File No. 2-80827 CIK #711007
Securities and Exchange CommissionWashington, D. C. 20549
Post-Effective
Amendment No. 13
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 54
Name and executive office address of Depositor:
EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
77 West Wacker - 29th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
Robert K. Burke
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 April 29, 1996 pursuant to
paragraph (b) of Rule 485.
KEMPER TAX-EXEMPT INCOME TRUST
NATIONAL SERIES
INTERMEDIATE TERM SERIES
SHORT-INTERMEDIATE TERM SERIES
PART ONE
The date of this Part One is that datewhich is set forth in Part
Twoof the Prospectus
Each Series of Kemper Tax-Exempt Income Trust (the "Trust" or 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 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 involve investment risk including loss of principal.
This Prospectus is in two parts. Read and retain both parts for
future reference.
SPONSOR: EVEREN UNIT INVESTMENT TRUSTS,a service of EVEREN
Securities, Inc.
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.
TABLE OF CONTENTS
PAGE
SUMMARY 2
The Trust 2
Public Offering Price 2
Interest and Principal Distributions 2
Reinvestment 3
Estimated Current Return and Estimated Long-Term Return 3
Market for Units 3
Risk Factors 3
THE TRUST 4
PORTFOLIO 5
Risk Factors 6
DISTRIBUTION REINVESTMENT 12
INTEREST AND ESTIMATED LONG-TERM AND CURRENT RETURNS 12
TAX STATUS OF THE TRUST 13
TAX REPORTING AND REALLOCATION 17
PUBLIC OFFERING OF UNITS 18
Public Offering Price 18
Accrued Interest 20
Public Distribution of Units 21
Profits of Sponsor 22
MARKET FOR UNITS 22
REDEMPTION 23
Computation of Redemption Price 24
UNITHOLDERS 25
Ownership of Units 25
Distributions to Unitholders 25
Statements to Unitholders 26
Rights of Unitholders 28
INVESTMENT SUPERVISION 28
ADMINISTRATION OF THE TRUST 29
The Trustee 29
The Evaluator 30
Amendment and Termination 30
Limitations on Liability 31
EXPENSES OF THE TRUST 32
THE SPONSOR 33
LEGAL OPINIONS 33
INDEPENDENT AUDITORS 34
DESCRIPTION OF SECURITIES RATINGS 34
Essential Information*
Report of Independent Auditors*
Statement of Net Assets and Liabilities*
Statement of Operations*
Statement of Changes in Net Assets*
Schedule of Investments*
Notes to Schedule Investments*
Notes to Financial Statements*
*Information on these items appears in Part Two
KEMPER TAX-EXEMPT INCOME TRUSTNATIONAL SERIESINTERMEDIATE TERM
SERIESSHORT-INTERMEDIATE TERM SERIES
SUMMARY
The Trust. Each Series of the Kemper Tax-Exempt Income Trust
(the "Trust" or the "National 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, a Division of the McGraw-Hill
Companies, Inc. ("Standard & Poor's") 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-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."
Risk Factors. An investment in the Trusts should be made with an
understanding of the risks associated therewith, including, among
other factors, the inability of the issuer to pay the principal
of or interest on a bond when due, volatile interest rates, early call
provisions, and changes to the tax status of the Municipal
Bonds. See "Portfolio_Risk Factors."
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"). EVEREN Unit Investment
Trusts, a service of EVEREN Securities, Inc. acts as Sponsor and
Evaluator and The Bank of New York acts as Trustee.
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.
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 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 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.
Risk Factors. 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 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
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 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 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 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 registered in such Unitholder's state of residence which is
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 the Trustee. All inquiries concerning
participation in distribution reinvestment should be directed to
the Trustee at its unit investment trust office.
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 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 Trust 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 (subject to
various non-recognition provisions of the Internal Revenue Code
of 1986, as amended (the "Code")). Such gain does not include
any amounts received in respect of accrued interest or earned
original issue discount, if any. It should be noted that, as
further described below, accretion of market discount on
tax-exempt bonds to taxation as ordinary income. 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.
