INSURED MUNICIPALS INC TR & INV QUAL TAX EX TR MULTI SER 300, S-6/A, 1997-12-04

INSURED MUNICIPALS INC TR & INV QUAL TAX EX TR MULTI SER 300
S-6/A, 1997-12-04

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File No. 333-41441 CIK #896960
Securities And Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 1
to
Registration Statement on
Form S-6

For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.

A. Exact name of Trust: Insured Municipals Income Trust and Investors'
Quality Tax-Exempt Trust Multi-Series 300

B. Name of Depositor: Van Kampen American Capital Distributors, Inc.

C. Complete address of Depositor's principal executive offices:

One Parkview Plaza
Oakbrook Terrace, Illinois 60181

D Name and complete address of agents for service:

Van Kampen American Capital Distributors, Inc Chapman and Cutler
Attention: Don G. Powell, Chairman
Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603

E. Title of securities being registered: Units of fractional undivided
beneficial interest

F. Approximate date of proposed sale to the public:

as soon as practicable after the Effective Date
of the Registration Statement

The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust
Multi-Series 300

Cross Reference Sheet

Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933

(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)

Form N-8B-2 Form S-6
Item Number Heading in Prospectus

I. Organization and General Information

1. (a) Name of trust )
(b) Title of securities issued ) Prospectus Part I Front Cover Page

2. Name and address of Depositor )
Part II-Fund Administration - Sponsor

3. Name and address of Trustee ) Part II-Fund Administration-Trustee

4. Name and address of principal ) Part I-Underwriting
underwriter )

5. Organization of trust ) Part II-The Trusts - The Fund

6. Execution and termination of ) Part II-The Trusts - The Fund
Trust Indenture and Agreement ) Part II-Fund Administration-
) Termination of Trust Agreement

7. Changes of Name ) *

8. Fiscal year ) *

9. Material Litigation ) *

II. General Description of the Trust and Securities of the Trust

10. General information regarding ) Part II-Rights of Unitholders
trust's securities and rights ) Part II-The Trusts - The Fund
of security holders )

11. Type of securities comprising ) Part I-Front Cover
units ) Part I-Portfolio

12. Certain information regarding ) *
periodic payment certificates )

13. (a) Load, fees, charges and )
Part I-Summary of Essential Financial
expenses ) Information
) Part II-Public Offering
) Part II-Expenses

(b) Certain information regard- ) *
ing periodic payment plan )
certificates )

(d) Certain other fees, ) Part II-Expenses
expenses or charges )
payable by holders )

(e) Certain profits to be ) Part II-Public Offering
received by depositor, ) Part I-Underwriting
principal underwriter, ) Part I-Notes to Portfolio
trustee or affiliated )
persons )

(f) Ratio of annual charges ) *
to income )

14. Issuance of trust's securities ) Part II-The Trusts-The Fund

15. Receipt and handling of payments ) *
from purchasers )

16. Acquisition and disposition of ) Part II-The Trusts-The Fund
underlying securities ) Part II-Fund Administration

17. Withdrawal or redemption ) Part II-Public Offering-Market for
Units
) Part II-Rights of Unitholders-
) Redemption of Units

18. (a) Receipt and disposition ) Part II-Rights of Unitholders-
of income )
Distribution of Interest and Principal
(b) Reinvestment of distribu- ) Part II-Rights of Unitholders-
tions ) Reinvestment Option

(d) Schedule of distributions )
Part I-Summary of Essential Financial
) Information
) Part II-Rights of Unitholders-
)
Distribution of Interest and Principal
19. Records, accounts and reports ) Part II-Rights of Unitholders-
) Reports Provided
) Part II-Fund Administration-Trustee

20. Certain miscellaneous provisions ) Part II-Fund Administration
of Trust Agreement )

21. Loans to security holders ) *

22. Limitations on liability ) Part II-Fund Administration-
) Limitation on Liabilities

23. Bonding arrangements ) *

24. Other material provisions of ) *
trust indenture or agreement )

III. Organization, Personnel and Affiliated Persons of Depositor

25. Organization of Depositor ) Part II-Fund Administration-Sponsor

26. Fees received by Depositor ) Part II-Expenses
) Part II-Public Offering-Sponsor and
Underwriter Compensation

27. Business of Depositor ) Part II-Fund Administration-Sponsor

28. Certain information as to ) Part II-Fund Administration-Sponsor
officials and affiliated )
persons of Depositor )

29. Companies owning securities of ) Part II-Fund Administration-
Sponsor ) Depositor

30. Controlling persons of Depositor ) Part II-Fund Administration-Sponsor

31. Compensation of Directors ) *

32. Compensation of Directors ) *

33. Compensation of Employees ) *

34. Compensation to other persons ) Part II-Expenses

IV. Distribution and Redemption of Securities

35. Distribution of trust's ) Part II-The Trusts-The Fund
securities by states ) Part II-Public Offering

36. Suspension of sales of trust's ) Part II-Public Offering
securities )

37. Revocation of authority to ) *
distribute )

38. (a) Method of distribution )
)
(b) Underwriting agreements ) Part II-Public Offering
)
(c) Selling agreements )

39. (a) Organization of principal )
underwriter )
) Part II-Fund Administration-Sponsor
(b) N.A.S.D. membership by )
principal underwriter )

40. Certain fees received by ) *
principal underwriter )

41. (a) Business of principal ) Part II-Fund Administration-Sponsor
underwriter )

(b) Branch offices of principal ) *
underwriter )

42. Ownership of securities of the ) *
trust )

43. Certain brokerage commissions )
received by principal ) Part II-Public Offering-Sponsor and
underwriter ) Underwriter Compensation

44. (a) Method of valuation )
)
(b) Schedule as to offering )
Part I-Summary of Essential Financial
price ) Information
) Part II-Public Offering
(c) Variation in offering price )
to certain persons )

