<PAGE>
File No. 2-80125 CIK #708852
Securities and Exchange CommissionWashington, D. C. 20549
Post-Effective
Amendment No. 12
to
Form S-6
For Registration under the Securities Act of 1933
of Securities of Unit Investment Trusts Registered
on Form N-8B-2
Kemper Tax-Exempt Income Trust, Series 48
Name and executive office address of Depositor:
Kemper Unit Investment Trusts
(a service of Kemper Securities, Inc.)
77 West Wacker - 29th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
Michael J. Thoms
77 West Wacker - 29th Floor
Chicago, Illinois 60601
( X ) Check box if it is proposed that this filing will
become effective at 2:00 p.m. on January 27, 1995
pursuant to paragraph (b) of Rule 485.
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KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
PART ONE
The date of this Part One is that date
which is set forth in Part Two
of the Prospectus
Each Series of Kemper Tax-Exempt Income Trust (the "National Trust")
was formed for the purpose of gaining interest income free from Federal income
taxes while conserving capital and diversifying risks by investing in a fixed
portfolio of Municipal Bonds consisting of obligations of states of the United
States and political subdivisions and authorities thereof. The portfolios of
the Intermediate Term Series and the Short-Intermediate Term Series of the
Trust are similar to the National Series, except that the Intermediate Term
Series consist of obligations having a dollar-weighted average maturity of 10
years or less and the Short-Intermediate Term Series have a dollar-weighted
average maturity of 5 years or less.
Units of the National Trust are not deposits or obligations of, or
guaranteed by, any bank, and Units are not federally insured or otherwise
protected by the Federal Deposit Insurance Corporation and involves investment
risk including loss of principal.
This Prospectus is in two parts. Read and retain both parts of this
Prospectus for future reference.
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SPONSOR: KEMPER UNIT INVESTMENT TRUSTS
A SERVICE OF KEMPER SECURITIES, INC.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
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<S> <C> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . 3 Essential Information*
The Trust . . . . . . . . . . . . . . . . 3 Report of Independent Auditors*
Public Offering Price . . . . . . . . . . 3 Statement of Net Assets and Liabilities*
Interest and Principal Statement of Operations*
Distributions . . . . . . . . . . . . . 3 Statement of Changes in Net Assets*
Reinvestment . . . . . . . . . . . . . . 4 Schedule of Investments*
Estimated Current Return and Notes to Schedule Investments*
Estimated Long-Term Return . . . . . . 4 Notes to Financial Statements*
Market for Units . . . . . . . . . . . . 4
THE TRUST . . . . . . . . . . . . . . . . . . 5
PORTFOLIO . . . . . . . . . . . . . . . . . . 6
Portfolio Risk Information . . . . . . . 7 *INFORMATION ON THESE ITEMS
DISTRIBUTION REINVESTMENT . . . . . . . . . . 12 APPEARS IN PART TWO
INTEREST AND ESTIMATED LONG-TERM
AND CURRENT RETURNS . . . . . . . . . . . 12
TAX STATUS OF THE TRUST . . . . . . . . . . . 13
PUBLIC OFFERING OF UNITS . . . . . . . . . . 17
Public Offering Price . . . . . . . . . . 17
Accrued Interest . . . . . . . . . . . . 18
Public Distribution of Units . . . . . . 19
Profits of Sponsor . . . . . . . . . . . 20
MARKET FOR UNITS . . . . . . . . . . . . . . 20
REDEMPTION . . . . . . . . . . . . . . . . . 21
Computation of Redemption Price . . . . . 22
UNITHOLDERS . . . . . . . . . . . . . . . . . 22
Ownership of Units . . . . . . . . . . . 22
Distributions to Unitholders . . . . . . 23
Statements to Unitholders . . . . . . . . 24
Rights of Unitholders . . . . . . . . . . 25
INVESTMENT SUPERVISION . . . . . . . . . . . 25
ADMINISTRATION OF THE TRUST . . . . . . . . . 26
The Trustee . . . . . . . . . . . . . . . 26
The Evaluator . . . . . . . . . . . . . . 27
Amendment and Termination . . . . . . . . 27
Limitations on Liability . . . . . . . . 28
EXPENSES OF THE TRUST . . . . . . . . . . . . 28
THE SPONSOR . . . . . . . . . . . . . . . . . 29
LEGAL OPINIONS . . . . . . . . . . . . . . . 30
INDEPENDENT AUDITORS . . . . . . . . . . . . 30
DESCRIPTION OF SECURITY RATINGS . . . . . . . 30
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KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
SUMMARY
THE TRUST. Each Series of the Kemper Tax-Exempt Income Trust (the "Trust")
is one of a series of investment companies each of which is a unit investment
trust consisting of a diversified portfolio of obligations of states of the
United States and political subdivisions and authorities thereof ("Municipal
Bonds or "Securities"). The portfolios of the Intermediate Term Series and
Short-Intermediate Term Series of the Trust are similar to the National Series,
except that the Intermediate Term Series consist of obligations having a
dollar-weighted average maturity of 10 years or less and the Short-Intermediate
Term Series have a dollar-weighted average maturity of 5 years or less.
Municipal Bonds in the portfolio were rated as of the Date of Deposit in the
category "A" or better by Standard & Poor's Corporation or Moody's Investors
Service, Inc. Ratings of the Municipal Bonds may have changed since the Date
of Deposit. See "Description of Securities Ratings" herein and the "Schedule
of Investments" in Part Two.
The objective of each Series of the Trust is tax-exempt income and
conservation of capital with diversification of risk through investment in a
fixed portfolio of Municipal Bonds. Interest on certain Municipal Bonds in
certain of the National Series will be a preference item for purposes of the
alternative minimum tax. Accordingly, such National Series may be appropriate
only for investors who are not subject to the alternative minimum tax. There
is, of course, no guarantee that the Trust's objectives will be achieved.
The Units, each of which represents a pro rata undivided fractional
interest in the Municipal Bonds deposited in the appropriate Series of the
Trust, are issued and outstanding Units which have been reacquired by the
Sponsor either by purchase or Units tendered to the Trustee for redemption or
by purchase in the open market. No offering is being made on behalf of the
Trust and any profit or loss realized on the sale of Units will accrue to the
Sponsor and/or the firm reselling such Units.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of a Series of
the Trust is equal to a pro rata share of the aggregate bid prices of the
Municipal Bonds in such Series (plus or minus a pro rata share of cash, if any,
in the Principal Account, held or owned by the Series) plus a sales charge in
the amount shown under "Public Offering of Units." In addition, there will be
added to each transaction an amount equal to the accrued interest from the
last Record Date of such Series to the date of settlement (five business days
after order). The sales charge is reduced on a graduated scale as indicated
under "Public Offering of Units -- Public Offering Price."
INTEREST AND PRINCIPAL DISTRIBUTIONS. Distributions of the estimated
annual interest income received by a National Series or an Intermediate Term
Series, after deduction of estimated expenses, will be made monthly unless the
Unitholder elects to receive such distributions quarterly or semi-annually.
Distributions will be paid on the Distribution Dates to Unitholders of Record
of each such Series on the Record Dates set forth for the applicable option.
Distributions of the estimated annual interest income to be received by a
Short-
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Intermediate Term Series of the Trust, after deduction of estimated expenses,
will be made semi-annually on January 15 and July 15 to Unitholders of record
on January 1 and July 1, respectively, of each year. (See "Essential
Information" in Part Two).
The distribution of funds, if any, in the Principal Account of each Series,
will be made semi-annually to Unitholders of Record on the appropriate dates.
See "Essential Information" in Part Two.
REINVESTMENT. Distributions of interest and principal, including capital
gains, if any, made by a Series of the Trust will be paid in cash unless a
Unitholder elects to reinvest such distributions. Each Unitholder of a Trust
Fund offered herein may elect to have distributions of principal or interest or
both automatically invested without charge in shares of certain mutual funds
sponsored by Kemper Financial Services, Inc. See "Distribution Reinvestment."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN. The Estimated
Current Return is calculated by dividing the estimated net annual interest
income per Unit by the Public Offering Price of such Trust. The estimated net
annual interest income per Unit will vary with changes in fees and expenses of
the Trustee, the Sponsor and Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Securities while the Public Offering
Price will vary with changes in the bid price of the underlying Securities;
therefore, there is no assurance that the present Estimated Current Returns
will be realized in the future. Estimated Long-Term Return is calculated using
a formula which (1) 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 of the Securities in the Trust and (2) takes into account
the expenses and sales charge associated with each Trust Unit. Since the
market values and estimated retirements of the Securities 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.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends,
subject to change at any time, to maintain a market for the Units of each
Series of the Trust and to continuously offer to repurchase such Units at
prices which are based on the aggregate bid side evaluation of the Municipal
Bonds in such Series of the Trust. If such a market is not maintained and no
other over-the-counter market is available, Unitholders will still be able to
dispose of their Units through redemption by the Trustee at prices based upon
the aggregate bid price of the Municipal Bonds in such Series of the Trust.
See "Redemption."
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KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE-TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
THE TRUST
Each Series of the Trust is one of a Series of unit investment trusts
created by the Sponsor under the name Kemper Tax-Exempt Income Trust, all of
which are similar, and each of which was created under the laws of the State of
Missouri pursuant to a Trust Agreement*1 (the "Agreement"). Kemper Unit
Investment Trusts, a service of Kemper Securities, Inc. acts as Sponsor and
Evaluator and Investors Fiduciary Trust Company acts as Trustee. For
information regarding the relationship of Kemper Unit Investment Trusts and
Investors Fiduciary Trust Company, see "The Sponsor."
A Series of 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, Municipal Bonds of the type deposited in the Trust
are often not available in small amounts.
Each Series of the Trust contains a portfolio of interest bearing
obligations issued by or on behalf of states of the United States and political
subdivisions and authorities thereof the interest on which is, in the opinion
of bond counsel to the issuing authorities, exempt from all Federal income
taxes under existing law, but may be subject to state and local taxes. The
portfolios of the Intermediate Term Series and the Short-Intermediate Term
Series of the Trust are similar to the National Series, except that the
Intermediate Term Series consist of obligations having a dollar-weighted
average maturity of 10 years or less and the Short-Intermediate Series consist
of obligations having a dollar-weighted average maturity of 5 years or less.
Proceeds of the maturity, redemption or sale of the Municipal Bonds in a
Series of the Trust, unless used to pay for Units tendered for redemption, will
be distributed to Unitholders of such Series and will not be utilized to
purchase replacement or additional Municipal Bonds for such Series.
The Units, each of which represents a pro rata undivided fractional
interest in the principal amount of Municipal Bonds deposited in a Series of
the Trust, are issued and outstanding Units which have been reacquired by the
Sponsor either by purchase of Units tendered to the Trustee for redemption or
by purchase in the open market. No offering is being made on behalf of the
Trust or any Series thereof and any profit or loss realized on the sale of
Units will accrue to the Sponsor and/or the firm reselling such Units.
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*Reference is made to the Trust Agreement, and any statements contained
herein are qualified in their entirety by the provisions of the Trust
Agreement.
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To the extent that Units of a Series of the Trust are redeemed, the
principal amount of Municipal Bonds in such Series will be reduced and the
undivided fractional interest represented by each outstanding Unit of that
Series will increase. See "Redemption."