In the opinion of Chapman and Cutler, counsel for the Sponsor:
Each series of the Trust is not an association taxable as a
corporation for federal income tax purposes and interest and
accrued original issue discount on Bonds which is excludable from
gross income under the Code will retain its status when
distributed to Unitholders; however, such interest may be taken
into account in computing the alternative minimum tax, an
additional tax on branches of foreign corporations and the
environmental tax (the "Superfund Tax"), as noted below.
Exemption of interest and accrued original issue discount on any
Municipal Bonds for Federal income tax purposes does not
necessarily result in tax-exemption under the laws of the several
states as such laws vary with respect to the taxation of such
securities and in many states all or part of such interest and
accrued original issue discount may be subject to tax.
Each Unitholder is considered to be the owner of a pro rata
portion of each asset of the respective Series of the Trust in
the proportion that the number of Units of such Trust held by him
bears to the total number of Units outstanding of such Trust
under subpart E, subchapter J of chapter 1 of the Code and will
have a taxable event when such Trust disposes of a 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, if any, on Bonds delivered after
the Unitholders pay for their Units to the extent that such
interest accrued on such Bonds during the period from the
Unitholder's settlement date to the date such Bonds are delivered
to a Trust and, consequently, such Unitholders may have an
increase in taxable gain or reduction in capital loss upon the
disposition of such Units. Gain or loss upon the sale or
redemption of Units is measured by comparing the proceeds of such
sale or redemption with the adjusted basis of the Units. If the
Trustee disposes of Bonds (whether by sale, payment on maturity,
redemption or otherwise), gain or loss is recognized to the
Unitholder (subject to various non-recognition provisions of the
Code). The amount of any such gain or loss is measured by
comparing the Unitholder's pro rata share of the total proceeds
from such disposition with the Unitholder's basis for his or her
fractional interest in the asset disposed of. In the case of a
Unitholder who purchases Units, such basis (before adjustment for
earned original issue discount and amortized bond premium, if
any) is determined by apportioning the cost of the Units among
each of the Trust's assets ratably according to value as of the
date of acquisition of the Units. The basis of each Unit and of
each Municipal Bond which was issued with original issue discount
must be increased by the amount of the accrued original issue
discount (and market discount, if the Unitholder elects to
include market discount in income as it accrues) and the basis of
each Unit and of the Unitholder's interest in each Municipal Bond
which was acquired by such Unitholder at a premium must be
reduced by the annual amortization of Municipal Bond premium.
The tax basis reduction requirements of the Code relating to
amortization of bond premium may, under some circumstances,
result in the Unitholder realizing a taxable gain when his Units
are sold or redeemed for an amount equal to his original cost.
Any proceeds paid under individual insurance policies obtained by
issuers of Bonds or under any insurance policies obtained by the
Trust or the Sponsor 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; provided that, at the time
such policies are purchased, the amounts paid for such policies
are reasonable, customary and consistent with the reasonable
expectation that the issuer of the obligations, rather than the
insurer, will pay debt service on the obligations.
Sections 1288 and 1272 of the Code provide a complex set of rules
governing the accrual of original issue discount. These rules
provide that original issue discount accrues either on the basis
of a constant compound interest rate or ratably over the term of
the 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")
to prior owners. 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. Unitholders should consult with their tax
advisers regarding these rules and their application.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects
tax-exempt bonds to the market discount rules of the Code
effective for bonds purchased after April 30, 1993. In general,
market discount is the amount (if any) by which the stated
redemption price at maturity exceeds an investor's purchase price
(except to the extent that such difference, if any, is
attributable to original issue discount not yet accrued) subject
to a statutory "de minimis" rule. Market discount can arise
based on the price a Trust pays for Municipal Bonds or the price
a Unitholder pays for his or her Units. Under the Tax Act,
accretion of market discount is taxable as ordinary income; under
prior law the accretion had been treated as capital gain. Market
discount that accretes while a Trust 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.
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 Bonds in a Trust and tax-exempt
original issue discount. 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 profits tax imposed by Section 884
of the Code.
Counsel for the Sponsor has also advised that under Section 265
of the Code, interest on indebtedness incurred or continued to
purchase or carry Units of 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 or to
purchase goods or services for personal consumption). 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. On
December 7, 1995 the U.S. Treasury Department released proposed
legislation that, if adopted, would generally extend the
financial institution rules to all corporations, effective for
obligations acquired after the date of announcement. Investors
with questions regarding these issues should consult with their
tax advisers.