45. Suspension of redemption rights ) Part II-Rights of Unitholders-
Redemption of Units

46. (a) Redemption valuation )
) Part II-Rights of Unitholders-
Redemption of Units
(b) Schedule as to redemption )
price )

47. Purchase and sale of interests ) Part II-The Trusts-The Fund
in underlying securities ) Part II-Fund Administration-
Portfolio Administration

V. Information Concerning the Trustee or Custodian

48. Organization and regulation of ) Part II-Fund Administration-Trustee
trustee )

49. Fees and expenses of trustee )
Part I-Summary of Essential Financial
) Information
) Part II-Expenses

50. Trustee's lien ) Part II-Expenses

VI. Information Concerning Insurance of Holders of Securities

51. Insurance of holders of trust's )
securities ) *

VII. Policy of Registrant

52. (a) Provisions of trust agree- )
ment with respect to )
replacement or elimi- )
nation of portfolio )
securities )
)
)
(b) Transactions involving )
Part II-Fund Administration-Portfolio
elimination of underlying ) Administration
securities ) Part II-Fund Administration-
) Replacement Bonds
(c) Policy regarding substitu- )
tion or elimination of )
underlying securities )

(d) Fundamental policy not ) *
otherwise covered )

53. Tax Status of trust ) Part II-Federal Tax Status

VIII. Financial and Statistical Information

54. Trust's securities during ) *
last ten years )

55. ) *
)

56. Certain information regarding ) *
)

57. Periodic payment certificates ) *

58. ) *

59. Financial statements (Instruc- )
Part I-Summary of Essential Financial
tions 1(c) to Form S-6) ) Information
) Part I-Statement of Condition
__________________________________
* Inapplicable, omitted, answer negative or not required
Preliminary Prospectus Dated December 3, 1997
Subject to completion

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

Van Kampen American Capital
Prospectus Part I

California Insured Municipals Income Trust, Series ______

California Insured Municipals Income Trust, Series _____ (the "Trust"
) (included in Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 300 (the "Fund" )) consists of
interest-bearing obligations issued by or on behalf of municipalities and
other governmental authorities, the interest on which is, in the opinion of
bond counsel to the issuer, exempt from all Federal income taxes under
existing law and exempt to the extent described herein from state and local
taxes when held by residents of the state where the issuers are located (the
"Bonds" ). The objective of the Trust is Federal and state tax-exempt
income and conservation of capital through an investment in a diversified
portfolio of tax-exempt bonds. The Units of the Trust are rated "AAA"
by Standard & Poor's. The Trust is referred to herein as the "State
Trust" or the "Insured Trust" .

The Trust consists of _____ issues of Bonds. _____of the Bonds in the Trust
are the general obligation of the governmental entities issuing them or are
backed by the taxing power thereof. The remaining issues are payable from the
income of a specific project or authority and are not supported by the
issuer's power to levy taxes. These issues are divided by purpose of issue
(and percentage of principal amount to total Trust) as follows: ______The
dollar weighted average maturity of the Bonds is _____ years.

<TABLE>
<CAPTION>
Monthly Semi-Annual
------------ ----------------
<S> <C> <C>
Estimated Current Return: % %
Estimated Long Term Return: % %
CUSIP:
</TABLE>

__________, 1998

This Prospectus Part I may not be distributed unless accompanied by Part II.

Both parts of this Prospectus should be retained for future reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

Summary of Essential Financial Information
<S> <C> <C> <C>
Initial Date of Deposit: . Principal Amount of Bonds per Unit <F1>: $
Principal Amount of Bonds: $ Number of Units:
</TABLE>

<TABLE>
<CAPTION>
Public Offering Price
<S> <C>
Aggregate Offering Price of Bonds: $
Aggregate Offering Price of Bonds per Unit: $
Plus Sales Charge per Unit: $
Public Offering Price per Unit <F2>: $
Redemption Price per Unit:....................$
- ------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Estimated Distributions
<S> <C> <C>
Semi-
Monthly Annual
-------------------------- --------------------------
Initial Distribution.......$ _____ on 1997 $ _____ on 1997
Normal Distribution <F3>...$ $
Record Dates............... 10th day of each month January 10 and July 10
Distribution Dates......... 25th day of each month January 25 and July 25
- --------------------------------------------------------------------------------

</TABLE>

<TABLE>
Estimated Annual Income Per Unit
<CAPTION>
Semi-
.................................... Monthly Annual
----------- ----------
<S> <C> <C>
Estimated Interest Income...........$ $
Less Estimated General Expenses $ $
Less Estimated Insurance Expenses $ $
Estimated Net Interest Income.......$ $
- ----------------------------------------------------------
</TABLE>

<TABLE>
Expenses

<CAPTION>
Semi-
Monthly Annual
----------- ----------
<S> <C> <C>
Sales Charge (% of Public Offering Price) ... 4.90% 4.90%
Estimated Annual Expenses per Unit...........
Trustee's Fee <F4><F5>.......................$ 0.91 $ 0.51
Evaluator's Supervisory Fee..................$ 0.25 $ 0.25
Evaluator's Evaluation Fee <F4>..............$ 0.30 $ 0.30
Other Operating Expenses.....................$ $
----------- ----------
Total Annual Expenses per Unit.............$ $
=========== ==========
- -------------------------------------------------------------------

- ----------
<FN>
<F1>Because certain of the Bonds may from time to time under certain circumstances
be sold or redeemed or will be called or mature in accordance with their terms
(including the call or sale of zero coupon bonds at prices less than par
value), there is no guarantee that the value of each Unit at Trust termination
will be equal to the Principal Amount of Bonds per Unit.