The objective of the Trust is tax-exempt income and conservation of capital
with diversification of risk through investment in a fixed portfolio of
Municipal Bonds. There is, of course, no guarantee that the Trust's objectives
will be achieved.
PORTFOLIO
In selecting the Municipal Bonds which comprise the portfolio of a Series
of the Trust the following requirements, among others, were deemed to be of
primary importance: (a) a minimum rating of "A" by either Standard & Poor's
Corporation or Moody's Investors Service, Inc. (See "Description of Securities
Ratings"); (b) the price of the Municipal Bonds relative to other issues of
similar quality and maturity; (c) the diversification of the Municipal Bonds as
to purpose of issue; (d) the dates of maturity of the Municipal Bonds and (e)
the income to the Unitholders of the Series of the Trust. A Municipal Bond may
cease to be rated or its rating may be reduced below the minimum required as of
the Date of Deposit. Neither event requires the elimination of such investment
from the portfolio of a Series of the Trust, but may be considered in the
Sponsor's determination to direct the Trustee to dispose of the investment.
See "Investment Supervision" herein and "Schedule of Investments" in Part Two.
Interest on certain Municipal Bonds in certain of the National Series will
be a preference item for purposes of the alternative minimum tax. Accordingly,
such National Series may be appropriate only for investors who are not subject
to the alternative minimum tax.
The Sponsor may not alter the portfolio of a Series of the Trust, except
that certain of the Municipal Bonds may be sold upon the happening of certain
extraordinary circumstances. See "Investment Supervision."
Certain of the Municipal Bonds in the Series of the Trust may be 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 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. Accordingly, any
such call, redemption, sale or maturity will reduce the size and diversity of
such Series, and the net annual interest income of the Series and may reduce
the Estimated Long-Term Return and/or Estimated Current Return. See "Interest
and Estimated Long-Term and Current Returns." Each Trust portfolio contains a
listing of the sinking fund and call provisions, if any, with respect to each
of the debt obligations. Extraordinary optional redemptions and mandatory
redemptions result from the happening of certain events. Generally, events
that may permit the extraordinary optional redemption of Municipal Bonds or may
require the mandatory redemption of Municipal Bonds include, among others: a
final determination that the interest on the Municipal Bonds is taxable; the
substantial damage or destruction by fire or other casualty of the project for
which the proceeds of the Municipal Bonds were used; an exercise by a local,
state or Federal
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governmental unit of its power of eminent domain to take all or substantially
all of the project for which the proceeds of the Municipal 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 Municipal 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 Municipal 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 Municipal Bonds are issued on the issuer of the
Municipal Bonds or the user of the proceeds of the Municipal 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
Municipal Bonds; an overestimate of the costs of the project to be financed
with the proceeds of the Municipal Bonds resulting in excess proceeds of the
Municipal Bonds which may be applied to redeem Municipal Bonds; or an
underestimate of a source of funds securing the Municipal Bonds resulting in
excess funds which may be applied to redeem Municipal Bonds. The Sponsor is
unable to predict all of the circumstances which may result in such redemption
of an issue of Municipal Bonds.
The Sponsor, and the Trustee shall not be liable in any way for any
default, failure or defect in any Municipal Bond.
PORTFOLIO RISK INFORMATION. An investment in Units of a Series of the
Trust should be made with an understanding of the risks which an investment in
fixed rate debt obligations may entail, including the risk that the value of
the portfolio and hence of the Units will decline with increases in interest
rates. The value of the underlying Municipal Bonds will fluctuate inversely
with changes in interest rates. The uncertain economic conditions of recent
years, together with the fiscal measures adopted to attempt to deal with them,
have resulted in wide fluctuations in interest rates and, thus, in the value of
fixed rate debt obligations generally and long term obligations in particular.
The Sponsor cannot predict whether such fluctuations will continue in the
future.
Certain of the Municipal Bonds in some Series of the Trust may be general
obligations of a governmental entity that are backed by the taxing power of
such entity. All other Municipal Bonds in such Trusts 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 or other
specific revenue source. There are, of course, variations in the security of
the different Municipal Bonds in the Trusts, both within a particular
classification and between classifications, depending on numerous factors.
Certain of the Municipal Bonds in some Series of the Trust may be
obligations of issuers whose revenues are derived from services provided by
hospitals and other health care facilities, including nursing homes. In view
of this an investment in such Series should be made with an understanding of
the characteristics of such issuers and the risks that 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 will 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, economic developments in
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the service area, competition, 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, and government
regulation. Federal legislation has been enacted which implemented a system of
prospective Medicare reimbursement which may restrict the flow of revenues to
hospitals and other facilities which are reimbursed for services provided under
the Medicare program. Future legislation or changes in the areas noted above,
among other things, would affect all hospitals to varying degrees and,
accordingly, any adverse changes in these areas may adversely affect the
ability of such issuers to make payment of principal and interest on Municipal
Bonds held in such Series. Such adverse changes also may adversely affect the
ratings of the Municipal Bonds held in such Series of the Trust.
Certain of the Municipal Bonds in some Series of the Trust may be single
family mortgage revenue bonds, which are 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. 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
Municipal Bonds are subject to extraordinary mandatory redemption in whole or
in part from such prepayments of mortgage loans, a substantial portion of such
Municipal Bonds will probably be redeemed prior to their scheduled maturities
or even prior to their ordinary call dates. The redemption price of such
issues may be more or less than the offering price of such Municipal Bonds.
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 or, in some cases, from the
sale by the Municipal Bond issuer of the mortgage loans. Failure of the
originating financial institutions to make mortgage loans would be due
principally to the interest rates on mortgage loans funded from other sources
becoming competitive with the interest rates on the mortgage loans funded with
the proceeds of the single family mortgage revenue bonds. 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. Single family mortgage revenue bonds issued after December 31,
1980 were issued under Section 103A of the Internal Revenue Code of 1954, which
Section contains certain ongoing requirements relating to the use of the
proceeds of such Bonds in order for the interest on such Municipal Bonds to
retain its tax-exempt status. In each case, the issuer of the Municipal Bonds
has covenanted to comply with applicable ongoing requirements and bond counsel
to such issuer has issued an opinion that the interest on the Municipal Bonds
is exempt from Federal income tax under existing laws and regulations. There
can be no assurances that the ongoing requirements will be met. The failure to
meet these requirements could cause the interest on the Municipal Bonds to
become taxable, possibly retroactively from the date of issuance.
Certain of the Municipal Bonds in some Series of the Trust may be
obligations of issuers whose revenues are primarily derived from mortgage loans
to housing projects for low to moderate income families. The ability of such
issuers to make debt service payments will be affected by events and conditions
affecting financed projects, including, among other things, the achievement and
maintenance of sufficient occupancy levels and adequate rental income,
increases in taxes, employment and income conditions prevailing in local labor
markets, utility costs and other operating expenses, the managerial ability of
project managers, changes in laws and governmental regulations, the
appropriation of subsidies and social and economic trends affecting the
localities in which the projects are located. The occupancy of housing
projects may be adversely affected by high rent levels and income limitations
imposed under Federal and state programs. Like single family mortgage revenue
bonds, multi-family mortgage revenue bonds are subject to redemption and call
features, including extraordinary mandatory redemption features, upon
prepayment, sale or non-origination of mortgage
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loans as well as upon the occurrence of other events. Certain issuers of
single or multi-family 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 the housing Municipal Bonds held by the Trust, the
Sponsor has not had any direct communications with any of the issuers thereof,
but at the initial Date of Deposit it was not aware that any of the respective
issuers of such Municipal Bonds were actively considering the redemption of
such Municipal Bonds prior to their respective stated initial call dates.
However, there can be no assurance that an issuer of a Municipal Bond in a
Trust will not attempt to so redeem a Municipal Bond in such Trust.
Certain of the Municipal Bonds in some Series of the Trust may be
obligations of issuers whose revenues are derived from the sale of water and/or
sewerage services. Water and sewerage bonds are generally payable from user
fees. Problems faced by such issuers include the ability to obtain timely and
adequate rate increases, a decline in population 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. Issuers may have experienced these problems in
varying degrees.
Certain of the Municipal Bonds in some Series of the Trust may be
obligations of issuers whose revenues are primarily derived from the sale of
electric energy or natural gas. Utilities are generally subject to extensive
regulation by state utility commissions which, among other things, establish
the rates which may be charged and the appropriate rate of return on an
approved asset base. The problems faced by such issuers include the difficulty
in obtaining approval for timely and adequate rate increases from the governing
public utility commission, the difficulty in financing large construction
programs, the limitations on operations and increased costs and delays
attributable to environmental considerations, increased competition, recent
reductions in estimates of future demand for electricity in certain areas of
the county, the difficulty of the capital market in absorbing utility debt, the
difficulty in obtaining fuel at reasonable prices and the effect of energy
conservation. Issuers may have experienced 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 such Municipal Bonds to make
payments of principal and/or interest on such Municipal Bonds. The ability of
state and local joint action power agencies to make payments on bonds they
have issued is dependent in large part on payments made to them pursuant to
power supply or similar agreements. Courts in Washington and Idaho have held
that certain agreements between the Washington Public Power Supply System
("WPPSS") and the WPPSS participants are unenforceable because the participants
did not have the authority to enter into the agreements. While these decisions
are not specifically applicable to agreements entered into by public entities
in other states, they may cause a reexamination of the legal structure and
economic viability of certain projects financed by joint action power agencies,
which might exacerbate some of the problems referred to above and possibly lead
to legal proceedings questioning the enforceability of agreements upon which
payment of these bonds may depend.
Certain of the Municipal Bonds in some Series of the Trust may be
industrial revenue bonds ("IRBs"), including pollution control revenue bonds,
which are tax-exempt securities issued by states, municipalities, public
authorities or similar entities to finance the cost of acquiring, constructing
or improving various industrial projects. These projects are usually operated
by corporate entities. Issuers are obligated only to pay amounts due on the
IRBs to the extent that funds are available from the unexpended proceeds of the
IRBs or receipts or revenues of the issuer under an arrangement between the
issuer and the corporate operator of a
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project. The arrangement may be in the form of a lease, installment sale
agreement, conditional sale agreement or loan agreement, but in each case the
payments to the issuer are designed to be sufficient to meet the payments of
amounts due on 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 leveraged buy-outs or takeovers. The
IRBs in the Series of the Trust may be subject to special or extraordinary
redemption provisions which may provide for redemption at par or, with respect
to original issue discount bonds, at issue price plus the amount of original
issue discount accreted to the redemption date plus, if applicable, a premium.
The Sponsor cannot predict the causes or likelihood of the redemption of IRBs
or other Municipal Bonds in the Series of the Trust prior to the stated
maturity of such Municipal Bonds.
Certain of the Municipal Bonds in some Series of 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. 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 Municipal 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 a facility, lower cost of alternative
modes of transportation, scarcity of fuel and reduction or loss of rents.
Certain of the Municipal Bonds in some Series of 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. 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 the payment of school bonds in the Trusts. General problems
relating to college and university obligations would include the prospect of a
declining percentage of the population consisting of "college" age individuals,
possible inability to raise tuition and fees sufficiently to cover increased
operating costs, the uncertainty of continued receipt of Federal grants and
state funding and new 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.