In the case of certain Municipal Bonds, certain Series of the
Trust, 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 the
Code and U.S. Treasury Regulations. Any person who believes that
he or she may be a "substantial user" or a "related person" as so
defined should contact his or her tax adviser.
In the case of corporations, the alternative tax rate applicable
to long-term capital gains is 35% effective for long-term capital
gains realized in taxable years beginning on or after January 1,
1993. For taxpayers other than corporations, net capital gains
are subject to a maximum marginal stated tax rate of 28%.
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.
All statements of law in the Prospectus concerning exclusion from
gross income for Federal, state or other tax purposes are the
opinions of counsel and are to be so construed.
At the respective times of issuance of the Bonds, opinions
relating to the validity thereof and to the exclusion of interest
thereon from Federal gross income are rendered by bond counsel to
the respective issuing 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.
Section 86 of the Code, in general, provides that fifty percent
of Social Security benefits are includible 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 times
during the taxable year and who file separate returns. Modified
adjusted gross income is adjusted gross income determined without
regard to certain otherwise allowable deductions and exclusions
from gross income and by including tax-exempt interest. To the
extent that Social Security benefits are includible in gross
income, they will be treated as any other item of gross income.
In addition, under the Tax Act, for taxable years beginning after
December 31, 1993, up to eighty-five percent of Social Security
benefits are includible 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, 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.
Ownership of the Units may result in collateral federal income
tax consequences to certain taxpayers, including, without
limitation, corporations subject to either the environmental tax
or the branch profits tax, financial institutions, certain
insurance companies, certain S corporations, individual
recipients of Social Security or Railroad Retirement benefits and
taxpayers who may be deemed to have incurred (or continued)
indebtedness to purchase or carry tax-exempt obligations.
Prospective investors should consult their tax advisors as to the
applicability of any collateral consequences. On December 7,
1995, the U.S. Treasury Department released proposed legislation
that, if adopted, could affect the United States federal income
taxation of non-United States Unitholders and the portion of the
Trusts' income allocable to non-United States Unitholders.
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.
TAX REPORTING AND REALLOCATION
Because the Trust receives interest and makes monthly
distributions based upon such Trust's expected total collections
of interest and any anticipated expenses, certain tax reporting
consequences may arise. The Trust is required to report
Unitholder information to the Internal Revenue Service ("IRS"),
based upon the actual collection of interest by such Trust on the
securities in such Trust, without regard to such Trust, without
regard to such Trust's expenses or to such Trust's payments to
Unitholders during the year. If distributions to Unitholders
exceed interest collected, the difference will be reported as a
return of principal which will reduce a Unitholder's cost basis
in its Units (and its pro rata interest in the securities in the
Trust). A Unitholder must include in taxable income the amount
of income reported by a Trust to the IRS regardless of the amount
distributed to such Unitholder. If a Unitholder's share of
taxable income exceeds income distributions made by a Trust to
such Unitholder, such excess is in all likelihood attributable to
the payment of miscellaneous expenses of such Trust which will
not be deductible by an individual Unitholder as an itemized deduction
except to the extent that the total amount of certain
itemized deductions, such as investments expenses (which would
include the Unitholder's share of Trust expenses), tax return
preparation fees and employee business expenses, exceeds 2% of
such Unitholder's adjusted gross income. Alternatively, in
certain cases, such excess may represent an increase in the
Unitholder's tax basis in the Units owned. Investors with
questions regarding these issues should consult with their tax
advisors.
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 Cantor Fitzgerald &
Co., 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. Investors who purchase Units through brokers or dealers
pursuant to a current management agreement which by contract or
operation of law does not allow such broker or dealer to earn an
additional commission (other than any fee or commission paid for
maintenance of such investor's account under the management
agreement) on such transactions may purchase such Units at the
current Public Offering Price net of the applicable broker or
dealer connection. See "Public Distribution of Units" 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:
PERCENT OF PERCENT
DOLLAR WEIGHTED PUBLIC OF NET
AVERAGE YEARS OFFERING AMOUNT
TO MATURITY PRICE INVESTED
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
The sales charge per Unit will be reduced as set forth below:
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
AMOUNT OF INVESTMENT SALES CHARGE (% OF PUBLIC OFFERING PRICE
$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
________________
* 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.