<F2>After the First Settlement Date (_____, 1998), Unitholders will pay accrued
interest from such date to the settlement date less distributions from the
Interest Account after the First Settlement Date.

<F3>This is based on estimated cash flows per Unit which will vary with changes in
expenses, interest rates and maturity, call, exchange or sale of the Bonds.
Estimated cash flows are set forth in the Information Supplement or are
available upon request.

<F4>This fee is assessed per $1,000 principal amount of Bonds. Other fees are
assessed per Unit.

<F5>During the first year the Trustee will reduce its fee by approximately $_____
per Unit (which is the estimated interest to be earned prior to the expected
delivery dates for the "when, as and if issued" Bonds). Should the
interest exceed this amount, the Trustee will reduce its fee up to its annual
fee. After the first year, the Trustee's fee will be the amount indicated
above. Estimated Interest Income will increase to $_____. Estimated General
Expenses will increase to $_____ and $_____ under the monthly and semi-annual
distribution plans, respectively. Estimated Net Interest Income will remain as
shown.
</TABLE>

<TABLE>
PORTFOLIO

<CAPTION>
Aggregate Name of Issuer, Title, Interest Rate and Redemption Offering Price To
Principal Maturity Date of Bonds<F1><F2> Rating<F3> Feature<F4> Trust <F2>
- -------- ------------------------------------------- -------------- --------------- ------------------
<S> <C> <C> <C> <C>
$ ........................................... $
$ $
== ==
- ----------
All of the Bonds are insured either by one of the Preinsured Bond Insurers as
indicated in the Bond name or by a Portfolio Insurer under a portfolio
insurance policy. See "Insurance on the Bonds in the Insured Trusts"
in Prospectus Part II.

For an explanation of the footnotes used on this page, see "Notes to
Portfolio" .
</TABLE>

Notes to Portfolio

- --------------------------------------------------------------------------
(1)The Bonds are represented by "regular way" or "when issued"
contracts for the performance of which an irrevocable letter of credit,
obtained from an affiliate of the Trustee, has been deposited with the
Trustee. Contracts to acquire the Bonds were entered into during the period
from _____ to _____.

(2)Other information regarding the Bonds is as follows: Cost to Sponsor -
_____; Profit (Loss) to Sponsor - _____; Bid Side Evaluation of Bonds - _____.
The Bonds are insured as follows: AMBAC Assurance portfolio insurance -
_____%; Financial Guaranty portfolio insurance - _____%; Preinsured Bonds -
_____%.

The Sponsor may have entered into contracts which hedge interest rate
fluctuations on certain Bonds. The cost of any such contracts and the
corresponding gain or loss is included in the Cost to Sponsor. Bonds marked by
"##" following the maturity date have been purchased on a "when,
as and if issued" or "delayed delivery" basis. Interest on these
Bonds begins accruing to the benefit of Unitholders on their respective dates
of delivery. Delivery is expected to take place at various dates after the
First Settlement Date.

"#" prior to the coupon rate indicates that the Bond was issued at an
original issue discount. See "The Trusts--Risk Factors" . The tax
effect of Bonds issued at an original issue discount is described in "
Federal Tax Status" in Prospectus Part II.

(3)All ratings are by Standard & Poor's unless otherwise indicated. "*"
indicates that the rating of the Bond is by Moody's, "o"indicates
that the rating is contingent upon receipt by the rating agency of a policy of
insurance obtained by the issuer of the bonds. "N/R" indicates that
the rating service did not provide a rating for that Bond. For a brief
description of the ratings see "Description of Ratings" in the
Information Supplement.

(4)This is the year in which each Bond is initially or currently callable and
the call price for that year. Each Bond continues to be callable at declining
prices thereafter (but not below par value) except for original issue discount
bonds which are redeemable at prices based on the issue price plus the amount
of original issue discount accreted to redemption date plus, if applicable,
some premium, the amount of which will decline in subsequent years. "
S.F." indicates a sinking fund is established with respect to an issue of
Bonds. Certain Bonds may be subject to redemption without premium prior to the
date shown pursuant to extraordinary optional or mandatory redemptions if
certain events occur. See "The Trusts--Risk Factors" in Prospectus
Part II.

California Risk Factors. The financial condition of California is affected by
various national, economic, social and environmental policies and conditions.
Additionally, limitations imposed by constitutional amendments, legislative
measures, or voter initiatives on the State and its local governments
concerning taxes, bond indebtedness and other matters may constrain the
revenue-generating capacity of the State and its local governments and,
therefore, the ability of the issuers of the Bonds to satisfy their
obligations. The State faces a structural imbalance in its budget with the
largest programs supported by the General Fund (education, health, welfare and
corrections) growing at rates higher than the growth rates for the principal
revenue sources of the General Fund. All outstanding general obligation bonds
of the State are rated "A" by Standard & Poor's and "A1" by
Moody's.

The economic vitality of the State and its various regions and, therefore, the
ability of the State and its local governments to satisfy the Bonds, are
affected by numerous factors, such as natural disasters and cutbacks in
federal defense spending. The California economy continues to show weakness in
manufacturing particularly aerospace, construction, services and trade.
California's population increase has resulted in traffic congestion, school
overcrowding and high housing costs which have caused an increase in demand
for government services and which may impede future economic growth.

The State is a party to numerous lawsuits in which an adverse final decision
could materially affect the State's governmental operations and its ability to
pay debt service on its obligations. On December 7, 1994, Orange County,
California, together with its pooled investment fund filed for protection
under Chapter 9 of the federal Bankruptcy Code. Many governmental entities
kept moneys in the pooled investment fund.

Further information concerning California risk factors may be obtained upon
request to the Sponsor as described in "Additional Information" in
Prospectus Part II.