Certain of the Municipal Bonds in some Series of the Trust may be Urban
Redevelopment Bonds ("URBs"). URBs 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
-10-
<PAGE> 11
pledged to purchasers. In some cases, a mortgage on the underlying project may
have been granted as security for the URBs. Regardless of the structure,
payment of the URBs is solely dependent upon the creditworthiness of the
operator of the project.
Certain of the Municipal Bonds in the Trust may be lease revenue bonds
whose revenues are derived from lease payments made by a municipality or other
political subdivision which is leasing equipment or property for use in its
operation. The risks associated with owning Municipal Bonds of this nature
include the possibility that appropriation of funds for a particular project or
equipment may be discontinued. The Sponsor cannot predict the likelihood of
non-appropriation of funds for these types of lease revenue Municipal Bonds.
Certain of the Municipal Bonds in some Series of the Trust may be "zero
coupon" bonds, i.e., an original issue discount bond that does not provide for
the payment of current interest. Zero coupon bonds are purchased at a deep
discount because the buyer obtains only the right to receive a final payment at
the maturity of the bond and does not receive any periodic interest payments.
The effect of owning deep discount bonds which do not make current interest
payments (such as the zero coupon bonds) is that a fixed yield is earned not
only on the original investment but also, in effect, on all discount earned
during the life of such obligation. This implicit reinvestment of earnings at
the same rate eliminates the risk of being unable to reinvest the income on
such obligation at a rate as high as the implicit yield on the discount
obligation, but at the same time eliminates the holder's ability to reinvest at
higher rates in the future. For this reason, zero coupon bonds are subject to
substantially greater price fluctuations during periods of changing market
interest rates than are securities of comparable quality which pay interest
currently. For the Federal tax consequences of original issue discount bonds
such as the zero coupon bonds, see "Tax Status of the Trust."
Investors should be aware that many of the Municipal Bonds in some Series
of the Trust are subject to continuing requirements such as the actual use of
Municipal Bond proceeds or manner of operation of the project financed from
Municipal Bond proceeds that may affect the exemption of interest on such
Municipal Bonds from Federal income taxation. Although at the time of issuance
of each of the Municipal Bonds in the Trusts an opinion of bond counsel was
rendered as to the exemption of interest on such obligations from Federal
income taxation, there can be no assurance that the respective issuers or other
obligors on such obligations will fulfill the various continuing requirements
established upon issuance of the Municipal Bonds. A failure to comply with
such requirements may cause a determination that interest on such obligations
is subject to Federal income taxation, perhaps even retroactively from the date
of issuance of such Municipal Bonds, thereby reducing the value of the
Municipal Bonds and subjecting Unitholders to unanticipated tax liabilities.
Federal bankruptcy statutes relating to the adjustment of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or
consent of creditors, which proceedings could result in material and adverse
modification or alteration of the rights of holders of obligations issued by
such subdivisions or authorities.
Certain of the Municipal Bonds in some Series of the Trust represent "moral
obligations" of another governmental entity other than the issuer. In the
event that the issuer of the Municipal Bond defaults in the
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<PAGE> 12
repayment thereof, such other governmental entity lawfully may, but is not
obligated to, discharge the obligation of the issuer to repay such Municipal
Bond.
To the best of the Sponsor's knowledge, as of the date of the Prospectus,
there is no litigation pending with respect to any Municipal Bonds which might
reasonably be expected to have a material adverse effect on the Trust or any
Series thereof. Although the Sponsor is unable to predict whether any
litigation may be instituted, or if instituted, whether such litigation might
have a material adverse effect on the Trust or any Series, the Trust received
copies of the opinions of bond counsel given to the issuing authorities at the
time of original delivery of each of the Municipal Bonds to the effect that the
Municipal Bonds had been validly issued and that the interest thereon is exempt
from Federal income taxes.
DISTRIBUTION REINVESTMENT
Each Unitholder of the Trust may elect to have distributions of principal
(including capital gains, if any) or interest or both automatically invested
without charge in shares of any mutual fund underwritten or advised by KFS (the
"Kemper Funds"), other than those Kemper Funds sold with a contingent deferred
sales charge. Since the portfolio securities and investment objectives of such
Kemper Funds may differ significantly from that of the Trust, Unitholders
should carefully consider the consequences, before selecting such Kemper Funds
for reinvestment. Detailed information with respect to the investment
objectives and the management of the Kemper Funds is contained in their
respective prospectuses, which can be obtained from the Sponsor, and many
investment firms, upon request. An investor should read the appropriate
prospectus prior to making the election to reinvest. Unitholders who desire to
have such distributions automatically reinvested should inform their broker at
the time of purchase or should file with the Program Agent referred to below a
written notice of election.
Unitholders who are receiving distributions in cash may elect to
participate in distribution reinvestment by filing with the Program Agent an
election to have such distributions reinvested without charge. Such election
must be received by the Program Agent at least ten days prior to the Record
Date applicable to any distribution in order to be in effect for such Record
Date. Any such election shall remain in effect until a subsequent notice is
received by the Program Agent. See "Distributions to Unitholders."
The Program Agent is Investors Fiduciary Trust Company. All inquiries
concerning participation in distribution reinvestment should be directed to
Kemper Service Company, service agent for the Program Agent at P.O. Box 419430,
Kansas City, Missouri 64173-0216, telephone (800) 422-2848.
INTEREST AND ESTIMATED LONG-TERM AND CURRENT RETURNS
As of the opening of business on the date indicated therein, the Estimated
Current Returns and the Estimated Long-Term Returns for the Trust were as set
forth under "Essential Information" in Part Two of this Prospectus.
Unitholders choosing distributions quarterly or semi-annually will receive a
slightly higher rate because of the lower Trustee's fees and expenses under
such plans. Estimated Current Returns are 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, the sponsor and the Evaluator and with the
principal prepayment, redemption, maturity, exchange or sale of Securities
while
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<PAGE> 13
the Public Offering Price will vary with changes in the offering price of the
underlying Securities; therefore, there is no assurance that the present
Estimated Current Returns will be realized in the future. Estimated Long-Term
Returns are calculated using a formula which (1) 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 of the Securities in the Trust and
(2) takes into account the expenses and sales charge associated with the Trust
Unit. Since the market values and estimated retirements of the Securities and
the expenses of the Trust will change, there is no assurance that the present
Estimated Long-Term Returns will be realized in the future. Estimated Current
Returns and Estimated Long-Term Returns are expected to differ because the
calculation of Estimated Long-Term Returns reflects the estimated date and
amount of principal returned while Estimated Current Returns calculations
include only net annual interest income and Public Offering Price.
TAX STATUS OF THE TRUST
All Municipal Bonds in the Series of the Trust Fund were accompanied by
copies of opinions of bond counsel given to the issuers thereof at the time of
original delivery of the Municipal Bonds to the effect that the interest
thereon is exempt from all Federal income taxes. In connection with the
offering of Units of the Trust Funds, neither the Sponsor, the Trustee, the
auditors nor their respective counsel have made any review of the proceedings
relating to the issuance of the Municipal Bonds or the basis for such opinions.
Gain realized on the sale or redemption of the Municipal Bonds by the Trustee
or of a Unit by a Unitholder is, however, includable in gross income for
Federal income tax purposes. Such gain does not include any amounts received
in respect of accrued interest or earned original issue discount. It should be
noted that under recently enacted legislation described below that subjects
accretion of market discount on tax-exempt bonds to taxation as ordinary
income, gain realized on the sale or redemption of Municipal Bonds by the
Trustee or of Units by a Unitholder that would have been treated as capital
gain under prior law is treated as ordinary income to the extent it is
attributable to accretion of market discount. Market discount can arise based
on the price a Trust Fund pays for Municipal Bonds or the price a Unitholder
pays for his or her Units. In addition, bond counsel to the issuing
authorities rendered opinions as to the exemption of interest on such Bonds,
when held by residents of the state in which the issuers of such bonds are
located, from state income taxes and, where applicable, local income taxes.
Neither the Sponsor, the Trustee, the Independent Auditors nor their
respective counsel have made any review of the proceedings relating to the
issuance of the Municipal Bonds or the bases for such opinions.
At the time of the closing for the Trusts, Chapman and Cutler, counsel for
the Sponsor, rendered an opinion under then existing law substantially to the
effect that:
Each Series of the Trust Fund 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
when distributed to Unitholders, except to the extent such interest is
subject to the alternative minimum tax, an additional tax on branches of
foreign corporations and the environmental tax (the "Superfund Tax"), as
noted below.
Each Unitholder is considered to be the owner of a pro rata portion of
each asset of the respective Trust Fund in the proportion that the number
of Units of such Trust Fund held by
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<PAGE> 14
him bears to the total number of Units outstanding of such Trust Fund under
subpart E, subchapter J of chapter 1 of the Code and will have a taxable
event when such Trust Fund disposes of a Municipal Bond, or when the
Unitholder redeems or sells his Units. Unitholders must reduce the tax
basis of their Units for their share of accrued interest received by a
Trust Fund, if any, on Municipal Bonds delivered after the Unitholders pay
for their Units to the extent that such interest accrued on such Municipal
Bonds during the period from the Unitholder's settlement date to the date
such Municipal Bonds are delivered to a Trust Fund 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 Municipal Bonds (whether by sale, payment on maturity, redemption or
otherwise), gain or loss is recognized to the Unitholder. 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
earned original issue discount and amortized bond premium, if any) is
determined by apportioning the cost of the Units among each of the Trust
Fund's assets ratably according to value as of the date of acquisition of
the Units. The tax cost 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 equal to his original cost.
Any proceeds paid under individual policies obtained by issuers of
Bonds which represent maturing interest on defaulted obligations 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 the
normal course by the issuer of the defaulted obligations.
Sections 1288 and 1272 of the Internal Revenue Code of 1986 (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
Municipal Bond, depending on the date the Municipal Bond was issued. In
addition, special rules apply if the purchase price of a Municipal 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 Municipal Bond on the date a Unitholder acquires his Units, and the
price the Unitholder pays for his Units. Investors with questions regarding
these Code sections should consult with their tax advisers.
"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). 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
Fund holds a Municipal Bond would be recognized as ordinary income by the
Unitholders when principal payments are received on the Municipal 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.
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<PAGE> 15
In the case of all Unitholders (both individuals and corporations),
interest on all or certain Bonds held by certain Series of the Trust may be
treated as an item of tax preference for purposes of computing the alternative
minimum tax. Accordingly, investments in Units may subject Unitholders to (or
result in increased liability under) the alternative minimum tax. Due to the
complexity of the alternative minimum tax, Unitholders are urged to consult
their tax advisers regarding the impact, if any, of the alternative minimum
tax.
In addition, in the case of certain corporations, the alternative
minimum tax and the Superfund Tax depend upon the corporation's alternative
minimum taxable income, which is the corporation's taxable income with certain
adjustments. One of the adjustment items used in computing the alternative
minimum taxable income and the Superfund Tax of a corporation (other than an S
Corporation, Regulated Investment Company, Real Estate Investment Trust, or
REMIC) is an amount equal to 75% of the excess of such corporation's "adjusted
current earnings" over an amount equal to its alternative minimum taxable
income (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 Municipal Bonds in a Trust Fund. Unitholders
are urged to 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 profit 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 a Trust Fund 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. Investors with questions regarding these issues should consult with
their tax advisers.