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
preceding 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 third 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.
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.
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
AMOUNT OF INVESTMENT DISCOUNT PER UNIT (% OF PUBLIC OFFERING
PRICE
$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
_______________
* 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.
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 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. The Sponsor may
suspend or discontinue purchases of Units of any Trust Fund if
the supply of Units exceeds demand, or for other business
reasons.
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, The Bank of New York, 101 Barclay
Street, New York, New York 10286 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 third business day
following the day on which a tender for redemption is received
(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.
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.
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.
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;
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.
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 is The Bank of New York, a trust
company organized under the laws of New York. The Bank of New
York has its officers at 101 Barclay Street, New York, New York
10286, telephone 1-800-701-8178. The Bank of New York is subject
to supervision and examination by the Superintendent of Banks of
the State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
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 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. EVEREN Unit Investment Trusts, a service of
EVEREN 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, Cantor Fitzgerald & Co., 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 Cantor Fitzgerald &
Co., 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.
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.
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, EVEREN Unit Investment Trusts, with an office at 77
W. Wacker Drive, 29th Floor, Chicago, Illinois 60601, (800)
621-5024, is a service of EVEREN Securities, Inc., which is a
wholly-owned subsidiary of EVEREN Capital Corporation. The
Sponsor acts as underwriter of a number of other EVEREN unit
investment trusts and will act as underwriter of any other unit
investment trust products developed by the Sponsor in the future.
As of December 31, 1995, the total stockholder's equity of
EVEREN Securities, Inc., was approximately $261,286,862.
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.
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 LLP, 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[2]
Standard & Poor's. A brief description of the applicable
Standard & Poor's 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;
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.
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.
[1] Reference is made to the Trust Agreement, and any
statements contained herein are qualified in their entirety by
the provisions of the Trust Agreement.
[2] As published by the rating companies.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Part Two
Dated April 29, 1996
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 54
Essential Information
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
<TABLE>
<CAPTION>
General Information
<S> <C>
Principal Amount of Municipal Bonds $2,610,000
Number of Units 13,137
Fractional Undivided Interest in the Trust per Unit 1/13,137
Principal Amount of Municipal Bonds per Unit $198.68
Public Offering Price:
Aggregate Bid Price of Municipal Bonds in the Portfolio $2,952,696
Aggregate Bid Price of Municipal Bonds per Unit $224.76
Cash per Unit (1) $-
Sales Charge 4.712% (4.5% of Public Offering Price) $10.59
Public Offering Price per Unit (exclusive of accrued
interest) (2) $235.35
Redemption Price per Unit (exclusive of accrued interest) $224.76
Excess of Public Offering Price per Unit Over Redemption
Price per Unit $10.59
Minimum Value of the Trust under which Trust Agreement
may be terminated $3,120,000
</TABLE>
Date of Trust March 9, 1983
Mandatory Termination Date December 31, 2033
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 (three business days after purchase). On December 31,
1995, there was added to the Public Offering Price of $235.35, accrued
interest to the settlement date of January 4, 1996 of $2.76, $2.77 and $2.78
for a total price of $238.11, $238.12 and $238.13 for the monthly, quarterly
and semiannual distribution options, respectively.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Essential Information (continued)
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts(4)
Trustee: Investors Fiduciary Trust Company(5)
<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 $17.9825 $17.9825 $17.9825
Less: Estimated Annual Expense .8121 .6109 .5410
-------- -------- --------
Estimated Net Annual Interest Income $17.1704 $17.3716 $17.4415
======== ======== ========
Calculation of Interest Distribution
per Unit:
Estimated Net Annual Interest Income $17.1704 $17.3716 $17.4415
Divided by 12, 4 and 2, respectively $1.4309 $4.3429 $8.7208
Estimated Daily Rate of Net Interest
Accrual per Unit $.0477 $.0483 $.0484
Estimated Current Return Based on Public
Offering Price (3) 7.30% 7.38% 7.41%
Estimated Long-Term Return (3) 4.46% 4.55% 4.58%
</TABLE>
Trustee's Annual Fees and Expenses (including Evaluator's Fee): $.8121,
$.6109 and $.5410 ($.4548, $.3166 and $.3308 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.
