judgment. This
provision shall not protect the Evaluator in any case of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties.
SPONSOR. Delaware Capital Management, Inc. is the Sponsor of the Fund and
Delaware Distributors, L.P. is the primary Distributor of Fund Units. Both the
Sponsor and Distributor are indirect, wholly owned subsidiaries of Lincoln
National Corporation ("LNC"). LNC, headquartered in Fort Wayne, Indiana, owns
and operates insurance and investment management businesses, including Delaware
Management Holdings, Inc. ("DMH"). Affiliates of DMH serve as adviser,
distributor and transfer agent for the Delaware Investments Family of Mutual
Funds.
As of April 30, 1998, affiliates of DMH, including the Sponsor, had assets
under management of over $45 billion in mutual fund and institutional accounts,
and served as investment adviser to over 100 mutual fund portfolios. The
principal business address for the Sponsor is One Commerce Square, Philadelphia,
Pennsylvania 19103; the principal business address for the Distributor is 1818
Market Street, Philadelphia, Pennsylvania 19103. (This paragraph relates only to
the Sponsor and not to the Fund or to any Series thereof. The information is
included herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed information will be made available by the Sponsor
upon request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and not
exceeding amounts prescribed by the Securities and Exchange Commission, (ii)
terminate the Trust Agreement and liquidate the Fund as provided therein or
(iii) continue to act as Trustee without terminating the Trust Agreement.
EVALUATOR. Muller Data Corporation serves as Evaluator. The Evaluator may
resign or be removed by the Sponsor in which event the Sponsor is to use its
best efforts to appoint a satisfactory successor. Such resignation or removal
shall become effective upon acceptance of appointment by the successor
evaluation. If upon resignation of the Evaluator no successor has accepted
appointment within 30 days after notice of resignation, the Evaluator may apply
to a court of competent jurisdiction for the appointment of a successor. Notice
of such resignation or removal and appointment shall be mailed by the Trustee to
each Unitholder.
TRUSTEE. The Trustee is The Chase Manhattan Bank, with its principal
executive office located at 270 Park Avenue, New York, New York 10017 and its
unit investment trust office at 4 New York Plaza,
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<PAGE>
6th Floor, New York, New York 10004-2413. The Trustee is subject to supervision
by the Superintendent of Banks of the State of New York, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve System.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Bonds for the portfolio of the Trust.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Fund. Such
records shall include the name and address of, and the certificates issued by
the Trust to, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or Federal statute, rule or
regulation (see "Rights of Unitholders -- Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Bonds held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of the Trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor. The Trustee or
successor trustee must mail a copy of the notice of resignation to all
Unitholders then of record, not less than 60 days before the date specified in
such notice when such resignation is to take effect. The Sponsor upon receiving
notice of such resignation is obligated to appoint a successor trustee promptly.
If, upon such resignation, no successor trustee has been appointed and has
accepted the appointment within 30 days after notification, the retiring Trustee
may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement. Notice of such removal and appointment shall be
mailed to each Unitholder by the Sponsor. Upon execution of a written acceptance
of such appointment by such successor trustee, all the rights, powers, duties
and obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a corporation organized under the laws of the United States or any
State, be authorized to exercise trust powers and have at all times an aggregate
capital, surplus and undivided profits of not less than $5,000,000.
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby and certain
matters relating to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn will act as counsel for the Trustee and as special New
York tax counsel for the Trust.
INDEPENDENT AUDITORS. The statement of net assets, including the schedule
of investments, as of the opening of business on the Initial Date of Deposit,
appearing in this Prospectus and Registration Statement has been audited by
Ernst & Young LLP, independent auditors, as set forth in their report appearing
elsewhere herein, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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<PAGE>
DESCRIPTION OF BOND RATINGS*
STANDARD & POOR'S. A brief description of the applicable Standard & Poor's
ratings symbols and their meanings follows:
A Standard & Poor's corporate or municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect to a specific debt
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.
The bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default -- capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in
accordance with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization or other arrangements under
the laws of bankruptcy and other laws affecting creditors' rights.
AAA - Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is extremely
strong.**
AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
Plus (+) or Minus (-): The ratings from "AA" to "BBB" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the bonds being rated and indicates that payment of
debt service requirements is largely or entirely dependent upon the successful
and timely completion of the project. This rating, however, while addressing
credit quality subsequent to
- ------------------------
*As published by the ratings companies.