In the case of certain Municipal Bonds in the Trust Funds, the opinions of
bond counsel indicate that interest on such securities received by a
"substantial user" of the facilities being financed with the proceeds of these
securities or persons related thereto, for periods while such securities are
held by such a user or related person, will not be excludable from Federal
gross income, although interest on such securities received by others would be
excludable from Federal gross income. "Substantial user" and "related person"
are defined under 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.
Under existing law, the Trust Funds are not associations taxable as a
corporation and the income of the Trust Funds will be treated as the income of
the Unitholders under the income tax laws of the State of Missouri.
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 issuances 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 issuing
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<PAGE> 16
authorities. Neither the Sponsor nor Chapman and Cutler has made any special
review for the Trust Funds of the proceedings relating to the issuance of the
Bonds or of the basis for such opinions.
For taxpayers other than corporations, net capital gains are presently
subject to a maximum marginal stated tax rate of 28 percent. However, it
should be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which ordinary
income and capital gains are taxed. Under the Code, taxpayers must disclose to
the Internal Revenue Service the amount of tax-exempt interest earned during
the year.
Section 86 of the Code, in general, provides that fifty percent of Social
Security benefits are includable in gross income to the extent that the sum of
"modified adjusted gross income" plus fifty percent 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 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 includable 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 percent of Social Security benefits are includable in gross
income to the extent that the sum of "modified adjusted gross income" plus
fifty percent of Social Security benefits received exceeds an "adjusted base
amount." The adjusted base amount is $34,000 for married 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 Fund, will be subject to tax. A taxpayer whose
adjusted gross income already exceeds the base amount or the adjusted base
amount must include fifty percent or eighty-five percent, 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.
For a discussion of the state tax status of income earned on Units of a
state trust, see the discussion of tax status for the applicable trust. Except
as noted therein, the exemption of interest on state and local obligations for
Federal income tax purposes discussed above does not necessarily result in
exemption under the income or other tax laws of any state or city. The laws of
the several states vary with respect to the taxation of such obligations.
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<PAGE> 17
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of each Series of the Trust are offered at
the Public Offering Price, plus accrued interest to the expected settlement
date. The Public Offering Price per Unit is equal to the aggregate bid side
evaluation of the Municipal Bonds in the Series' portfolio (as determined
pursuant to the terms of a contract with the Evaluator, by Muller Data
Corporation a non-affiliated firm regularly engaged in the business of
evaluating, quoting or appraising comparable securities), plus or minus cash,
if any, in the Principal Account, held or owned by such Series of the Trust,
divided by the number of outstanding Units of the Series, plus the sales charge
applicable. The sales charge is based upon the dollar weighted average
maturity of the Trust and is determined in accordance with the table set forth
below. For purposes of this computation, Municipal Bonds will be deemed to
mature on their expressed maturity dates unless: (a) the Municipal Bonds have
been called for redemption or funds or securities have been placed in escrow to
redeem them on an earlier call date, in which case such call date will be
deemed to be the date upon which they mature; or (b) such Municipal Bonds are
subject to a "mandatory tender", in which case such mandatory tender will be
deemed to be the date upon which they mature. The effect of this method of
sales charge computation will be that different sales charge rates will be
applied to the Trust based upon the dollar weighted average maturity of such
Trust's portfolio, in accordance with the following schedule:
<TABLE>
<CAPTION>
DOLLAR PERCENT OF PERCENT OF NET
WEIGHTED AVERAGE PUBLIC OFFERING AMOUNT
YEARS TO MATURITY PRICE INVESTMENT
----------------- --------------- --------------
<S> <C> <C>
1 to 3.99 years.............. 2.00% 2.041%
4 to 7.99 years.............. 3.50 3.627
8 to 14.99 years............. 4.50 4.712
15 or more years............. 5.50 5.820
</TABLE>
The sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE
YEARS TO MATURITY*2
4 TO 7.99 8 TO 14.99 15 OR MORE
--------------------------------------
AMOUNT OF INVESTMENT SALES CHARGE (% OF PUBLIC OFFERING PRICE)
-------------------- -----------------------------------------
<S> <C> <C> <C>
$1,000 to $99,999............ 3.50% 4.50% 5.50%
$100,000 to $499,999......... 3.25 4.25 5.00
$500,000 to $999,999......... 3.00 4.00 4.50
$1,000,000 or more........... 2.75 3.75 4.00
</TABLE>
- -----------------
*IF THE DOLLAR WEIGHTED AVERAGE MATURITY OF THE TRUST IS FROM 1 TO 3.99
YEARS, THE SALES CHARGE IS 2% AND 1.5% OF THE PUBLIC OFFERING FOR PURCHASES
OF $1 TO $249,999 AND $250,000 OR MORE, RESPECTIVELY.
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<PAGE> 18
The reduced sales charges as shown on the chart above will apply to all
purchases of Units on any one day by the same purchaser from the same firm and
for this purpose purchases of Units of a Series of the Trust will be aggregated
with concurrent purchases of Units of any other unit investment trust that may
be offered by the Sponsor. Additionally, Units purchased in the name of a
spouse or child (under 21) of such purchaser will be deemed to be additional
purchases by such purchaser. The reduced sales charges will also be applicable
to a trust or other fiduciary purchasing for a single trust estate or single
fiduciary account.
The Sponsor intends to permit officers, directors and employees of the
Sponsor and, at the discretion of the Sponsor and Evaluator, registered
representatives of selling firms to purchase Units of the Trust without a sales
charge, although a transaction processing fee may be imposed on such trades.
The Public Offering Price per Unit of a Series of the Trust on the date
shown on the cover page of Part Two of the Prospectus or on any subsequent date
will vary from the amounts stated under "Essential Information" in Part Two due
to fluctuations in the prices of the underlying Municipal Bonds. The aggregate
bid side evaluation of the Municipal Bonds shall be determined (a) on the basis
of current bid prices of the Municipal Bonds, (b) if bid prices are not
available for any particular Municipal Bond, on the basis of current bid prices
for comparable bonds, (c) by determining the value of the Municipal Bonds on
the bid side of the market by appraisal, or (d) by any combination of the
above.
The foregoing evaluations and computations shall be made as of the
Evaluation Time stated under "Essential Information" in Part Two, on each
business day effective for all sales made during the proceeding 24-hour period,
and for purposes of resales and repurchase of Units.
The interest on the Municipal Bonds in a Series of the Trust, less the
estimated fees and expenses, is estimated to accrue in the annual amounts per
Unit set forth under "Essential Information" in Part Two. The amount of net
interest income which accrues per Unit may change as Municipal Bonds mature or
are redeemed, exchanged or sold, or as the expenses of such Series of the Trust
change or as the number of outstanding Units of the Series changes.
Payment for Units must be made on or before the fifth business day
following purchase (the "settlement date"). A purchaser becomes the owner of
Units on the settlement date. If a Unitholder desires to have certificates
representing Units purchased, such certificates will be delivered as soon as
possible following a written request therefor. For information with respect to
redemption of Units purchased, but as to which certificates requested have not
been received, see "Redemption" below.
ACCRUED INTEREST. Accrued interest consists of two elements. The first
element arises as a result of accrued interest which is the accumulation of
unpaid interest on a bond from the last day on which interest thereon was paid.
Interest on Bonds in the Trust Fund is actually paid either monthly or
semi-annually to the Trust Fund. However, interest on the Bonds in the Trust
Funds is accounted for daily on an accrual basis. Because of this, a Trust
Fund always has an amount of interest earned but not yet collected by the
Trustee by the Trustee because of coupons that are not yet due. For this
reason, the Public Offering Price of Units will have added to it the
proportionate share of accrued and undistributed interest to the date of
settlement.
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<PAGE> 19
The Trustee advanced the amount of accrued interest as the First Settlement
Date and the same was distributed to the Sponsor. Such advance was repaid to
the Trustee through the first receipts of interest received on the Municipal
Bonds. Consequently, the amount of accrued interest added to the Public
Offering Price of Units included only accrued interest arising after the First
Settlement Date of a Trust Fund, less any distributions from the Interest
Account subsequent to the First Settlement Date. Since the First Settlement
Date was the date of settlement for anyone who ordered Units on the Date of
Deposit, no accrued interest was added to the Public Offering Price of Units
ordered on the Date of Deposit.
The second element of accrued interest arises because of the structure of
the Interest Account. The Trustee has no cash for distribution to Unitholders
until it receives interest payments on the Bonds in a Trust Fund. The Trustee
is obligated to provide its own funds, at times, in order to advance interest
distributions. The Trustee will recover these advancements when such interest
is received. Interest Account balances are established so that it will not be
necessary on a regular basis for the Trustee to advance its own funds in
connection with such interest distributions and since the funds held by the
Trustee will be used by it to earn interest thereon, it benefits thereby (see
"Expenses of the Trust").
Accrued interest is computed as of the initial Record Date of the Trust
Funds. On the date of the first distribution of interest to Unitholders after
the First Settlement Date, the interest collected by the Trustee will be
sufficient to repay its advances, to allow for accrued interest under the
monthly, quarterly and semi-annual plans of distribution and to generate enough
cash to commence distributions to Unitholders. If a Unitholder sells or
redeems all or a portion of his Units or if the Bonds in a Trust Fund are sold
or otherwise removed or if a Trust Fund is liquidated, he will receive at that
time his proportionate share of the accrued interest computed to the settlement
date in the case of sale or liquidation and to the date of tender in the case
of redemption in such Trust Fund.
PUBLIC DISTRIBUTION OF UNITS. The Sponsor has qualified Units for sale in
all states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Sales may be made
to or through dealers at prices which represent discounts from the Public
Offering Price as set forth below. Certain commercial banks are making Units
of the Trust available to their customers on an agency basis. A portion of the
sales charge paid by their customers is retained by or remitted to the banks,
in an amount as shown in the tables below. Under the Glass-Steagall Act, banks
are prohibited from underwriting Trust Units; however, the Glass-Steagall Act
does permit certain agency transactions and the banking regulators have
indicated that these particular agency transactions are permitted under such
Act. In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
-19-
<PAGE> 20
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE
YEARS TO MATURITY*3
4 TO 7.99 8 TO 14.99 15 OR MORE
----------------------------------------------------------
DISCOUNT PER UNIT
AMOUNT OF INVESTMENT (% OF PUBLIC OFFERING PRICE)
-------------------- ----------------------------
<S> <C> <C> <C>
$1,000 to $99,999 . . . . . . 2.00% 3.00% 4.00%
$100,000 to $499,999 . . . . 1.75 2.75 3.50
$500,000 to $999,999 . . . . 1.50 2.50 3.00
$1,000,000 or more . . . . . 1.25 2.25 2.50
</TABLE>
The Sponsor reserves the right to change the discounts set forth above
from time to time. In addition to such discounts, the Sponsor may, from time to
time, pay or allow an additional discount, in the form of cash or other
compensation, to dealers employing registered representatives who sell, during a
specified time period, a minimum dollar amount of Units of the Trust and other
unit investment trusts underwritten by the Sponsor. The difference between the
discount and the sales charge will be retained by the Sponsor.