Tax Status. For a discussion of the Federal tax status of income earned on
California IM-IT Trust Units, see "Federal Tax Status" in Prospectus
Part II.

In the opinion of Orrick, Herrington & Sutcliffe, LLP, special counsel to the
Fund for California tax matters, under existing California income and property
tax law applicable to individuals who are California residents:

(1)the California IM-IT Trust is not an association taxable as a corporation
and the income of the California IM-IT Trust will be treated as the income of
the Unitholders under the income tax laws of California;

(2)amounts treated as interest on the underlying Bonds in the California IM-IT
Trust which are exempt from tax under California personal income tax and
property tax laws when received by the California IM-IT Trust will, under such
laws, retain their status as tax-exempt interest when distributed to
Unitholders. However, interest on the underlying Bonds attributed to a
Unitholder which is a corporation subject to the California franchise tax laws
may be includable in its gross income for purposes of determining its
California franchise tax. Further, certain interest which is attributable to a
Unitholder subject to the California personal income tax and which is treated
as an item of tax preference for purposes of the federal alternative minimum
tax pursuant to Section 57(a)(5) of the Internal Revenue Code of 1986 may also
be treated as an item of tax preference that must be taken into account in
computing such Unitholder's alternative minimum taxable income for purposes of
the California alternative minimum tax enacted by 1987 California Statutes,
chapter 1138. However, because of the provisions of the California
Constitution exempting the interest on bonds issued by the State of
California, or by local governments within the state, from taxes levied on
income, the application of the new California alternative minimum tax to
interest otherwise exempt from the California personal income tax in some
cases may be unclear;

(3)under California income tax law, each Unitholder in the California IM-IT
Trust will have a taxable event when the California IM-IT Trust disposes of a
Security (whether by sale, exchange, redemption, or payment at maturity) or
when the Unitholder redeems or sells Units. Because of the requirement that
tax cost basis be reduced to reflect amortization of bond premium, under some
circumstances a Unitholder may realize taxable gains when Units are sold or
redeemed for an amount equal to, or less than, their original cost. The total
cost of each Unit in the California IM-IT Trust to a Unitholder is allocated
among each of the Bond issues held in the California IM-IT Trust (in
accordance with the proportion of the California IM-IT Trust comprised by each
Bond issue) in order to determine his per Unit tax cost for each Bond issue;
and the tax cost reduction requirements relating to amortization of bond
premium will apply separately to the per Unit tax cost of each Bond issue.
Unitholders' bases in their units, and the bases for their fractional interest
in each Trust asset, may have to be adjusted for their pro rata share of
accrued interest received, if any, on Bonds delivered after the Unitholders'
respective settlement dates;

(4)under the California personal property tax laws, bonds (including the Bonds
in the California IM-IT Trust) or any interest therein is exempt from such
tax;

(5)any proceeds paid under the insurance policy issued to the California IM-IT
Trust with respect to the Bonds which represent maturing interest on defaulted
obligations held by the Trustee will be exempt from California personal income
tax if, and to the same extent as, such interest would have been so exempt if
paid by the issuer of the defaulted obligations; and

(6)under Section 17280(b)(2) of the California Revenue and Taxation Code,
interest on indebtedness incurred or continued to purchase or carry Units of
the California IM-IT Trust is not deductible for the purposes of the
California personal income tax. While there presently is no California
authority interpreting this provision, Section 17280(b)(2) directs the
California Franchise Tax Board to prescribe regulations determining the proper
allocation and apportionment of interest costs for this purpose. The Franchise
Tax Board has not yet proposed or prescribed such regulations. In interpreting
the generally similar Federal provision, the Internal Revenue Service has
taken the position that such indebtedness need not be directly traceable to
the purchase or carrying of Units (although the Service has not contended that
a deduction for interest on indebtedness incurred to purchase or improve a
personal residence or to purchase goods or services for personal consumption
will be disallowed). In the absence of conflicting regulations or other
California authority, the California Franchise Tax Board generally has
interpreted California statutory tax provisions in accord with Internal
Revenue Service interpretations of similar Federal provisions.

At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exemption of interest thereon from Federal income
tax and California personal income tax are rendered by bond counsel to the
respective issuing authorities. Except in certain instances in which Orrick,
Herrington & Sutcliffe, LLP, acted as bond counsel to issuers of Bonds, and as
such made a review of proceedings relating to the issuance of certain Bonds at
the time of their issuance, Orrick, Herrington & Sutcliffe, LLP, has not made
any special review for the California IM-IT Trust of the proceedings relating
to the issuance of the Bonds or of the basis for such opinions.

Underwriting. The Underwriters named below have purchased Units in the
following amounts from the Sponsor. For additional information regarding the
Underwriters, including information relating to compensation and benefits
received by the Underwriters, see "Public Offering--Sponsor and
Underwriter Compensation" in Prospectus Part II.

<TABLE>
<CAPTION>
Name Address Units
---------------------------------------------------------
<S> <C> <C>
=========================================================
</TABLE>

Report of Independent Certified Public Accountants

To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of California Insured Municipals Income Trust, Series
_____ (included in Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 300):

We have audited the accompanying statement of condition and the portfolio of
California Insured Municipals Income Trust, Series ______ (included in Insured
Municipals Income Trust and Investors' Quality Tax-Exempt Trust Multi-Series
300) as of _____, 1998). The statement of condition and portfolio are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
such financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the 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 an irrevocable letter of credit deposited
to purchase tax-exempt bond by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides 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 California Insured Municipals
Income Trust, Series ______ (included in Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust Multi-Series 300) as of _____, 1998, in
conformity with generally accepted accounting principles.