**Bonds insured by Financial Guaranty Insurance Company, AMBAC Indemnity
Corporation, Municipal Bond Investors Assurance Corporation, Connie Lee
Insurance Company, Financial Security Assurance and Capital Guaranty Insurance
Company are automatically rated "AAA" by Standard & Poor's.
36
<PAGE>
completion of the project, makes no comment on the likelihood of, or the risk of
default upon failure of, such completion. The investor should exercise his/her
own judgment with respect to such likelihood and risk.
Credit Watch: Credit Watch highlights potential changes in ratings of bonds
and other fixed income securities. It focuses on events and trends which place
companies and government units under special surveillance by S&P's 180-member
analytical staff. These may include merges, voter referendums, actions by
regulatory authorities, or developments gleaned from analytical reviews. Unless
otherwise noted, a rating decision will be made within 90 days. Issues appear on
Credit Watch where an event, situation, or deviation from trends occurred and
needs to be evaluated as to its impact on credit ratings. A listing, however,
does not mean a rating change is inevitable. Since S&P continuously monitors all
of its ratings, Credit Watch is not intended to include all issues under review.
Thus, rating changes will occur without issues appearing on Credit Watch.
MOODY'S INVESTORS SERVICE, INC. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follows:
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues. Their safety is so absolute
that with the occasional exception of oversupply in a few specific instances,
characteristically, their market value is affected solely by money market
fluctuations.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
Their market value is virtually immune to all but money market influences, with
the occasional exception of oversupply in a few specific instances.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future. The
market value of A-rated bonds may be influenced to some degree by economic
performance during a sustained period of depressed business conditions, but,
during periods of normalcy, A-rated bonds frequently move in parallel with Aaa
and Aa obligations, with the occasional exception of oversupply in a few
specific instances.
A 1 and Baa 1 - Bonds which are rated A 1 and Baa 1 offer the maximum in
security within their quality group, can be bought for possible upgrading in
quality, and additionally, afford the investor an opportunity to gauge more
precisely the relative attractiveness of offerings in the market place.
Baa - Bonds which are rated Baa are considered as medium grade obligation;
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. The market value of Baa-rated
bonds is more sensitive to changes in economic circumstances, and aside from
occasional speculative factors applying to some bonds of this class, Baa market
valuations will move in parallel with Aaa, Aa, and A obligations during periods
of economic normalcy, except in instances of oversupply.
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<PAGE>
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the high
end of its category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.
Con.(---) - Bonds for which the security depends upon the completion of
some act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
38
<PAGE>
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund,
the Sponsor or the Distributor. 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.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
TITLE PAGE
- ---------------------------------------- ----
SUMMARY OF ESSENTIAL
FINANCIAL INFORMATION ................ 3
THE FUND ............................... 5
INVESTMENT OBJECTIVES AND
PORTFOLIO SELECTION .................. 6
THE TRUST .............................. 7
REPORT OF INDEPENDENT AUDITORS ......... 8
STATEMENT OF NET ASSETS ................ 9
EQUIVALENT TAXABLE ESTIMATED
CURRENT RETURNS ...................... 12
RISK FACTORS ........................... 13
ESTIMATED CURRENT RETURN AND
ESTIMATED LONG-TERM RETURN ........... 18
TRUST OPERATING EXPENSES ............... 19
INSURANCE ON THE BONDS IN THE
TRUST ................................ 20
TAX STATUS ............................. 21
PUBLIC OFFERING ........................ 25
RIGHTS OF UNITHOLDERS .................. 28
TRUST ADMINISTRATION ................... 32
OTHER MATTERS .......................... 35
DESCRIPTION OF BOND RATINGS ............ 36
- --------------------------------------------------------------------------------
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration statements
and the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
UIT-FIPR14 3/98
P R O S P E C T U S
- --------------------------------------------------------------------------------
May 19, 1998
DELAWARE INVESTMENTS
TAX-EXEMPT TRUST,
SERIES 15
NATIONAL INSURED
SERIES 6
================================================================================
DELAWARE CAPITAL MANAGEMENT, INC.
ONE COMMERCE SQUARE
PHILADELPHIA, PENNSYLVANIA 19103
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers
and documents:
The facing sheet of Form S-6
The Cross-Reference Sheet
The Prospectus
The signatures
The following exhibits:
1.1 Standard Terms and Conditions of Trust - Delaware-Voyageur Tax-Exempt
Trust Series 10 and certain Subsequent Series (incorporated by
reference to Amendment No. 1 to Form S-6 (File No. 333-27095) filed on
behalf of Delaware-Voyageur Tax-Exempt Trust, Series 10).