The Sponsor reserves the right to reject, in whole or in part, any order
for the purchase of Units.
PROFITS OF SPONSOR. The Sponsor will retain a portion of the sales charge
of each Unit sold, representing the difference between the Public Offering
Price of the Units and the discounts allowed to firms selling such Units. The
Sponsor may realize additional profit or loss as a result of the possible
change in the daily evaluation of the Municipal Bonds in a Series of the Trust,
since the value of its inventory of Units may increase or decrease.
MARKET FOR UNITS
While not obligated to do so, the Sponsor intends to, and certain of the
Underwriters may, subject to change at any time, maintain a market for Units of
each Series of the Trust offered hereby and to continuously offer to purchase
said Units at prices, as determined by the Evaluator, based on the aggregate
bid prices of the underlying Municipal Bonds of such Series, together with
accrued interest to the expected date of settlement. Accordingly, Unitholders
who wish to dispose of their Unit should inquire of their bank or broker as to
the current market price in order to determine whether there is in existence
any price in excess of the Redemption Price and, if so, the amount thereof.
The offering price of any Units resold by the Sponsor or Underwriters will
be in accord with that described in the currently effective Prospectus
describing such Units. Any profit or loss resulting from the resale of such
Units will belong to the Sponsor and/or the Underwriters. The Sponsor and/or
the Underwriters may suspend or discontinue purchases of Units of any Trust
Fund if the supply of Units exceeds demand, or for other business reasons.
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* If the dollar weighted average maturity of a trust is from 1 to 3.99 years,
the concession or agency commission is 1.00% of the public offering price.
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REDEMPTION
If more favorable terms do not exist in the over-the-counter market
described above, Unitholders of a Series of the Trust may cause their Units to
be redeemed by the Trustee by making a written request to the Trustee,
Investors Fiduciary Trust Company, P.O. Box 419430, Kansas City, Missouri
64173-0216 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 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 redeemed. If the amount of the
redemption is $25,000 or less and the 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
Securities Transfer Agents Medallion Program ("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 the Units has
been received by the purchaser.
Redemption shall be made by the Trustee on the seventh calendar day
following the day on which a tender for redemption is received, or if the
seventh calendar day is not a business day, on the first business day prior
thereto (the "Redemption Date"), by payment of cash equivalent to the
Redemption Price for such series, determined as set forth below under
"Computation of Redemption Price", as of the evaluation time stated under
"Essential Information" in Part Two, next following such tender, multiplied by
the number of Units being redeemed. The price received upon redemption might
be more or less than the amount paid by the Unitholder depending on the value
of the Municipal Bonds in the portfolio at the time of redemption. Any Units
redeemed shall be cancelled and any undivided fractional interest in that
Series of the Trust will be extinguished.
Under regulations issued by the Internal Revenue Service, the Trustee is
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 tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker. However, any time a Unitholder elects to tender Units
for redemption, such Unitholder should make sure that the Trustee has been
provided a certified tax identification number in order to avoid this possible
"back-up withholding." In the event the Trustee has not been previously
provided such number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing interest shall be withdrawn
from the Interest Account for such Series to the extent that funds are
available for such purpose. All other amounts paid on redemption shall be
withdrawn from the Principal Account of such Series. The Trustee is empowered
to sell Municipal Bonds from the portfolio of a Series of the Trust in order to
make funds available for the redemption of Units of such Series. Such sale may
be required when Municipal Bonds would not otherwise be sold and might result
in lower prices than might otherwise be realized. To the extent Municipal
Bonds are sold, the size and diversity of that Series will be reduced.
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The Trustee is irrevocably authorized in its discretion, if an Underwriter
does not elect to purchase any Unit tendered for redemption, in lieu of
redeeming such Units, to sell such Units in the over-the counter market for the
account of tendering Unitholders at prices which will return to such
Unitholders amounts in cash, net after brokerage commissions, transfer taxes
and other charges, equal to or in excess of Redemption Price for such Units.
In the event of any such sale, the Trustee shall pay the net proceeds thereof
to the Unitholders on the day they would otherwise be entitled to receive
payment of the Redemption Price.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Municipal Bonds is not reasonably practicable or it
is not reasonably practicable to fairly determine the value of the underlying
Municipal Bonds in accordance with the Trust Agreements; or (3) for such other
period as the Securities and Exchange Commission may by order permit. The
Trustee is not liable to any person or in any way for any loss or damage which
may result from any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price for Units of each
Series of the Trust is computed by the Evaluator as of the evaluation time
stated under "Essential Information" in Part Two next occurring after the
tendering of a Unit for redemption and on any other business day desired by it,
by
A. adding (1) the cash on hand in such Series of the Trust; (2) the
aggregate value of each issue of the Municipal Bonds held in such Series of the
Trust, as determined by the Evaluator on the basis of bid prices therefor; and
(3) interest accrued and unpaid on the Municipal Bonds in such Series of the
Trust as of the date of computation; and
B. deducting therefrom (1) amounts representing any applicable taxes or
governmental charges payable out of the Series of the Trust and for which no
deductions have been previously made for the purpose of additions to the
Reserve Account described under "Expenses of the Trust"; (2) amounts
representing estimated accrued expenses of such Series including, but not
limited to, fees and expenses of the Trustee (including legal and auditing
fees), the Evaluator, the Sponsor, and bond counsel, if any; (3) cash held for
distribution to Unitholders of record as of the business day prior to the
evaluation being made; and (4) other liabilities incurred by such Series; and
C. finally, dividing the results of such computation by the number of
Units of such Series of the Trust outstanding as of the date thereof.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of a Series of the Trust will not
be evidenced by a certificate unless a Unitholder or the Unitholder's
registered broker/dealer or the clearing agent for such broker/dealers makes a
written request to the Trustee. Units are transferable by making a written
request to the Trustee and, in the case of Units evidenced by a certificate,
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.
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<PAGE> 23
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any whole Unit multiple thereof subject to any
minimum requirement established by the sponsor from time to time. Any
certificate issued will be numbered serially for identification, issued in
fully registered form and will be transferable only on the books of the
trustee. The Trustee may require a Unitholder to pay a reasonable fee, to be
determined in the sole discretion of the Trustee, for each certificate
re-issued or transferred, and to pay any governmental charge that may be
imposed in connection with each such transfer or interchange. The Trustee at
the present time does not intend to charge for the normal transfer or
interchange of certificates. Destroyed, stolen, mutilated or lost certificates
will be replaced upon delivery to the Trustee of satisfactory indemnity
(generally amounting to 3% of the market value of the Units), affidavit of
loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Interest Distributions: Interest received
by a Series of the Trust, including any portion of the proceeds from a
disposition of Municipal Bonds which represents accrued interest, is credited
by the Trustee to the Interest Account for such Series. All other receipts are
credited by the Trustee to a separate Principal Account for such Series.
During each year the distributions to the Unitholders of each Series of the
Trust as of each Record Date (see "Essential Information" in Part Two) will be
made on the following Distribution Date or shortly thereafter and shall consist
of an amount substantially equal to one-twelfth, one-quarter or one-half
(depending on the distribution option selected) of such Unitholders' pro rata
share of the estimated annual income to the Interest Account for such Series,
after deducting estimated expenses. However, interest to which Unitholders of
a Series of the Trust are entitled will at most times exceed the amount
available for distribution, there will almost always remain an item of accrued
interest that is accounted for daily and is added to the value of each Unit.
If Unitholders sell or redeem all or a portion of their Units, they will be
paid their proportionate share of the accrued interest of such Series of the
Trust to, but not including, the fifth business day after the date of sale or
to the date of tender in the case of a redemption.
Persons who purchase Units between a Record Date and a Distribution Date
will receive their first distributions on the second Distribution Date
following their purchase of Units. Since interest on Municipal Bonds in each
Series of the Trust is payable at varying intervals, usually in semi-annual
installments, and distributions of income are made to Unitholders of the Series
of the Trust at what may be different intervals from receipt of interest, the
interest accruing to such Series of the Trust may not be equal to the amount of
money received and available for distribution from the Interest Account for
such Series. Therefore, on each Distribution Date the amount of interest
actually on deposit in the Interest Account and available for distribution may
be slightly more or less than the interest distribution made. In order to
eliminate fluctuations in interest distributions resulting from such variances,
the Trustee is authorized by the Trust Agreements to advance such amounts as
may be necessary to provide interest distributions of approximately equal
amounts. The Trustee will be reimbursed, without interest, for any such
advances from funds available in the Interest Account of such Series.
Unitholders purchasing Units will initially receive distributions in
accordance with the election of the prior owner. Unitholders desiring to
change their distribution option, if applicable, may do so by sending written
notice to the Trustee, together with their certificate (if one was issued).
Certificates should only be sent by registered or certified mail to minimize
the possibility of loss. If written notice and any certificate are received by
the Trustee not later than January 1 or July 1 of a year, the change will
become effective on January 2 for distributions commencing with February 15 or
August 15, respectively, of that year. If notice is not received by the
Trustee, the Unitholder will be deemed to have elected to continue with the
same option.
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<PAGE> 24
Principal Distributions: The Trustee will distribute on each Distribution
Date or shortly thereafter, to each Unitholder of Record of a Series of the
Trust on the preceding Record Date, an amount substantially equal to such
Unitholders' pro rata share of the cash balance, if any, in the Principal
Account of such Series (but not less than $1.00 per Unit or $.001 per Unit for
certain Series) computed as of the close of business on the preceding Record
Date.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will
furnish or cause to be furnished to each Unitholder a statement of the amount
of interest and the amount of other receipts, if any, which are being
distributed, expressed in each case as a dollar amount per Unit.
The accounts of each Series of the Trust are required to be audited
annually, at the Series' expense, by independent auditors designated by the
Sponsor, unless the Trustee determines that such an audit would not be in the
best interest of the Unitholders of such Series of the Trust. The accountants'
report will be furnished by the Trustee to any Unitholder of such Series of the
Trust upon written 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 calendar year was a
Unitholder of such Series of the Trust a statement covering the calendar year,
setting forth for the applicable series:
A. As to the Interest Account for such Series:
1. The amount of interest received on the Municipal Bonds and the
percentage of such amount by states and territories in which the issuers of
such Bonds are located;
2. The amount paid from the Interest account representing accrued
interest of any Units redeemed;
3. The deductions from the Interest Account for applicable taxes, if
any, fees and expenses of the Trustee, the Evaluator, and, if any, of bond
counsel;
4. Any amounts credited by the Trustee to a Reserve Account described
under "Expense of the Trust"; and
5. The net amount remaining after such payment and deductions,
expressed both as a total dollar amount and a dollar amount per Unit
outstanding on the last business day of such calendar year.
B. As to the Principal Account for such Series:
1. The dates of the maturity, liquidation or redemption of any of the
Municipal Bonds and the net proceeds received therefrom excluding any
portion credited to the Interest Account;
2. The amount paid from the Principal Account representing the
principal of any Units redeemed;
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3. The deductions from the Principal Account for payment of
applicable taxes, if any, fees and expenses (including auditing fees) of
the Trustee, the Evaluator, and, if any, of bond counsel;
4. The amounts credited by the Trustee to a Reserve Account described
under "Expenses of the Trust"; and
5. The net amount remaining after distributions of principal and
deductions, expressed both as a dollar amount and as a dollar amount per
Unit outstanding on the last business day of such calendar year.