GRANT THORNTON LLP

Chicago, Illinois
_____, 1998

<TABLE>
Statement of Condition
As of ________, 1998
<CAPTION>
INVESTMENT IN BONDS

<S> <C>
Contracts to purchase Bonds <F1><F2>..................... $
Accrued interest to the First Settlement Date <F1><F2>...
--
Total.................................................... $
==
LIABILITY AND INTEREST OF UNITHOLDERS
Liability--
Accrued interest payable to Sponsor <F1><F2>............. $
Interest of Unitholders--
Cost to investors........................................
Less: Gross underwriting commission......................
--
Net interest to Unitholders <F1><F2>.....................
--
Total.................................................... $
==

==========
The value of the Bonds is determined by Interactive Data Corporation on the
bases set forth under "Public Offering--Offering Price" in Prospectus
Part II. The contracts to purchase Bonds are collateralized by an irrevocable
letter of credit in an amount sufficient to satisfy such contracts.

The Trustee will advance the amount of the net interest accrued to the First
Settlement Date to the Trust for distribution to the Sponsor as the Unitholder
of record as of such date.

</TABLE>

Prospectus Part I

________, 1998

Insured Municipals Income Trust and Investors' Quality Tax-Exempt Trust,
Multi-Series 300

California Insured Municipals Income Trust, Series ______

A Wealth of Knowledge A Knowledge of Wealth
VAN KAMPEN AMERICAN CAPITAL

One Parkview Plaza
Oakbrook Terrace, Illinois 60181

2800 Post Oak Boulevard
Houston, Texas 77056

This Prospectus Part I may not be distributed unless accompanies by Part II.
Both parts of this Prospectus should be retained for future reference.

___________, 1998

Van Kampen American Capital
Prospectus Part II

Insured Municipals Income Trust and Investors' Quality Tax-Exempt Trust,
Multi-Series

The Fund. The objectives of the Fund are Federal and, in the case of a State
Trust, state tax-exempt income and conservation of capital through an
investment in a diversified portfolio of tax-exempt bonds. The Fund consists
of the underlying separate unit investment trusts set forth in Prospectus Part
I. The Bonds are interest-bearing obligations issued by or on behalf of
municipalities and other governmental authorities, the interest on which is
exempt from all Federal income taxes under existing law in the opinion of bond
counsel to the issuer. In addition, the interest income of each State Trust
is, in the opinion of bond counsel to the issuer, exempt to the extent
indicated from state and local taxes, when held by residents of the state
where the issuers of Bonds are located. Except in specific instances as noted
in Prospectus Part I, the information contained in this Prospectus Part II
shall apply to each Trust in its entirety.

"AAA" Rating for the Insured Trusts. Insurance guaranteeing the
payments of principal and interest, when due, on the Bonds in each Insured
Trust has been obtained from a municipal bond insurance company. See "
Insurance on the Bonds in the Insured Trusts" . Insurance relates only to
the Bonds and not to the Units or to the market value thereof. As a result of
such insurance, the Units of each Insured Trust have received a rating of "
AAA" by Standard & Poor's, A Division of the McGraw-Hill Companies ("
Standard & Poor's" ). Units of the Trusts are not insured by the FDIC, are
not deposits or other obligations of, or guaranteed by, any government agency
and are subject to investment risk, including possible loss of the principal
amount invested.

Public Offering Price. The Public Offering Price of Units during the initial
offering period includes the aggregate offering price of the Bonds, the
applicable sales charge, cash, if any, in the Principal Account of the Trust,
and accrued interest, if any. Sales charges for the Trusts are set forth under
"Public Offering--General." During the initial offering period, the
sales charge is reduced for sales involving at least 100 Units.

Estimated Current and Long-Term Returns. The Estimated Current Returns and
Estimated Long-Term Returns to Unitholders are described on the cover of
Prospectus Part I. See "Estimated Current and Long-Term Returns."

Distribution Options. Unitholders may elect to receive distributions on a
monthly or semi-annual basis. See "Rights of Unitholders--Distributions of
Interest and Principal" . Those indicating no choice will be deemed to have
chosen the monthly distribution plan.

Market for Units. Although not obligated to do so, the Sponsor intends to, and
certain of the other Underwriters may, maintain a secondary market for the
Units. If a secondary market is not available, a Unitholder will always be
able to redeem his Units through the Trustee on any business day. See "
Rights of Unitholders--Redemption of Units" and "Public
Offering--Market for Units" .

Reinvestment Option. Unitholders may reinvest their distributions into Van
Kampen American Capital or Morgan Stanley mutual funds. See "Rights of
Unitholders--Reinvestment Option" . Unitholders may also have the option of
exchanging their investment for units of other Van Kampen American Capital
unit investment trusts at a reduced sales charge. Unitholders may obtain a
prospectus for such trusts from the Sponsor.

Risk Factors. An investment in Units should be made with an understanding of
certain risks, including, among other factors, the inability of the issuer or
an insurer, if any, to pay the principal of or interest on a bond when due,
volatile interest rates, early call provisions, and changes to the tax status
of the Bonds. See "The Trusts--Risk Factors" .

This Prospectus Part II may not be distributed unless accompanied by Part
I.Both Parts of this Prospectus should be retained for future reference.

An Information Supplement has been filed with the Securities and Exchange
Commission ("SEC" ) and can be obtained without charge by calling (800)
___-____ or is available along with other related materials at the SEC's
Internet site (http://www.sec.gov). This Prospectus incorporates by reference
the entire Information Supplement.

THE TRUSTS

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The Fund. This series of the Insured Municipals Income Trust or the Insured
Municipals Income Trust and Investors' Quality Tax-Exempt Trust (the "
Fund" ), consists of the underlying separate unit investment trusts
described in Prospectus Part I. The Fund was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement (the "Trust
Agreement" ), dated the date of Prospectus Part I (the "Date of
Deposit" ) among Van Kampen American Capital Distributors, Inc., as
Sponsor, American Portfolio Evaluation Services, a division of Van Kampen
American Capital Investment Advisory Corp., as Evaluator, and The Bank of New
York, as Trustee.