1.2 Form of Trust Indenture and Agreement for Delaware Investments
Tax-Exempt Trust, Series 15.
2. Opinion of counsel to the Sponsor as to legality of the securities
being registered including a consent to the use of its name under the
headings "Tax Status" and "Legal Opinions" in the Prospectus and
opinion of counsel as to Federal income tax status of the securities
being registered.
3.1 Opinion of counsel as to New York income tax status of securities being
registered.
3.2 Opinion of counsel as to advancement of funds by Trustee.
4. Not applicable.
5. Financial Data Schedules filed hereto electronically as Exhibit(s) 27
pursuant to Rule 401 of Regulation S-T.
6. Written Consents.
(a) Consent of Muller Data Corporation.
(b) Consent of Ernst & Young LLP.
<PAGE>
SIGNATURES
The Registrant, Delaware Investments Tax-Exempt Trust, Series 15,
hereby identifies Delaware-Voyageur Tax-Exempt Trust, Series 1,
Delaware-Voyageur Tax-Exempt Trust, Series 3 and Delaware-Voyageur Tax-Exempt
Trust, Series 4 for purposes of the representations required by Rule 487 and
represents the following: (1) that the portfolio securities deposited in the
series with respect to which this Registration Statement is being filed do not
differ materially in type or quality from those deposited in such previous
series; (2) that, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the series with respect to which this Registration Statement is
being filed, this Registration Statement does not contain disclosures that
differ in any material respect from those contained in the registration
statements for such previous series as to which the effective date was
determined by the Securities and Exchange Commission or the staff; and (3) that
it has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Delaware Investments Tax-Exempt Trust, Series 15, has duly caused
this Amendment No. 1 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Philadelphia and
State of Pennsylvania on the 19th day of May, 1998.
DELAWARE INVESTMENTS TAX-
EXEMPT TRUST, SERIES 15
(Registrant)
By: Delaware Capital Management, Inc.
(Depositor)
By: /s/ Wayne A. Stork
--------------------------------------
Chairman of the Board of Directors and
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on by the following person in the
capacity indicated and on May 19, 1998.
SIGNATURE TITLE
/s/ Wayne A. Stork
- ---------------------------
Wayne A. Stork Chairman of the Board of Directors and President
<PAGE>
/s/ George M. Chamberlain, Jr.
- ---------------------------
George M. Chamberlain, Jr. Director, Senior Vice President, Secretary and
General Counsel
/s/ David K. Downes
- ---------------------------
David K. Downes Senior Vice President, Chief Operating Officer,
and Chief Financial Officer
Exhibit 99
MEMORANDUM OF CHANGES
DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
The Prospectus filed with Amendment No. 1 of the Registration
Statement on Form S-6 has been revised to reflect information regarding the
deposit of bonds on May 19, 1998, and to set forth certain statistical data
based thereon.
COVER PAGE. The series number and the Trust in the Fund have been
added. Information relating to the sales charge and the price of the
offering if the units were available for purchase at the opening of
business on the Initial Date of Deposit is set forth in the "Public
Offering Price" section.
PAGE 3. The "Summary of Essential Financial Information" table
has been completed.
PAGE 7. The following information for the Trust appears on the
pages indicated:
Summary data regarding the composition of the portfolio
of the Trust.
PAGE 8. The Independent Auditors' Report has been completed.
PAGE 9. The Statement of Net Assets has been completed.
PAGE 10. National Insured Series 6 Schedule of Investments.
PAGE 11. The Notes to Schedule of Investments has been completed.
PAGE 27. In the section "Offering Price," the differences between
the offering side evaluations and the bid side
evaluations of the Bonds in the Trust have been set
forth.
PAGE 28. The dealer concession has been set forth in the "Public
Offering" section.
PAGE 29. The percentage of the aggregate principal amount of the
Bonds in the Trust in which the Sponsor or affiliates of
the Sponsor have participated as underwriters or members
of the underwriting syndicate has been set forth in the
"Sponsor and Distributor Compensation" section.
<PAGE>
BACK COVER The Series number, the Trust in the Fund and the date of
the Prospectus have been included.