4. See Note 1 to the accompanying financial statements of the Trust regarding
a change in ownership of Kemper Unit Investment Trusts and Kemper Securities,
Inc.
5. See Note 6 to the accompanying financial statements of the Trust regarding
the change in Trustee.
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Tax-Exempt Income Trust
Series 54
We have audited the accompanying statement of assets and liabilities of Kemper
Tax-Exempt Income Trust Series 54, including the schedule of investments, as
of December 31, 1995, 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 December 31, 1995,
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 54 at December 31, 1995, and the results of its operations and
the changes in its net assets for the periods indicated above in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
April 15, 1996
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Municipal Bonds, at value (cost $2,467,994) $2,952,696
Interest receivable 88,011
Cash 71,630
----------
3,112,337
Liabilities and net assets
Accrued liabilities 1,625
Net assets, applicable to 13,137 Units outstanding:
Cost of Trust assets, exclusive of interest $2,467,994
Unrealized appreciation 484,702
Distributable funds 158,016
---------- ----------
Net assets $3,110,712
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Statements of Operations
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
<S> <C> <C> <C>
-------- --------- ---------
Investment income - interest $286,304 $319,028 $470,461
Expenses:
Trustee's fees and related expenses 9,404 8,463 11,054
Evaluator's fees 1,105 1,245 1,972
-------- --------- ---------
Total expenses 10,509 9,708 13,026
-------- --------- ---------
Net investment income 275,795 309,320 457,435
Realized and unrealized gain (loss)
on investments:
Realized gain 31,162 137,973 346,802
Unrealized appreciation
(depreciation) during the year 73,847 (380,867) (413,721)
-------- --------- ---------
Net gain (loss) on investments 105,009 (242,894) (66,919)
-------- --------- ---------
Net increase in net assets resulting
from operations $380,804 $66,426 $390,516
======== ========= =========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
<S> <C> <C> <C>
---------- ----------- -----------
Operations:
Net investment income $275,795 $309,320 $457,435
Realized gain on investments 31,162 137,973 346,802
Unrealized appreciation
(depreciation) on investments
during the year 73,847 (380,867) (413,721)
---------- ----------- -----------
Net increase in net assets resulting
from operations 380,804 66,426 390,516
Distributions to Unitholders:
Net investment income (296,546) (385,650) (592,796)
Principal from investment
transactions (668,271) (717,861) (5,429,746)
Capital transactions:
Redemption of Units (58,140) (21,377) -
---------- ----------- -----------
Total decrease in net assets (642,153) (1,058,462) (5,632,026)
Net assets:
At the beginning of the year 3,752,865 4,811,327 10,443,353
---------- ----------- -----------
At the end of the year (including
distributable funds applicable to
Trust Units of $158,016, $198,268
and $230,136 at December 31, 1995,
1994 and 1993, respectively) $3,110,712 $3,752,865 $4,811,327
========== =========== ===========
Trust Units outstanding at the end
of the year 13,137 13,352 13,428
========== =========== ===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Kemper Tax-Exempt Income Trust
Series 54
Schedule of Investments
December 31, 1995
<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>
------- ---------- -------------- -------- ---------- ----------
+County of Franklin, Ohio, Hospital Revenue 10.00% 12/01/2001 AAA $555,000 $571,489
Bonds, Series 1980 (Grant Hospital Project).
+Illinois Health Facilities Authority, Revenue 7.875 2/01/2004 1999 @ 100 S.F. NR 810,000 811,903
Bonds, Series 1976A (Columbus-Cuneo-Cabrini
Medical Center), Chicago, Illinois.
+City of Muscatine, Iowa, Electric Revenue 6.70 1/01/2013 2000 @ 100 S.F. AAA 215,000 231,220
Bonds, Series 1979.
+City of Muscatine, Iowa, Electric Revenue 9.70 1/01/2013 2005 @ 100 S.F. AAA 500,000 661,300
Bonds, Series 1980.
+The Hospitals Authority of Philadelphia 10.875 7/01/2008 1996 @ 100 Aaa* 405,000 519,259
(Pennsylvania) Hospital Revenue Bonds,
Series of 1980 (United Hospitals, Inc.).