The Fund consists of separate portfolios of interest-bearing obligations
issued by or on behalf of states and territories of the United States, and
political subdivisions and authorities thereof, the interest on which is, in
the opinion of recognized bond counsel to the issuing authorities, excludable
from gross income for Federal income tax under existing law. All issuers of
Bonds in a State Trust are located in the state for which the Trust is named
or in United States territories or possessions and their public authorities;
consequently, in the opinion of recognized bond counsel to the Bond issuers,
the interest earned on the Bonds is exempt to the extent indicated in
Prospectus Part I from state and local taxes. Further, in the opinion of bond
counsel to the respective issuers, the interest income of each Bond in a U.S.
Territorial IM-IT Trust is exempt from state, Commonwealth of Puerto Rico and
local income taxation. With the exception of New York and Pennsylvania Trusts,
Units of a State Trust may be purchased only by residents of the state for
which the Trust is named. Units of a New York Trust may be purchased by
residents of New York, Connecticut and Florida. Units of a Pennsylvania Trust
may be purchased by residents of Pennsylvania, Connecticut, Florida, Maryland,
New York, Ohio and West Virginia. State Trusts, other than State Intermediate
Laddered Maturity Trusts or State Intermediate Trusts, are referred to herein
as "Long-Term State Trusts" .

On the Date of Deposit, the Sponsor deposited with the Trustee the aggregate
principal amount of Bonds indicated in the "Summary of Essential Financial
Information" in Prospectus Part I. The Bonds initially consist of delivery
statements relating to contracts for their purchase and cash, cash equivalents
and/or irrevocable letters of credit issued by a financial institution.
Thereafter, the Trustee, in exchange for the Bonds, delivered to the Sponsor
evidence of ownership of the number of Units indicated under "Summary of
Essential Financial Information" in Prospectus Part I.

The portfolio of any IM-IT, IM-IT Discount, U.S. Territorial IM-IT, Long-Term
State or National Quality Trust consists of Bonds maturing approximately 15 to
40 years from the Date of Deposit. The approximate range of maturities from
the Date of Deposit for Bonds in any IM-IT Limited Maturity Trust, IM-IT
Intermediate Trust, State Intermediate Laddered Maturity Trust and IM-IT Short
Intermediate Trust is 12 to 15 years, 5 to 15 years, 5 to 10 years and 3 to 7
years, respectively. The portfolio of any State Intermediate Laddered Maturity
Trust is structured so that approximately 20% of the Bonds will mature each
year, beginning in approximately the fifth year of the Trust, entitling each
Unitholder to a return of principal. This return of principal may offer
Unitholders the opportunity to respond to changing economic conditions and to
specific financial needs that may arise between the fifth and tenth years of
the Trust. However, the flexibility provided by the return of principal may
also eliminate a Unitholder's ability to reinvest at a rate as high as the
yield on the Bonds which matured.

Each Unit initially offered represents a fractional undivided interest in the
principal and net income of a Trust. To the extent that any Units are redeemed
by the Trustee, the fractional undivided interest in a Trust represented by
each Unit will increase, although the actual interest in the Trust will remain
unchanged. Units will remain outstanding until redeemed by Unitholders or
until the termination of the Trust Agreement.

Objectives and Bond Selection. The objectives of the Fund are income exempt
from Federal income taxation and, in the case of a State Trust, Federal and
state income taxation and conservation of capital through an investment in
diversified portfolios of Federal and state tax-exempt obligations. A State
Intermediate Laddered Maturity Trust has additional objectives of providing
protection against changes in interest rates and investment flexibility
through an investment in a laddered portfolio of intermediate-term
interest-bearing obligations with maturities ranging from approximately 5 to
10 years in which roughly 20% of the Bonds mature each year beginning in
approximately the fifth year of the Trust. There is, of course, no guarantee
that the Trusts will achieve their objectives. The Fund may be an appropriate
investment vehicle for investors who desire to participate in a portfolio of
tax-exempt fixed income bonds with greater diversification than they might be
able to acquire individually. insurance guaranteeing the timely payment, when
due, of all principal and interest on the Bonds in each Insured Trust has been
obtained from a municipal bond insurance company. For information relating to
insurance on the Bonds, see "Insurance on the Bonds in the Insured
Trusts" . In addition, these bonds are often not available in small amounts.

In selecting Bonds for the Trusts, the Sponsor considered the following
factors, among others: (a) either the Standard & Poor's rating of the Bonds
was not less than "BBB-" for Insured Trusts and "A-" for
Quality Trusts, or the Moody's Investors Service, Inc. ("Moody's" )
rating of the Bonds was not less than "Baa" for Insured Trusts and
"A" for the Quality Trusts, including provisional or conditional
ratings, respectively, (or, if not rated, the Bonds had credit characteristics
sufficiently similar to the credit characteristics of interest-bearing
tax-exempt bonds that were so rated as to be acceptable for acquisition by the
Fund in the opinion of the Sponsor), (b) the prices of the Bonds relative to
other bonds of comparable quality and maturity, (c) the diversification of
Bonds as to purpose of issue and location of issuer and (d) with respect to
the Insured Trusts, the availability and cost of insurance. After the Date of
Deposit, a 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 elimination
of a Bond from a Trust but may be considered in the Sponsor's determination as
to whether or not to direct the Trustee to dispose of the Bond (see "Fund
Administration--Portfolio Administration" ).

Risk Factors. The Trusts include certain types of bonds as described on the
cover of Prospectus Part I. An investment in Units should be made with an
understanding of the characteristics of and risks associated with such bonds.
The following is a brief summary of certain of these risks. Additional
information is included in Prospectus Part I and in the Information
Supplement. See "Additional Information" . Neither the Sponsor nor the
Trustee are liable for any default, failure or defect in any of the Bonds.