Exhibit 1.2
DELAWARE INVESTMENTS TAX-EXEMPT TRUST
SERIES 15
TRUST AGREEMENT
Dated: May 19, 1998
This Trust Agreement between Delaware Capital Management, Inc., as
Depositor, Muller Data Corporation, as Evaluator and The Chase Manhattan Bank,
as Trustee, sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled "Standard Terms and Conditions
of Trust for Delaware-Voyageur Tax-Exempt Trust, Series 10 and Certain
Subsequent Series, Effective May 22, 1997" (herein called the "STANDARD TERMS
AND CONDITIONS OF TRUST"), and such provisions as are set forth in full and such
provisions as are incorporated by reference constitute a single instrument. All
references herein to Articles and Sections are to Articles and Sections of the
Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Article I listed in Schedule A hereto
have been deposited in Trust under this Trust Agreement.
(b) All references to Voyageur Fund Managers, Inc. in the
Standard Terms and Conditions of Trust shall be amended to refer to
Delaware Capital Management, Inc.
<PAGE>
IN WITNESS WHEREOF, Delaware Capital Management, Inc. has caused this
Trust Agreement to be executed by its Senior Vice President, Secretary and
General Counsel, Muller Data Corporation has caused this Trust Agreement to be
signed by its Chief Operating Officer and The Chase Manhattan Bank has caused
this Trust Agreement to be executed by one of its Vice Presidents all as of the
day, month and year first above written.
DELAWARE CAPITAL MANAGEMENT, INC.,
Depositor
By: /s/ George M. Chamberlain, Jr.
----------------------------------------
Senior Vice President, Secretary and General
Counsel
MULLER DATA CORPORATION, Evaluator
By: /s/ Ron Valinoti
----------------------------------------
THE CHASE MANHATTAN BANK, Trustee
By: /s/ Robert Ionescu
----------------------------------------
<PAGE>
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
(Note: Incorporated herein and made a part hereof are the "SCHEDULES OF
INVESTMENTS" as set forth in the Prospectus.)
Exhibit 3.1
May 19, 1998
Delaware Capital Management, Inc.
One Commerce Square
Philadelphia, Pennsylvania 19103
Re: Delaware Investments Tax-Exempt Trust, Series 15
------------------------------------------------
Ladies/Gentlemen:
We have served as special counsel for Delaware Capital Management,
Inc., as Sponsor and Depositor (the "DEPOSITOR") of Delaware Investments
Tax-Exempt Trust, Series 15 (the "FUND"), in connection with the preparation,
execution and delivery of a Trust Agreement dated May 19, 1998 between Delware
Capital Management, Inc., as Depositor, Muller Data Corporation, as Evaluator,
and The Chase Manhattan Bank, as Trustee, pursuant to which the Depositor has
delivered to and deposited the bonds listed in Schedule A to the Trust Agreement
with the Trustee and pursuant to which the Trustee has issued in the name of the
Depositor documents representing units of fractional undivided interest in and
ownership of the Fund created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the units of the Fund
have been duly authorized; and
2. The certificates evidencing the units of the Fund when duly
executed and delivered by the Depositor and the Trustee in accordance
with the aforementioned Trust Agreement, will constitute valid and
binding obligations of the Fund and the Depositor in accordance with
the terms thereof.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-52683) relating to the units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
MJK/erg
Exhibit 3.2
May 19, 1998
The Chase Manhattan Bank
4 New York Plaza
New York, New York 10004-2413
Delaware Capital Management, Inc.
One Commerce Square
Philadelphia, Pennsylvania 19103
Re: Delaware Investments Tax-Exempt Trust, Series 15
------------------------------------------------
Ladies/Gentlemen:
We have acted as special counsel for Delaware Capital Management, Inc.,
Depositor of Delaware Investments Tax-Exempt Trust, Series 15 (the "FUND"), in
connection with the issuance of units of fractional undivided interest in the
Fund, under a Trust Agreement dated May 19, 1998 (the "INDENTURE") between
Delaware Capital Management, Inc., as Depositor, Muller Data Corporation, as
Evaluator, and The Chase Manhattan Bank, as Trustee.
In this connection, we have examined the Registration Statement, the
form of Prospectus proposed to be filed with the Securities and Exchange
Commission, the Indenture and such other instruments and documents as we have
deemed pertinent. For purposes of the following opinions, it is assumed that
each asset of the Trust is debt the interest on which is excluded from gross
income for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) The Trust is not an association taxable as a corporation
but will be governed by the provisions of subchapter J (relating to
Trusts) of chapter 1, Internal Revenue Code of 1986 (the "CODE").