C. The following information:
1. A list of the Municipal Bonds in such Series as of the last
business day of such calendar year;
2. The number of Units of such Series outstanding on the last
business day of such calendar year;
3. The Redemption Price of such Series based on the last Trust
Evaluation made during such calendar year;
4. The amount actually distributed during such calendar year from
the Interest and Principal Accounts of such Series separately stated, expressed
both as total dollar amounts and as dollar amounts per Unit outstanding on the
Record Date for each such distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the
Trustee for redemption. No Unitholder shall have the right to control the
operation and management of the Trust or any Series thereof in any manner,
except to vote with respect to amendment of the Trust Agreements or termination
of a Series of the Trust. The death or incapacity of any Unitholder will not
operate to terminate any Series of the Trust nor entitle legal representatives
or heirs to claim an accounting or to bring any action or proceeding in any
court for partition for winding up of the Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolio of a Series of the Trust by the
purchase, sale or substitution of Municipal Bonds, except in the special
circumstances noted below. Thus, with the exception of the redemption or
maturity of Municipal Bonds in accordance with their terms, and/or the sale of
Municipal Bonds to meet redemption requests, the assets of each Series of the
Trust will remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Municipal Bonds the value
of which has been affected by certain adverse events including institution of
certain legal proceedings or decline in price or the occurrence of other market
factors, including advance refunding, so that in the opinion of the Sponsor the
retention of such Bonds in a Series of the Trust would be detrimental to the
interest of the Unitholders. The proceeds from any such sales, exclusive of
any portion which represents accrued interest, will be credited to the
Principal Account of such Series for distribution to the Unitholders.
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The Sponsor is required to instruct the Trustee to reject any offer made by
an issuer of the Municipal Bonds to issue new obligation in exchange or
substitution for any of such Municipal Bonds pursuant to a refunding financing
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 (a) the issuer is in default with respect to such Municipal
Bonds; or (b) in the written opinion of the Sponsor, there is a reasonable
basis to believe that the issuer will default with respect to such Municipal
Bonds in the foreseeable future. Any obligations 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 the Municipal 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 of such Series of such Series of the Trust
registered on the books of the Trustee, identifying the Municipal Bonds
eliminated and the Municipal Bonds substituted therefor.
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee, Investors Fiduciary Trust Company, is a trust
company specializing in investment related services, organized and existing
under the laws of Missouri, having its trust office at 127 West 10th Street,
Kansas City, Missouri 64105. The Trustee is subject to supervision and
examination by the Division of Finance of the State of Missouri and the Federal
Deposit Insurance Corporation. Investors Fiduciary Trust Company is jointly
owned by DST Systems, Inc. and Kemper Financial Services, Inc., an affiliate of
the Sponsor.
The Trustee, whose duties are ministerial in nature, has not participated
in selecting the portfolio of any Series of the Trust. For information
relating to the responsibilities of the Trustee under the Trust Agreements,
reference is made to the material set forth under "Unitholders."
In accordance with the Trust Agreements, the Trustee shall keep records of
all transactions at its office. Such records shall include the name and
address of, and the number of Units held by, every Unitholder of a Series of
the Trust. Such books and records shall be open to inspection by any
Unitholder of such Series at all reasonable times during the usual business
hours. The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or Federal statute, rule or
regulation. The Trustee shall keep a certified copy or duplicate original of
the Trust Agreements on file in its office available for inspection at all
reasonable times during usual business hours by any Unitholder of such Series,
together with a current list of the Municipal Bonds held in such Series of the
Trust. Pursuant to the Trust Agreements, the Trustee may employ one or more
agents for the purpose of custody and safeguarding of Municipal Bonds
comprising the portfolio.
Under the Trust Agreements, the Trustee or any successor trustee may resign
and be discharged of its duties created by the Trust Agreements 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 sixty 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 thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case the Trustee becomes
incapable of acting or is adjudged a bankrupt or is taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor trustee
as provided in the Trust Agreements. Notice of such removal and appointment
shall be mailed to each Unitholder by the Sponsor. Upon execution of a written
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acceptance of such appointment by a successor trustee, all the rights, powers,
duties and obligations of the original Trustee shall vest in successor.
The Trustee shall be a corporation organized under the laws of the United
States or any state thereof, which is authorized under such laws to exercise
trust powers. The Trustee shall have at all times an aggregate capital,
surplus and undivided profits of not less than $5,000,000.
THE EVALUATOR. Kemper Unit Investment Trusts, a service of Kemper
Securities, Inc., the Sponsor, also serves as Evaluator. The Evaluator may
resign or be removed by the Trustee in which event the Trustee 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
evaluator. If upon resignation of the Evaluator no successor has accepted
appointment within thirty 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. At the present time, pursuant to a contract with
the Evaluator, Muller Data Corporation, a non-affiliated firm regularly engaged
in the business of evaluating, quoting or appraising comparable securities,
provides portfolio evaluations of the Municipal Bonds in the Trust which are
then reviewed by the Evaluator. In the event the Sponsor is unable to obtain
current evaluations from Muller Data Corporation, it may make its own
evaluations or it may utilize the services of any other non-affiliated
evaluator or evaluators it deems appropriate.
AMENDMENT AND TERMINATION. The Trust Agreements may be amended by the
Trustee and the Sponsor without the consent of any of the Unitholders: (1) to
cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor
governmental agency; or (3) to make such provisions as shall not adversely
affect the interests of the Unitholders. The Trust Agreements may also be
amended in any respect by the Sponsor and the Trustee, or any of the provisions
thereof may be waived, with the consent of the holders of Units representing
66-2/3% of the Units then outstanding of such Series, provided that no such
amendment or waiver will reduce the interest of any Unitholder without the
consent of such Unitholder or reduce the percentage of Units required to
consent to any such amendment or waiver without consent of all Unitholders of
such Series. In no event shall the Trust Agreements be amended to increase the
number of Units of a Series issuable thereunder or to permit, except in
accordance with the provisions of the Trust Agreements, the acquisition of any
Municipal Bonds in addition to or in substitution for those in any Series of
the Trust. The Trustee shall promptly notify Unitholders of the substance of
any such amendment.
The Trust Agreement provide that each Series of the Trust shall terminate
upon the maturity, redemption or other disposition, of the last of the
Municipal Bonds held in such Series. If the value of a Series of the Trust
shall be less than the applicable minimum value stated under "Essential
Information" in Part Two the Trustee may, in its discretion, and shall, when so
directed by the Sponsor, terminate such Series of the Trust. A Series of the
Trust may be terminated at any time by the holders of Units representing
66-2/3% of the Units of such Series then outstanding. In the event of
termination of a Series, written notice thereof will be sent by the Trustee to
all Unitholders of such Series. Within a reasonable period after termination,
the Trustee will sell any Municipal Bonds remaining in that Series of the Trust
and, after paying all expenses and charges incurred by the Series, will
distribute to Unitholders of such Series (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Interest and Principal Accounts of such Series.
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<PAGE> 28
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from the responsibilities under the
Trust Agreements, but will be under no liability to the Unitholders for taking
any action or refraining from any action in good faith pursuant to the Trust
Agreements or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct. The Sponsor shall not be liable
or responsible in any way for depreciation or loss incurred by reason of the
sale of any Municipal Bonds.
The Trustee: The Trust Agreements provide that the Trustee shall be under
no liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Municipal Bonds,
or certificates except by reason of its own gross negligence, bad faith or
willful misconduct, nor shall the Trustee be liable or responsible in any way
for depreciation or loss incurred by reason of the sale by the Trustee of any
Municipal Bonds. In the event that the Sponsor shall fail to act, the Trustee
may act and shall not be liable for any such action taken in good faith. The
Trustee shall not be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Municipal Bonds or upon the interest
thereon. In addition, the Trust Agreements contain other customary provisions
limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. The Trust Agreements provide that the determinations made by the
Evaluator 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 or Unitholders for errors in judgment, but shall be
liable only for its gross negligence, lack of faith or willful misconduct.
EXPENSES OF THE TRUST
The Sponsor will charge each Series a surveillance fee for services
performed for such Series in an amount not to exceed that amount set forth in
"Essential Information" in Part Two but in no event will such compensation,
when combined with all compensation received from other unit investment trusts
for which the Sponsor both acts as sponsor and provides portfolio surveillance,
exceed the aggregate cost to the Sponsor for providing such services. Such fee
shall be based on the total number of Units of each series outstanding as the
January Record Date for any annual period. The Sponsor and other Underwriters
paid all the expenses of creating and establishing the Trust, including the
cost of the initial preparation, printing and execution of the Prospectus,
Trust Agreements and the certificates, legal and accounting expenses,
advertising and selling expenses, payment of closing fees, expenses of the
Trustee, initial evaluation fees and other out-of-pocket expenses.
The Trustee receives for its services a fee calculated on the basis of the
annual rate set forth under "Essential Information" in Part Two based on the
largest aggregate principal amount of Municipal Bonds in such Series of the
Trust at any time during the monthly, quarterly or semi-annual period, as
appropriate. The Trustee also receives indirect benefits to the extent that it
holds funds on deposit in the various non-interest bearing accounts created
pursuant to the Agreement; however, the Trustee is also authorized by the
Agreement to make from time to time certain non-interest bearing advances to
the Series of the Trust. See "Unitholders-Distributions to Unitholders."
For evaluation of Municipal Bonds in a Series of the Trust, the Evaluator
receives a fee, calculated on an annual rate as set forth under "Essential
Information" in Part Two, based upon the largest aggregate principal amount of
Municipal Bonds in such Series of the Trust at any time during such monthly
period.
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The Trustee's and Evaluator's fees are payable monthly on or before each
Distribution Date by deductions from the Interest Account of such Series to the
extent funds are available and then from the Principal Account of such Series.
Both fees may be increased without approval of Unitholders by amounts not
exceeding a proportionate increase in the Consumer Price Index entitled "All
Services Less Rent of Shelter", published by the United States Department of
Labor, or any equivalent index substituted therefor.
The following additional charges are or may be incurred by a Series of the
Trust: (a) fees for the Trustee's extraordinary services; (b) expenses of the
Trustee (including legal and auditing expenses, but not including any fees and
expenses charged by any agent for custody and safeguarding of Municipal Bonds)
and of bond counsel, if any; (c) various governmental charges; (d) expenses and
costs of any action taken by the Trustee to protect the Trust or any series
thereof, or the rights and interests of the Unitholders; (e) indemnification of
the Trustee for any loss, liability or expense incurred by it in the
administration of the Trust or any Series without gross negligence, bad faith
or willful misconduct on its part; (f) indemnification of the Sponsor for any
loss, liability or expense incurred in acting as Depositor of a Series of the
Trust without gross negligence, bad faith or willful misconduct; and (g)
expenditures incurred in contacting Unitholders upon termination of a Series of
the Trust. The fees and expenses set forth herein are payable out of the
appropriate Series of the Trust and, when owed to the Trustee, are secured by a
lien on the assets of such Series.