Certain of the Bonds may be general obligations of a governmental entity that
are backed by the taxing power of the entity. All other Bonds are revenue
bonds payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. General obligation bonds are
secured by the issuer's pledge of its faith, credit and taxing power for the
payment of principal and interest. Revenue bonds, on the other hand, are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise tax or
other specific revenue source. There are, of course, variations in the bond of
the different Bonds, both within a particular classification and between
classifications, depending on numerous factors.

Mortgage loan obligations may be FHA insured or may be single family mortgage
revenue bonds issued for the purpose of acquiring from originating financial
institutions notes secured by mortgages on residences located within the
issuer's boundaries and owned by persons of low or moderate income. 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. A substantial portion of these bonds
will probably be redeemed prior to their scheduled maturities or even prior to
their ordinary call dates. Additionally, unusually high rates of default on
the underlying mortgage loans may reduce revenues available for the payment of
principal of or interest on mortgage revenue bonds.

Health care revenue bonds have ratings issued for health care facilities that
are often based on feasibility studies that contain projections of occupancy
levels, revenues and expenses. A facility's gross receipts and net income
available for debt service may be affected by future events and conditions
including, among other things, demand for services and the ability of the
facility to provide the services required, competition with other health care
facilities, efforts by insurers and governmental agencies to limit rates and
legislation establishing state rate-setting agencies.

Public utility bond issuers sell wholesale and retail electric power and gas.
General problems of these issuers include difficulty in financing large
construction programs in an inflationary period, costs and delays attributable
to environmental considerations, the difficulty of the capital market in
absorbing utility debt, difficulty in obtaining fuel at reasonable prices, the
effect of energy conservation and government regulations.

Water and/or sewerage revenue bonds are generally payable from user fees. The
problems of these issuers include the ability to obtain rate increases,
population decline resulting in decreased user fees, financing, environmental
considerations, discovering fresh water and the impact of "no-growth"
zoning ordinances.

Industrial revenue bonds ("IRBs" ) have generally been issued under
bond resolutions under which the revenues and receipts payable have been
assigned and pledged to purchasers. In some cases, a mortgage on the
underlying project may have been granted as security for the IRBs. Regardless
of the structure, payment of IRBs is solely dependent upon the
creditworthiness of the corporate operator of the project or corporate
guarantor which may be affected by such things as cyclicality of revenues and
earnings, regulatory and environmental restrictions, litigation resulting from
accidents, extensive competition and financial deterioration resulting from a
corporate restructuring.

Lease bonds are secured by lease payments of a governmental entity and are
often in the form of certificates of participation. Although the lease bonds
do not constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease bond is ordinarily backed by
the municipality's covenant to appropriate for and make the payments due under
the lease bond. However, certain lease bonds contain "
non-appropriation" clauses which provide that the municipality has no
obligation to make lease payments in future years unless money is appropriated
for such purpose on a yearly basis. A governmental entity that enters into
such a lease agreement cannot obligate future governments to appropriate for
and make lease payments but covenants to take such action as is necessary to
include any lease payments due in its budgets and to make the appropriations
therefor. A governmental entity's failure to appropriate for and to make
payments under its lease bond could result in insufficient funds available for
payment of the bonds secured thereby. Although "non-appropriation"
lease bonds are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult.

Education bond issuers govern the operation of schools, colleges and
universities and revenues are derived mainly from ad valorem taxes or from
tuition, dormitory revenues, grants and endowments. General problems relating
to school bonds include litigation contesting the financing of public
education, a declining percentage of the population consisting of "
college" age individuals, inability to raise tuitions and fees
sufficiently and government legislation or regulations which may adversely
affect the revenues or costs of the issuers.

Transportation bonds are payable from revenues derived from the ownership and
operation of facilities such as airports, bridges, turnpikes, port
authorities, convention centers and arenas. Airport operating income may be
affected by the ability of the airlines to meet their obligations under use
agreements. Payment on bonds related to other facilities 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 Bonds are payable from revenues derived from the operation of resource
recovery facilities which are designed to process solid waste, generate steam
and convert steam to electricity. Resource recovery bonds may be subject to
extraordinary optional redemption at par upon the occurrence of circumstances
such as destruction or condemnation of a project, void or unenforceable
contracts, changes in the economic availability of raw materials, and
operating supplies or facilities, or other unavoidable changes adversely
affecting the operation of a project.

Certain Bonds may have been acquired at a market discount from par value at
maturity. The interest rates on these bonds are lower than current market
interest rates for newly issued bonds of comparable rating and type.
Generally, if interest rates for newly issued comparable bonds increase, the
market discount of previously issued bonds will increase, and if interest
rates for newly issued comparable bonds decline, the market discount of
previously issued bonds will decrease. The value of bonds purchased at a
market discount will generally increase in value faster than bonds purchased
at a market premium if interest rates decrease. Conversely, if interest rates
increase, the value of bonds purchased at a market discount will generally
decrease faster than bonds purchased at a market premium. In addition, if
interest rates rise, the prepayment risk of higher yielding, premium bonds and
the prepayment benefit for lower yielding, discount bonds will be reduced. A
bond purchased at a market discount and held to maturity will have a larger
portion of its total return in the form of taxable income and capital gain and
less in the form of tax-exempt interest income than a comparable bond newly
issued at current market rates. See "Federal Tax Status." Market
discount attributable to interest changes does not indicate a lack of market
confidence in the issue.