(ii) Each Unitholder will be considered as owning a pro rata
share of each asset of the Trust in the proportion that the number of
Units of the Trust held by him bears to the total number of Units
outstanding of the Trust. Under subpart E, subchapter J of chapter 1 of
the Code, income of the Trust will be treated as income of each
Unitholder of the Trust in the proportion described, and an item of
Trust income will have the same character in the hands of a Unitholder
as it would have in
<PAGE>
the hands of the Trustee. Accordingly, to the extent that the income of
the Trust consists of interest and original issue discount excludable
from gross income under Section 103 of the Code, such income will be
excludable from federal gross income of the Unitholders, except in the
case of a Unitholder who is a substantial user (or a person related to
such user) of a facility financed through issuance of any industrial
development bonds or certain private activity bonds held by the Trust.
In the case of such Unitholder who is a substantial user (and no other)
interest and original issue discount received with respect to his Units
attributable to such industrial development bonds or such private
activity bonds is includible in his gross income. To the extent the
Trust holds bonds that are "specified private activity bonds" within
the meaning of Section 57(a)(5) of the Code, a Unitholder's pro rata
portion of the income on such Bonds will be included as an item of tax
preference in the computation of the alternative minimum tax applicable
to all taxpayers (including non-corporate taxpayers) subject to the
alternative minimum tax. Moreover, in the case of certain corporations,
interest on all of the Bonds is included in computing the alternative
minimum tax pursuant to Section 56(c) of the Code, and the branch
profits tax imposed by section 884 of the Code with respect to U.S.
branches of foreign corporations.
(iii) Gain or loss will be recognized to a Unitholder upon
redemption or sale of his Units. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the adjusted
basis of the Units represented by his Certificate. If a Bond is
acquired with accrued interest, that portion of the price paid for the
accrued interest is added to the tax basis of the Bond. When this
accrued interest is received, it is treated as a return of capital and
reduces the tax basis of the Bond. If a Bond is purchased for a
premium, the amount of the premium is added to the tax basis of the
Bond. Bond premium is amortized over the remaining term of the Bond,
and the tax basis of the Bond is reduced each tax year by the amount of
the premium amortized in that tax year. Accordingly, Unitholders must
reduce the tax basis of their Units for their share of accrued interest
received by the Trust, if any, on Bonds delivered after the Unitholders
pay for their Units to the extent that such interest accrued on such
Bonds before the date the Trust acquired ownership of the Bonds (and
the amount of this reduction may exceed the amount of accrued interest
paid to the seller) and, consequently, such Unitholders may have an
increase in taxable gain or reduction in capital loss upon the
disposition of such Units. In addition, such basis will be increased by
the Unitholder's aliquot share of the accrued original issue discount
(and market discount, if the Unitholder elects to include market
discount in income as it accrues) with respect to each Bond held by the
Trust with respect to which there was an original issue discount at the
time the Bond was issued (or which was purchased with market discount)
and reduced by the annual amortization of bond premium, if any, on
Bonds held by the Trust.
(iv) If the Trustee disposes of a Trust asset (whether by
sale, payment on maturity, redemption or otherwise) gain or loss is
recognized to the Unitholder and
<PAGE>
the amount thereof is measured by comparing the Unitholder's aliquot
share of the total proceeds from the transaction with his basis for his
fractional interest in the asset disposed of. Such basis is ascertained
by apportioning the tax basis for his Units among each of the Trust
assets (as of the date on which his Units were acquired) ratably
according to their values as of the valuation date nearest the date on
which he purchased such Units. A Unitholder's basis in his Units and of
his fractional interest in each Trust asset must be reduced by the
amount of his aliquot share of accrued interest received by the Trust,
if any, on Bonds delivered after the Unitholders pay for their Units to
the extent that such interest accrued on the Bonds before the date the
Trust acquired ownership of the Bonds (and the amount of this reduction
may exceed the amount of accrued interest paid to the seller) must be
reduced by the annual amortization of bond premium, if any, on Bonds
held by the Trust and must be increased by the Unitholder's share of
the accrued original issue discount (and market discount, if the
Unitholder elects to include market discount in income as it accrues)
with respect to each Bond which, at the time the Bond was issued, had
original issue discount (or which was purchased with market discount).