+Sam Rayburn Municipal Power Agency (Texas) 8.00 9/01/2012 AAA 125,000 157,525
Power Supply System Revenue Bonds, Series ---------- ----------
1981. $2,610,000 $2,952,696
========== ==========
</TABLE>
[FN]
See accompanying notes to Schedule of Investments.
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
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 54
Notes to Schedule of Investments (continued)
4. At December 31, 1995, the Portfolio of the Trust consists of 6 obligations
issued by entities located in 5 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, 3; Hospitals and Health Care, 3.
Approximately 68% of the aggregate principal amount of Bonds in the Trust are
obligations of hospitals and health care issuers. Approximately 32% of the
aggregate principal amount of Bonds in the Trust are obligations of electrical
systems. Approximately 31% and 27% of the aggregate principal amount of Bonds
in the Trust are obligations of entities located in Illinois and Iowa,
respectively. Approximately 16% of the aggregate principal amount of Bonds in
the Trust are subject to call by the issuers within five years after
December 31, 1995.
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 54
Notes to Financial Statements
1. Significant Accounting Policies
Trust Sponsor and Evaluator
From the Trust's date of deposit through September 14, 1995, the Trust's
sponsor and evaluator was Kemper Unit Investment Trusts, a division of Kemper
Securities, Inc. At that date, the members of certain Kemper Corporation
operating units acquired ownership of certain Kemper units, which included
Kemper Securities, Inc. In connection with the acquisition, Kemper
Securities, Inc. changed its name to EVEREN Securities, Inc., and Kemper Unit
Investment Trusts became EVEREN Unit Investment Trusts, which now serves as
the "Evaluator" and sponsor of the Trust. Subsequent to the date of
acquisition, neither EVEREN Securities, Inc. nor EVEREN Unit Investment Trusts
is affiliated with Kemper Financial Services, Inc. or Kemper Corporation.
Valuation of Municipal Bonds
Municipal Bonds (Bonds) are stated at bid prices as determined by EVEREN Unit
Investment Trusts. 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
March 9, 1983 (Date of Deposit). The premium or discount (including any
original issue discount) existing at March 9, 1983, 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 December 31, 1995:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized depreciation $-
Gross unrealized appreciation 484,702
--------
Net unrealized appreciation $484,702
========
</TABLE>
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Notes to Financial Statements (continued)
3. Transactions with Affiliates
Investors Fiduciary Trust Company (IFTC), who served as Trustee through
February 29, 1996, was 50% owned by Kemper Financial Services, Inc., an
affiliate of Kemper Unit Investment Trusts until January 31, 1995, at which
time State Street Boston Corporation acquired IFTC. The Trustee's fee (not
including the reimbursement of out-of-pocket expenses) is calculated monthly
under the monthly, quarterly and semiannual distribution options, 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 annual Trustee's fee rate in effect at
the end of each of the last three periods is as follows:
<TABLE>
<CAPTION>
December 31
1995 1994 1993
<S> <C> <C> <C>
------- ----- -----
Monthly $1.7983 $1.35 $1.35
Quarterly 1.4810 1.08 1.08
Semiannual 1.0578 .75 .75
</TABLE>
The Evaluator received a fee, payable monthly, at an annual rate of $.30 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.
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).