Fees and expenses of a Series of the Trust shall be deducted from the
Interest Account of such Series, or, to the extent funds are not available in
such Account, from the Principal Interest Account of such Series. The Trustee
may withdraw from the Principal Account of a Series or the Interest Account of
a Series such amounts, if any, as it deems necessary to establish a reserve for
any taxes or other governmental charges or other extraordinary expenses payable
out of the Trust. Amounts so withdrawn shall be credited to a separate account
maintained for such Series of the Trust known as the Reserve Account and shall
not be considered a part of such Series of the Trust when determining the value
of the Units until such time as the Trustee shall return all or any part of
such amounts to the appropriate account.
THE SPONSOR
The Sponsor, Kemper Unit Investment Trusts, with an office at 77 W. Wacker
Drive, 29th Floor, Chicago, Illinois 60601, (800) 621-5024, is a service of
Kemper Securities, Inc., which is a wholly-owned subsidiary of Kemper Financial
Companies, Inc. which, in turn, is a wholly-owned subsidiary of Kemper
Corporation. The Sponsor acts as underwriter of a number of other Kemper unit
investment trusts and will act as underwriter of any other unit investment
trust products developed by the Sponsor in the future. As of January 31, 1994,
the total stockholder's equity of Kemper Securities, Inc., was approximately
$261,673,436 (unaudited).
If at any time the Sponsor shall fail to perform any of its duties under
the Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or its affairs are taken over by public authorities, then
the Trustee may (a) appoint a successor sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding such reasonable amounts as
may be prescribed by the Securities and Exchange Commission, or (b) terminate
the Agreement and liquidate the Trust or any Series as provided therein or (c)
continue to act as Trustee without terminating the Agreement.
-29-
<PAGE> 30
The foregoing financial information with regard to the Sponsor relates to
the Sponsor only and not to any Series of this Trust. Such information is
included in this Prospectus only for the purpose of informing investors as to
the financial responsibility of the Sponsor and its ability to carry out its
contractual obligations with respect to the Series of the Trust. More
comprehensive financial information can be obtained upon request from the
Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
Federal tax law were originally passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the schedule of investments,
appearing in Part Two of this Prospectus and Registration Statement, with
information pertaining to the specific Series of the Trust to which such
statements relate, have been audited by Ernst & Young, independent auditors, as
set forth in their report appearing in Part Two and is included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
DESCRIPTION OF SECURITIES RATINGS*4
STANDARD & POOR'S CORPORATION. A brief description of the applicable
Standard & Poor's Corporation rating 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 and
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;
- -----------------
*As published by the rating companies.
-30-
<PAGE> 31
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 arrangement, 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 "A" 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 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 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 own judgment with respect to such likelihood and
risk.
MOODY'S INVESTORS SERVICE, INC. - A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follow:
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 fluctuations 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.
-31-
<PAGE> 32
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.
A1 - Bonds which are rated A1 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 offering in the market place.
Baa - Bonds which are rated Baa are considered as lower medium grade
obligations, 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 move in parallel with Aaa,
Aa and A obligations during periods of economic normalcy, except in instances
of oversupply.
Conditional Ratings: Bonds rated "Con (-)" are ones for which the security
depends upon the completion of some act or the fulfillment of some condition.
These are bonds secured by (a) earnings of projects under construction. (b)
earnings of project 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.
Note: Moody's applies numerical modifiers, 1, 2, and 3 in each generic
rating classification from Aa through B in certain areas of its bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issuer ranks in the lower end of its generic
rating category.
-32-
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Part Two
Dated January 27, 1995
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
NOTE: Part Two of this Prospectus May Not Be Distributed unless Accompanied by
Part One.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Essential Information
As of December 14, 1994
Sponsor: Kemper Financial Services, Inc.
Evaluator: Kemper Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
<TABLE>
<CAPTION>
General Information
<S> <C>
Principal Amount of Municipal Bonds $2,100,000
Number of Units 11,321
Fractional Undivided Interest in the Trust per Unit 1/11,321
Principal Amount of Municipal Bonds per Unit $185.50
Public Offering Price:
Aggregate Bid Price of Municipal Bonds in the Portfolio $2,419,129
Aggregate Bid Price of Municipal Bonds per Unit $213.69
Cash per Unit (1) $-
Sales Charge 4.712% (4.5% of Public Offering Price) $10.07
Public Offering Price per Unit (exclusive of accrued
interest) (2) $223.76
Redemption Price per Unit (exclusive of accrued interest) $213.69
Excess of Public Offering Price per Unit Over Redemption
Price per Unit $10.07
Minimum Value of the Trust under which Trust Agreement
may be terminated $2,400,000
</TABLE>
Date of Trust December 1, 1982
Mandatory Termination Date December 31, 2032
Annual Evaluation Fee: $.35 per $1,000 principal amount of Municipal Bonds.
Evaluations for purpose of sale, purchase or redemption of Units are made as
of the close of business of the Sponsor next following receipt of an order for
a sale or purchase of Units or receipt by Investors Fiduciary Trust Company of
Units tendered for redemption.
[FN]
1. This amount, if any, represents principal cash or overdraft which is an
asset or liability of the Trust and is included in the Public Offering Price.
2. Units are offered at the Public Offering Price plus accrued interest to
the date of settlement (five business days after purchase). On December 14,
1994, there was added to the Public Offering Price of $223.76, accrued
interest to the settlement date of December 21, 1994 of $4.26, $7.33 and
$11.94 for a total price of $228.02, $231.09 and $235.70 for the monthly,
quarterly and semiannual distribution options, respectively.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Essential Information (continued)
As of December 14, 1994
Sponsor: Kemper Financial Services, Inc.
Evaluator: Kemper Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
<TABLE>
<CAPTION>
Special Information Based on Various Distribution Options
Monthly Quarterly Semiannual
<S> <C> <C> <C>
-------- -------- --------
Calculation of Estimated Net Annual
Interest Income per Unit (3):
Estimated Annual Interest Income $18.8897 $18.8897 $18.8897
Less: Estimated Annual Expense .7546 .6140 .5680
-------- -------- --------
Estimated Net Annual Interest Income $18.1351 $18.2757 $18.3217
======== ======== ========
Calculation of Interest Distribution
per Unit:
Estimated Net Annual Interest Income $18.1351 $18.2757 $18.3217
Divided by 12, 4 and 2, respectively $1.5113 $4.5689 $9.1609
Estimated Daily Rate of Net Interest
Accrual per Unit $.0504 $.0508 $.0509
Estimated Current Return Based on Public
Offering Price (3) 8.10% 8.17% 8.19%
Estimated Long-Term Return (3) 7.31% 7.37% 7.39%
</TABLE>
Trustee's Annual Fees and Expenses (including Evaluator's Fee): $.7546,
$.6140 and $.5680 ($.5043, $.4138 and $.3922 of which represent expenses) per
Unit under the monthly, quarterly and semiannual distribution options,
respectively.
Record and Computation Dates: First day of the month, as follows: monthly -
each month; quarterly - January, April, July and October; semiannual - January
and July.
Distribution Dates: Fifteenth day of the month, as follows: monthly - each
month; quarterly - January, April, July and October; semiannual - January and
July.
[FN]
3. The Estimated Long-Term Return and Estimated Current Return will vary.
For detailed explanation, see Part One of this prospectus.
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Tax-Exempt Income Trust
Series 48
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Kemper Tax-Exempt Income Trust
Series 48 as of September 30, 1994, and the related statements of operations
and changes in net assets for each of the three years in the period then
ended. These financial statements are the responsibility of the Trust's
sponsor. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned as of September 30,
1994, by correspondence with the custodial bank. An audit also includes
assessing the accounting principles used and significant estimates made by the
sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kemper Tax-Exempt Income
Trust Series 48 at September 30, 1994, and the results of its operations and
the changes in its net assets for each of the three years in the period then
ended in conformity with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
January 13, 1995
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Statement of Assets and Liabilities
September 30, 1994
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Municipal Bonds, at value (cost $2,001,333) (Note 1) $2,474,621
Accrued interest 98,448
----------
2,573,069
Liabilities and net assets
Cash overdraft 29,579
Accrued liabilities 3,579
----------
33,158
Net assets, applicable to 11,321 Units outstanding
(Note 5):
Cost of Trust assets, exclusive of interest
(Note 1) $2,001,333
Unrealized appreciation (Note 2) 473,288
Distributable funds 65,290
---------- ----------
Net assets $2,539,911
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Statement of Operations
<TABLE>
<CAPTION>
Year ended September 30
1994 1993 1992
<S> <C> <C> <C>
--------- --------- ---------
Investment income - interest $258,077 $291,933 $923,897
Expenses:
Trustee's fees and related expenses 7,732 8,519 14,995
Evaluator's fees 897 1,092 3,052
--------- --------- ---------
Total expenses 8,629 9,611 18,047
--------- --------- ---------
Net investment income 249,448 282,322 905,850
Realized and unrealized gain (loss)
on investments:
Realized gain 33,300 100,675 102,653
Unrealized depreciation during
the year (270,080) (112,157) (408,231)
--------- --------- ---------
Net loss on investments (236,780) (11,482) (305,578)
--------- --------- ---------
Net increase in net assets resulting
from operations $12,668 $270,840 $600,272
========= ========= =========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended September 30
1994 1993 1992
<S> <C> <C> <C>
---------- ----------- -----------
Operations:
Net investment income $249,448 $282,322 $905,850
Realized gain on investments 33,300 100,675 102,653
Unrealized depreciation on investments
during the year (270,080) (112,157) (408,231)
---------- ----------- -----------
Net increase in net assets resulting
from operations 12,668 270,840 600,272
Distributions to Unitholders:
Net investment income (270,046) (439,343) (953,544)
Principal from investment transactions (566,050) (5,343,059) (1,371,879)
---------- ----------- -----------
Total decrease in net assets (823,428) (5,511,562) (1,725,151)
Net assets:
At the beginning of the year 3,363,339 8,874,901 10,600,052
---------- ----------- -----------
At the end of the year (including
distributable funds applicable to
Trust Units of $65,290, $85,839 and
$1,911,518 at September 30, 1994,
1993 and 1992, respectively) $2,539,911 $3,363,339 $8,874,901
========== =========== ===========
Trust Units outstanding at the end
of the year 11,321 11,321 11,321
========== =========== ===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Kemper Tax-Exempt Income Trust
Series 48
Schedule of Investments
September 30, 1994
<CAPTION>
Coupon Maturity Redemption Principal
Name of Issuer and Title of Bond(5) Rate Date Provisions(2) Rating(1) Amount(4) Value(3)
<S> <C> <C> <C> <C> <C> <C>
------- ---------- -------------- -------- ---------- ----------
Illinois Housing Development Authority, Multifamily 10.625% 7/01/2014 2004 @ 100 S.F. A+ $245,000 $239,933
Housing Bonds, 1982 Series C. 1995 @ 102
+Ohio Building Authority, State Facilities Bonds, 10.125 10/01/2006 2003 @ 100 AAA 250,000 302,998
Frank J. Lausche State Office Building, 1982
Series A.
+Ohio Building Authority, State Facilities Bonds, 10.125 10/01/2006 2003 @ 100 AAA 355,000 421,392
Toledo Government Office Building, 1982 Series A.