(v) In the case of any Bond held by the Trust where the
"stated redemption price at maturity" exceeds the "issue price", such
excess shall be original issue discount. With respect to each
Unitholder, upon the purchase of his Units subsequent to the original
issuance of Bonds held by the Trust, Section 1272(a)(7) of the Code
provides for a reduction in the accrued "daily portion" of such
original issue discount upon the purchase of a Bond subsequent to the
Bond's original issue, under certain circumstances. In the case of any
Bond held by the Trust the interest on which is excludable from gross
income under Section 103 of the Code, any original issue discount which
accrues with respect to the Bonds will be treated as interest which is
excludable from gross income under Section 103 of the Code.
(vi) We have examined the Municipal Bond Unit Investment Trust
Insurance Policies, if any, issued to the Trust on the Date of Deposit
by AMBAC Indemnity Corporation, Financial Guaranty Insurance
Corporation or a combination thereof. Each such policy, or a
combination of such policies, insures all Bonds held by the Trustee for
the Trust (other than Bonds described in paragraph (vii)) against
default in the prompt payment of principal and interest. In our
opinion, any amount paid under each said policy, or a combination of
said policies, which represents maturing interest on defaulted Bonds
held by the Trustee will be excludable from Federal gross income if,
and to the same extent as, such interest would have been so excludable
if paid in normal course of business by the respective issuer of the
defaulted Bonds provided that, at the time such policies are purchased,
the amounts paid for such policies are reasonable, customary and
consistent with the reasonable expectation that the issuer of the
Bonds, rather than the insurer, will pay debt service on the Bonds.
Paragraph (ii) of this opinion is accordingly applicable to policy
proceeds representing maturing interest.
<PAGE>
(vii) Certain Bonds in the portfolio of the Trust have been
insured by the issuers, underwriters, the Sponsor or others against
default in the prompt payment of principal and interest (the "Insured
Bonds"). Such Bonds are so designated on the portfolio pages in the
Prospectus for the Trust. Insurance on Insured Bonds is effective so
long as such Insured Bonds remain outstanding. For each of these
Insured Bonds, we have been advised that the aggregate principal amount
of such Insured Bonds listed on the portfolio page was acquired by the
Trust and are part of the series of such Insured Bonds in the listed
aggregate principal amount. Based upon the assumption that the Insured
Bonds of the Trust are part of a series covered by an insurance policy,
it is our opinion that any amounts received by the Trust representing
maturing interest on such Insured Bonds will be excludable from Federal
gross income if, and to the same extent as, such interest would have
been so excludable if paid in normal course of business by the issuer
provided that, at the time such policies are purchased, the amounts
paid for such policies are reasonable, customary and consistent with
the reasonable expectation that the issuer of the Insured Bonds, rather
than the insurer will pay debt service on the Insured Bonds. Paragraph
(ii) of this opinion is accordingly applicable to such payment
representing maturing interest.
Because the Trust does not include any "specified private activity
bonds" within the meaning of Section 57(a)(5) of the Code issued on or after
August 8, 1986, none of the Trust's interest income shall be treated as an item
of tax preference when computing the alternative minimum tax. In the case of
corporation, for taxable years beginning after December 31, 1986, the
alternative minimum tax and the Superfund Tax depend upon the corporation's
alternative minimum taxable income ("AMTI"), which is the corporation's taxable
income with certain adjustments.
Pursuant to Section 56(c) of the Code, one of the adjustment items used
in computing AMTI of a corporation (other than an S Corporation, Regulated
Investment Company, Real Estate Investment Trust, REMIC or FASIT) for taxable
years beginning after 1989, is an amount equal to 75% of the excess of such
corporation's "adjusted current earnings" over an amount equal to its AMTI
(before such adjustment item and the alternative tax net operating loss
deduction). "Adjusted current earnings" includes all tax-exempt interest,
including interest on all Bonds in the Trust, and tax-exempt original issue
discount.
Sections 1288 and 1272 of the Code provide a complex set of rules
governing the accrual of original issue discount. These rules provide that
original issue discount accrues either on the basis of a constant compound
interest rate or ratably over the term of the Bond, depending on the date the
Bond was issued. In addition, special rules apply if the purchase price of a
Bond exceeds the original issue price plus the amount of original issue discount
which would have previously accrued based upon its issue price (its "adjusted
issue price"). The application of these rules will also vary depending on the
value of the Bond on the date a Unitholder acquires his Units, and the price the
Unitholder pays for his Units.