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Notes to Financial Statements (continued)
5. Other Information (continued)
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 December 31, 1995 December 31, 1994 December 31, 1993
Plan Per Unit Total Per Unit Total Per Unit Total
<S> <C> <C> <C> <C> <C> <C>
-------- -------- -------- -------- -------- --------
Monthly $21.72 $178,666 $27.85 $202,451 $38.66 $275,689
Quarterly 22.18 47,180 28.74 81,065 44.90 129,439
Semiannual 22.54 69,388 30.40 102,170 54.26 187,668
-------- -------- --------
$295,234 $385,686 $592,796
======== ======== ========
</TABLE>
In addition, the Trust redeemed Units with proceeds from the sale of Bonds as
follows:
<TABLE>
<CAPTION>
Year ended December 31
1995 1994
<S> <C> <C>
------- -------
Principal portion $58,140 $21,377
Net interest accrued 1,312 870
------- -------
$59,452 $22,247
======= =======
Units 215 76
======= =======
</TABLE>
<PAGE>
<TABLE>
Kemper Tax-Exempt Income Trust
Series 54
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 December 31 Year ended December 31 Year ended December 31
1995 1994 1993 1995 1994 1993 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------- ------- -------- ------- ------- -------- ------- ------- --------
Investment income - interest $21.70 $23.83 $35.04 $21.70 $23.83 $35.04 $21.70 $23.83 $35.04
Expenses .90 .84 1.10 .68 .63 .85 .60 .55 .73
------- ------- -------- ------- ------- -------- ------- ------- --------
Net investment income 20.80 22.99 33.94 21.02 23.20 34.19 21.10 23.28 34.31
Distributions to Unitholders:
Net investment income (21.72) (27.85) (38.66) (22.18) (28.74) (44.90) (22.54) (30.40) (54.26)
Principal from investment
transactions (50.73) (53.46) (404.36) (50.73) (53.46) (404.36) (50.73) (53.46) (404.36)
Net gain (loss) on investments 7.91 (18.05) (5.07) 7.91 (18.05) (5.07) 7.91 (18.05) (5.07)
------- ------- -------- ------- ------- -------- ------- ------- --------
Change in net asset value (43.74) (76.37) (414.15) (43.98) (77.05) (420.14) (44.26) (78.63) (429.38)
Net asset value:
Beginning of the year 277.92 354.29 768.44 281.94 358.99 779.13 287.65 366.28 795.66
------- ------- -------- ------- ------- -------- ------- ------- --------
End of the year, including
distributable funds $234.18 $277.92 $354.29 $237.96 $281.94 $358.99 $243.39 $287.65 $366.28
======= ======= ======== ======= ======= ======== ======= ======= ========
</TABLE>
<PAGE>
Kemper Tax-Exempt Income Trust
Series 54
Notes to Financial Statements (continued)
6. Change of Trustee
On March 1, 1996, The Bank of New York assumed all trustee responsibilities
from IFTC.
<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 April 15, 1996, in this Post-
Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Tax-Exempt Income Trust Series 54 dated April 29, 1996.
Ernst & Young LLP
Kansas City, Missouri
April 29, 1996
<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 54, 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 28th day of April, 1996.
Kemper Tax-Exempt Income Trust, Series 54
Registrant
By: EVEREN Unit Investment Trusts
(a division of EVEREN 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
April 28, 1996 by the following persons, who constitute a
majority of the Board of Directors of EVEREN Securities, Inc.
Signature Title
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Daniel D. Williams Senior Executive Vice President, Chief
Daniel D. Williams Financial Officer and Treasurer
Frank V. Geremia Senior Executive Vice President
Frank V. Geremia
Stephen G. McConahey President and Chief Operating Officer
Stephen G. McConahey
Stanley R. Fallis Senior Executive Vice President and Chief
Stanley R. Fallis Administrative Officer
David M. Greene Senior Executive Vice President and
David M. Greene Director of Client Services
Thomas R. Reedy Senior Executive Vice President and
Thomas R. Reedy Director of Capital Markets
Janet L. Reali Executive Vice President, Corporate Counsel
Janet L. Reali and Corporate Secretary
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>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post-effective Amendment Number 13 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 54
<NAME> KEMPER TAX EXEMPT SERIES A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,467,994
<INVESTMENTS-AT-VALUE> 2,952,696
<RECEIVABLES> 88,011
<ASSETS-OTHER> 71,630
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,112,337
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,625
<TOTAL-LIABILITIES> 1,625
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,467,994
<SHARES-COMMON-STOCK> 13,137
<SHARES-COMMON-PRIOR> 13,352
<ACCUMULATED-NII-CURRENT> 158,016
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 484,702
<NET-ASSETS> 3,110,712
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 286,304
<OTHER-INCOME> 0
<EXPENSES-NET> 10,509
<NET-INVESTMENT-INCOME> 275,795
<REALIZED-GAINS-CURRENT> 31,162
<APPREC-INCREASE-CURRENT> 73,847
<NET-CHANGE-FROM-OPS> 380,804
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (296,546)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (668,271)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 215
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (642,153)
<ACCUMULATED-NII-PRIOR> 198,268
<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>