+Provo, Utah, Electric Revenue Bonds, Series 1980 A. 10.125 4/01/2015 2000 @ 100 S.F. AAA 750,000 979,763
+Uintah County, Utah, Pollution Control Revenue 10.125 10/15/2012 1996 @ 100 Aaa* 500,000 530,535
Bonds, Deseret Generation & Transmission
Co-operative Project, Series 1982 T. ---------- ----------
$2,100,000 $2,474,621
========== ==========
</TABLE>
[FN]
See accompanying notes to Schedule of Investments.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Notes to Schedule of Investments
1. All ratings are by Standard & Poor's Corporation, unless marked with the
symbol "*", in which case the rating is by Moody's Investors Service, Inc.
The symbol "NR" indicates Bonds for which no rating is available.
2. There is shown under this heading the year in which each issue of Bonds is
initially redeemable and the redemption price for that year or, if currently
redeemable, the redemption price currently in effect; unless otherwise
indicated, each issue continues to be redeemable at declining prices
thereafter, but not below par value. In addition, certain Bonds in the
Portfolio may be redeemed in whole or in part other than by operation of the
stated redemption or sinking fund provisions under certain unusual or
extraordinary circumstances specified in the instruments setting forth the
terms and provisions of such Bonds. "S.F." indicates a sinking fund is
established with respect to an issue of Bonds. Redemption pursuant to call
provisions generally will, and redemption pursuant to sinking fund provisions
may, occur at times when the redeemed Bonds have a valuation which represents
a premium over the call price or par.
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.
To the extent that the Bonds were acquired at a price lower than the
redemption price, this may represent an increase in capital when compared with
the original Public Offering Price of the Units. Distributions of net income
will generally be reduced by the amount of the income which would otherwise
have been paid with respect to redeemed Bonds and, unless utilized to pay for
Units tendered for redemption, there will be distributed to Unitholders the
principal amount and any premium received on such redemption. In this event
the estimated current return and estimated long-term return may be affected by
such redemptions.
3. See Note 1 to the accompanying financial statements for a description of
the method of determining cost and value.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Notes to Schedule of Investments (continued)
4. At September 30, 1994, the Portfolio of the Trust consists of 5
obligations issued by entities located in 3 states. All of the issues are
payable from the income of a specific project or authority and are not
supported by an issuer's power to levy taxes. The sources of payment for the
revenue bonds are divided as follows: Electric Systems, 2; Housing, 1;
Miscellaneous, 2. Approximately 60% of the aggregate principal amount of
Bonds in the Trust are electrical systems bonds. Approximately 29% and 60% of
the aggregate principal amount of the Bonds in the Trust are from entities
located in the states of Ohio and Utah, respectively. Approximately 35% of
the aggregate principal amount of Bonds in the Trust are subject to call by
the issuers within five years after September 30, 1994.
5. Those securities preceded by (+) are secured by, and payable from,
escrowed U.S. Government securities.
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Notes to Financial Statements
1. Significant Accounting Policies
Valuation of Municipal Bonds
Municipal Bonds (Bonds) are stated at bid prices as determined by Kemper Unit
Investment Trusts (A Service of Kemper Securities, Inc.), the "Evaluator" of
the Trust. The aggregate bid prices of the Bonds are determined by the
Evaluator based on (a) current bid prices of the Bonds, (b) current bid prices
for comparable bonds, (c) appraisal, or (d) any combination of the above.
Cost of Municipal Bonds
Cost of the Trust's Bonds was based on the offering prices of the Bonds on
December 1, 1982 (Date of Deposit). The premium or discount (including any
original issue discount) existing at December 1, 1982, is not being amortized.
Realized gain (loss) from Bond transactions is reported on an identified cost
basis.
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized appreciation at September 30, 1994:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized depreciation $-
Gross unrealized appreciation 473,288
--------
Net unrealized appreciation $473,288
========
</TABLE>
3. Transactions with Affiliates
The Trustee, Investors Fiduciary Trust Company, is 50% owned by Kemper
Financial Services, Inc., the Trust's sponsor and an affiliate of Kemper Unit
Investment Trusts. On September 27, 1994, State Street Boston Corporation
entered into an agreement to acquire Investors Fiduciary Trust Company. The
acquisition is not expected to have an effect on the operation of the Trust.
The Trustee's fee (not including the reimbursement of out-of-pocket expenses),
calculated monthly, is at the annual rate of $1.35, $1.08 and $.75 under the
monthly, quarterly and semiannual distribution options, respectively, per
$1,000 principal amount of Bonds in the Trust, based on the largest aggregate
principal amount of Bonds in the Trust at any time during such monthly,
quarterly or semiannual periods. The Evaluator received a fee, payable
monthly, at an annual rate of $.35 per $1,000 principal amount of Bonds, based
on the largest aggregate principal amount of Bonds in the Trust at any time
during such monthly period.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 48
Notes to Financial Statements (continued)
4. Federal Income Taxes
The Trust is not an association taxable as a corporation for federal income
tax purposes. Each Unitholder is considered to be the owner of a pro rata
portion of the Trust under Subpart E, Subchapter J of Chapter 1 of the
Internal Revenue Code of 1986, as amended. Accordingly, no provision has been
made for federal income taxes.
5. Other Information
Cost to Investors
The cost to initial investors of Units of the Trust was based on the aggregate
offering price of the Bonds on the date of an investor's purchase, plus a
sales charge of 4.5% of the Public Offering Price (equivalent to 4.712% of the
net amount invested). The Public Offering Price for secondary market
transactions is based on the aggregate bid price of the Bonds plus or minus a
pro rata share of cash or overdraft in the Principal Account, if any, on the
date of an investor's purchase, plus a sales charge of 4.5% of the Public
Offering Price (equivalent to 4.712% of the net amount invested).
Distributions
Distributions of net investment income to Unitholders are declared and paid in
accordance with the option (monthly, quarterly or semiannual) selected by the
investor. Such income distributions, on a record date basis, are as follows:
<TABLE>
<CAPTION>
Year ended Year ended Year ended
Distribution September 30, 1994 September 30, 1993 September 30, 1992
Plan Per Unit Total Per Unit Total Per Unit Total
<S> <C> <C> <C> <C> <C> <C>
-------- -------- -------- -------- -------- --------
Monthly $23.42 $177,766 $35.60 $259,878 $83.27 $603,545
Quarterly 24.44 46,172 44.28 89,230 85.76 173,830
Semiannual 24.54 46,108 44.45 90,235 86.05 176,169
-------- -------- --------
$270,046 $439,343 $953,544
======== ======== ========
</TABLE>
<PAGE>
<TABLE>
Kemper Tax-Exempt Income Trust
Series 48
Notes to Financial Statements (continued)
5. Other Information (continued)
Selected data for a Unit of the Trust outstanding throughout each year -
<CAPTION>
Monthly Quarterly Semiannual
Year ended September 30 Year ended September 30 Year ended September 30
1994 1993 1992 1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------- -------- -------- ------- -------- -------- ------- -------- --------
Investment income - interest $22.80 $25.79 $81.61 $22.80 $25.79 $81.61 $22.80 $25.79 $81.61
Expenses .83 .91 1.74 .68 .75 1.44 .59 .63 1.16
------- -------- -------- ------- -------- -------- ------- -------- --------
Net investment income 21.97 24.88 79.87 22.12 25.04 80.17 22.21 25.16 80.45
Distributions to Unitholders:
Net investment income (23.42) (35.60) (83.27) (24.44) (44.28) (85.76) (24.54) (44.45) (86.05)
Principal from investment
transactions (50.00) (471.96) (121.18) (50.00) (471.96) (121.18) (50.00) (471.96) (121.18)
Net loss on investments (20.87) (1.03) (27.00) (20.87) (1.03) (27.00) (20.87) (1.03) (27.00)
------- -------- -------- ------- -------- -------- ------- -------- --------
Change in net asset value (72.32) (483.71) (151.58) (73.19) (492.23) (153.77) (73.20) (492.28) (153.78)
Net asset value:
Beginning of the year 295.41 779.12 930.70 299.65 791.88 945.65 300.87 793.15 946.93
------- -------- -------- ------- -------- -------- ------- -------- --------
End of the year, including
distributable funds $223.09 $295.41 $779.12 $226.46 $299.65 $791.88 $227.67 $300.87 $793.15
======= ======== ======== ======= ======== ======== ======= ======== ========
</TABLE>
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated January 13, 1995, in this Post-
Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Tax-Exempt Income Trust Series 48 dated January 27, 1995.
Ernst & Young LLP
Kansas City, Missouri
January 27, 1995
<PAGE>
Contents of Post-Effective AmendmentTo Registration Statement
This Post-Effective amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933,
The Registrant, Kemper Tax-Exempt Income Trust, Series 48,
certifies that it meets all of the requirements for effectiveness
of this registration statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago,
and State of Illinois, on the 26th day of January, 1995.
Kemper Tax-Exempt Income Trust,
Series 48
Registrant
By: Kemper Unit Investment Trusts
(a service of Kemper
Securities, Inc.)
Depositor
By: Michael J. Thoms
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below on January 26, 1995 by the following persons, who
constitute a majority of the Board of Directors of Kemper
Securities, Inc.
Signature Title
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Stephen G. McConahey President and Chief Operating Officer
Stephen G. McConahey
Frank V. Geremia Senior Executive Vice President
Frank V. Geremia
David M. Greene Senior Executive Vice President
David M. Greene
Arthur J. McGivern Senior Executive Vice President and Director
Arthur J. McGivern
Ramon Pecuch Senior Executive Vice President and Director
Ramon Pecuch
Thomas R. Reedy Senior Executive Vice President and Director
Thomas R. Reedy
Janet L. Reali Executive Vice President and Director
Janet L. Reali
Daniel D. Williams Executive Vice President and Treasurer
Daniel D. Williams
David B. Mathis Director
David B. Mathis
Stephen B. Timbers Director
Stephen B. Timbers
Donald F. Eller Director
Donald F. Eller
Charles M. Kierscht Director
Charles M. Kierscht
Michael J. Thoms
Michael J. Thoms signs this document pursuant to a Power of
Attorney filed with the Securities and Exchange Commission with
Amendment No. 1 to the Registration Statement on Form S-6 for
Kemper Defined Funds Series 28 (Registration No. 33-56779).
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post-effective Amendment Number 12 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 48
<NAME> KEMPER TAX EXEMPT INCOME TRUST SERIES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 2,001,333
<INVESTMENTS-AT-VALUE> 2,474,621
<RECEIVABLES> 98,448
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,573,069
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 33,158
<TOTAL-LIABILITIES> 33,158
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,001,333
<SHARES-COMMON-STOCK> 11,321
<SHARES-COMMON-PRIOR> 11,321
<ACCUMULATED-NII-CURRENT> 65,290
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 473,288
<NET-ASSETS> 2,539,911
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 258,077
<OTHER-INCOME> 0
<EXPENSES-NET> 8,629
<NET-INVESTMENT-INCOME> 249,448
<REALIZED-GAINS-CURRENT> 33,300
<APPREC-INCREASE-CURRENT> (270,080)
<NET-CHANGE-FROM-OPS> 12,668
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (270,046)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (566,050)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (823,428)
<ACCUMULATED-NII-PRIOR> 85,839
<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>