<PAGE>
Effective for tax returns filed after December 31, 1987, all taxpayers
are required to disclose to the Internal Revenue Service the amount of
tax-exempt interest earned during the year.
Section 265 of the Code provides for a reduction in each taxable year
of 100 percent of the otherwise deductible interest on indebtedness incurred or
continued by financial institutions, to which either Section 585 or Section 593
of the Code applies, to purchase or carry obligations acquired after August 7,
1986, the interest on which is exempt from Federal income taxes for such taxable
year. Under rules prescribed by Section 265, the amount of interest otherwise
deductible by such financial institutions in any taxable year which is deemed to
be attributable to tax-exempt obligations acquired after August 7, 1986, will
generally be the amount that bears the same ratio to the interest deduction
otherwise allowable (determined without regard to Section 265) to the taxpayer
for the taxable year as the taxpayer's average adjusted basis (within the
meaning of Section 1016) of tax-exempt obligations acquired after August 7,
1986, bears to such average adjusted basis for all assets of the taxpayer.
We also call attention to the fact that, under Section 265 of the Code,
interest on indebtedness incurred or continued to purchase or carry Units is not
deductible for Federal income tax purposes. Under rules used by the Internal
Revenue Service for determining when borrowed funds are considered used for the
purpose of purchasing or carrying particular assets, the purchase of Units may
be considered to have been made with borrowed funds even though the borrowed
funds are not directly traceable to the purchase of Units. However, these rules
generally do not apply to interest paid on indebtedness incurred for
expenditures of a personal nature such as a mortgage incurred to purchase or
improve a personal residence.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects
tax-exempt bonds to the market discount rules of the Code effective for bonds
purchased after April 30, 1993. In general, market discount is the amount (if
any) by which the stated redemption price at maturity exceeds an investor's
purchase price (except to the extent that such difference, if any, is
attributable to original issue discount not yet accrued) subject to a statutory
de minimis rule. Market discount can arise based on the price the Trust pays for
Bonds or the price a Unitholder pays for his or her Units. Under the Tax Act,
accretion of market discount is taxable as ORDINARY INCOME; under prior law, the
accretion had been treated as capital gain. Market discount that accretes while
the Trust holds a Bond would be recognized as ordinary income by the Unitholders
when principal payments are received on the Bond, upon sale or at redemption
(including early redemption), or upon the sale or redemption of his or her
Units, unless a Unitholder elects to include market discount in taxable income
as it accrues.
Chapman and Cutler has expressed no opinion with respect to taxation
under any other provisions of Federal law. Ownership of the Units may result in
Collateral Federal income
<PAGE>
tax consequences to certain taxpayers. Prospective investors should consult
their tax advisors as to the applicability of any such collateral consequences.
Very truly yours,
CHAPMAN AND CUTLER
MJK/erg
Exhibit 3.3
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, N.Y. 10005-2072
May 19, 1998
The Chase Manhattan Bank,
as Trustee of
Delaware Investments Tax-Exempt Trust,
Series 15
Four New York Plaza
New York, New York 10004-2413
Attn: Mr. Thomas Porrazzo
Vice President
Re: Delaware Investments Tax-Exempt Trust, Series 15, consisting of
National Insured Series 6
Dear Sirs:
We are acting as special counsel with respect to New York tax matters
for Delaware Investments Tax-Exempt Trust, Series 15, which consists of National
Insured Series 6, (the "Trust"), which will be established under a certain
Standard Terms and Conditions of Trust and a related Trust Agreement each dated
as of today (collectively, the "Indenture") between Delaware Capital Management,
Inc., as Depositor (the "Depositor"), Muller Data Corporation, as Evaluator, and
The Chase Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the terms of
the Indenture, units of fractional undivided interest in the Trust (the "Units")
will be issued in the aggregate number set forth in the Indenture.
We have examined and are familiar with originals or certified copies,
or copies otherwise identified to our satisfaction, of such documents as we have
deemed necessary or appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today and addressed to
the Trustee, of Chapman and Cutler, counsel for the Depositor, with respect to
the matters of law set forth therein.
Based upon the foregoing, we are of the opinion that:
<PAGE>
1. The Trust will not constitute an association taxable as a
corporation under New York law, and accordingly will not be subject to the New
York State franchise tax or the New York City general corporation tax.
2. Under the income tax laws of the State and City of New York, the
income of the Trust will be considered the income of the holders of the Units.
We consent to the filing of this opinion as an exhibit to the
Registration Statement (No. 333-52683) filed with the Securities and Exchange
Commission with respect to the registration of the sale of the Units and to the
references to our name under the captions "Taxation" and "Legal Opinions" in
such Registration Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
SFL:tbm
Exhibit 3.4
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, N.Y. 10005-2072
May 19, 1998
The Chase Manhattan Bank,
as Trustee of
Delaware Investments Tax-Exempt Trust,
Series 15
Four New York Plaza
New York, New York 10004-2413
Attn: Mr. Thomas Porrazzo
Vice President
Re: Delaware Investments Tax-Exempt Trust, Series 15, consisting of
National Insured Series 6
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank ("Chase") in
connection with the execution and delivery of a Standard Terms and Conditions of
Trust and a related Trust Agreement each dated as of today (collectively, the
"Indenture"), between Delaware Capital Management, Inc., as Depositor (the
"Depositor"), Muller Data Corporation, as Evaluator, and Chase, as Trustee (the
"Trustee"), establishing Delaware Investments Tax-Exempt Trust, Series 15, which
consists of National Insured Series 6 (the "Trust"), and the confirmation by
Chase, as Trustee under the Indenture, that it has registered on the
registration books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the respective Trust (such aggregate
units being herein called "Units"), each of which Units represents an undivided
interest in the Trust, which consists of tax-exempt municipal obligations
(including confirmation of contracts for the purchase of certain obligations not
yet delivered and cash, cash equivalents or an irrevocable letter of credit in
the amount required for such purchase upon the receipt of such obligations),
such obligations being defined in the Indenture as Securities and referenced in
the schedules to the Indenture.
We have examined the Indenture, the Closing Memorandum delivered today
by the parties to the Indenture (the "Closing Memorandum"), and such other
documents as we have
<PAGE>
deemed necessary in order to render this opinion. Based on the foregoing, we are
of the opinion that:
1. Chase is a duly organized and existing corporation having the powers
of a trust company under the laws of the State of New York.
2. The Indenture has been duly executed and delivered by Chase and,
assuming due execution and delivery by the other parties thereto, constitutes
the valid and legally binding obligation of Chase.
3. Chase, as Trustee, has registered on the registration books of the
Trust the ownership of the Units by the Depositor. Upon receipt of confirmation
of the effectiveness of the registration statement for the sale of the Units
filed with the Securities and Exchange Commission under the Securities Act of
1933, the Trustee may cause the Units to be registered in such names as the
Depositor may request, to or upon the order of the Depositor, as provided in the
Closing Memorandum.
4. Chase, as Trustee, may lawfully advance amounts to the Trust and may
be reimbursed, without interest, for any such advances from funds in the
interest and capital accounts, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered, among other
things, whether the Securities have been duly authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
SFL:gcm
EXHIBIT 6(a)
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated May 19, 1998 in this Amendment No.
1 to the Registration Statement (Form S-6 No. 333-52683) and related Prospectus
of Delaware Investments Tax-Exempt Trust, Series 15 dated May 19, 1998.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
May 19, 1998
Exhibit 6(b)
Muller Data Corporation
395 Hudson Street
New York, New York 10014-3622
May 19, 1998
Delaware Capital Management, Inc.
One Commerce Square
Philadelphia, Pennsylvania 19103
Re: Delaware Investments Tax-Exempt Trust, Series 15 (the "Fund")
Gentlemen:
We have examined the Registration Statement File No. 333-52683 for the
above captioned Fund.
We hereby acknowledge that Muller Data Corporation is currently acting
as the Evaluator for the Fund. We hereby consent to the use in the Registration
Statement of the reference to Muller Data Corporation as the Evaluator for the
above captioned Fund.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.
Sincerely,
Muller Data Corporation
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE PROSPECTUS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH DOCUMENT.
</LEGEND>
<CIK> 0001042758
<NAME> DELAWARE INVESTMENTS TAX-EXEMPT TRUST, SERIES 15
<SERIES>
<NUMBER> 1
<NAME> NATIONAL INSURED SERIES 6
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAY-19-1998
<PERIOD-END> MAY-19-1998
<INVESTMENTS-AT-COST> 2,026,686
<INVESTMENTS-AT-VALUE> 2,026,686
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 29,933
<TOTAL-ASSETS> 2,056,619
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29,933
<TOTAL-LIABILITIES> 29,933
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,026,686
<SHARES-COMMON-STOCK> 206,805
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,026,686
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