Certain Bonds may be "zero coupon" bonds. Zero coupon bonds are
purchased at a deep discount because the buyer receives 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 these 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 the bond. This implicit reinvestment of
earnings at the same rate eliminates the risk of being unable to reinvest
income at a rate as high as the implicit yield on the discount bond, but at
the same time eliminates the 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 bonds of comparable quality which pay interest.

Certain Bonds may have been purchased on a "when, as and if issued" or
"delayed delivery" basis. The delivery of these Bonds may be delayed
or may not occur. Interest on these Bonds begins accruing to the benefit of
Unitholders on their respective dates of delivery. To the extent any Bonds are
actually delivered to a Trust after the expected dates of delivery,
Unitholders who purchase their Units prior to the actual delivery date would
be required to adjust their tax basis in their Units for a portion of the
interest accruing on those Bonds during the interval between their purchase of
Units and the actual delivery of the Bonds. As a result of any adjustment, the
Estimated Current Return during the first year would be slightly lower than
stated herein. Unitholders will be "at risk" with respect to all Bonds
(i.e., may derive either gain or loss from fluctuations in the value of the
Bonds) from the date they order Units.

Certain Bonds 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 bond
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 bond price
is at a premium over par than when it is at a discount from par. The exercise
of redemption or call provisions generally will result in the distribution of
principal and may result in a reduction in the amount of subsequent interest
distributions; it may also affect the current return on Units. See "
Portfolio" in Prospectus Part I for a list of the sinking fund and call
provisions, if any, with respect to the Bonds. The Sponsor is unable to
predict all of the circumstances which may result in redemption of a Bond.

To the best knowledge of the Sponsor, there is no litigation pending as of the
Date of Deposit in respect of any Bonds which might reasonably be expected to
have a material adverse effect upon the Trusts. At any time after the Date of
Deposit, litigation may be initiated on a variety of grounds with respect to
the Bonds. Such litigation may affect the validity of the Bonds or the
tax-free nature of interest payments. While the outcome of litigation can
never be predicted, the Fund has received or will receive opinions of bond
counsel to the issuers of each Bond on the date of issuance to the effect that
the Bonds have been validly issued and interest payments are exempt from
Federal income tax. In addition, other factors may arise from time to time
which potentially may impair the ability of issuers to meet obligations
undertaken with respect to the Bonds.

ESTIMATED CURRENT AND LONG-TERM RETURNS

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The Estimated Current Returns and the Estimated Long-Term Returns as of the
Date of Deposit are set forth on the cover of the Prospectus Part I. Estimated
Current Return is calculated by dividing the estimated net annual interest
income per Unit by the Public Offering Price. The estimated net annual
interest income per Unit will vary with changes in fees and expenses of the
Trust and with the principal prepayment, redemption, maturity, exchange or
sale of Bonds. The Public Offering Price will vary with changes in the price
of the Bonds. Accordingly, there is no assurance that the present Estimated
Current Return will be realized in the future. Estimated Long-Term Return is
calculated using a formula which (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 the Bonds and (2) takes into account
the expenses and sales charge associated with Units. Since the value and
estimated retirements of the Bonds and the expenses of a Trust will change,
there is no assurance that the present Estimated Long-Term Return will be
realized in the future. The 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 the
Estimated Current Return calculation includes only net annual interest income
and Public Offering Price.

In order to acquire certain Bonds, it may be necessary for the Sponsor or
Trustee to pay amounts covering accrued interest on the Bonds which exceed the
amounts which will be made available through cash furnished by the Sponsor on
the Date of Deposit. This cash may exceed the interest which would accrue to
the First Settlement Date. The Trustee has agreed to pay for any amounts
necessary to cover any excess and will be reimbursed when funds become
available from interest payments on the related Bonds. Also, since interest on
any "when, as and if issued" Bonds does not begin accruing as
tax-exempt interest income to the benefit of Unitholders until the date of
delivery, the Trustee may reduce its fee and pay Trust expenses in order to
maintain or approach the same estimated net annual interest income during the
first year of the Trust's operations as described under "Summary of
Essential Financial Information" in Prospectus Part I.

PUBLIC OFFERING

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General. Units are offered at the Public Offering Price. During the initial
offering period the Public Offering Price is based on the aggregate offering
price of the Bonds, the sales charge described below, cash, if any, in the
Principal Account and accrued interest, if any. After the initial public
offering period, the secondary market public offering price is based on the
bid prices of the Bonds, the sales charge described below, cash, if any, in
the Principal Account and accrued interest, if any. The minimum purchase in
the primary and secondary market is one Unit.

The initial offering period sales charges are as follows:

<TABLE>
<CAPTION>
Initial Offering Period Sale Charge
as Percent of
- ------------------------------------
<S> <C> <C>
Public Offering Offering Price
Trust Price of Bonds
- ----------------------------------------------------------------------------- ------------------ -----------------
IM-IT, U.S. Territorial IM-IT, Long-Term State and National Quality Trusts... 4.900% 5.152%
IM-IT Limited Maturity Trusts................................................ 4.300 4.493
IM-IT Discount Trusts........................................................ 4.000 4.167
IM-IT Intermediate Trusts.................................................... 3.900 4.058
State Intermediate Laddered Maturity Trusts.................................. 3.000 3.093
IM-IT Short Intermediate Trusts.............................................. 2.000 2.041
</TABLE>

The sales charge applicable to quantity purchases during the initial offering
period is reduced as follows:

<TABLE>
<CAPTION>
Sales Charge Reduction Per Unit
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
IM-IT, U.S.
Territorial
IM-IT,
Long-Term State IM-IT Short
Aggregate Number of and National Intermediate IM-IT Discount
Units Purchased* Quality Trusts Trust Trust Other Trusts
---------------- --------------- --------------- ------------------
100-249 Units.......... $4.00 $2.00 $ 2.00 $4.00
250-499 Units.......... $6.00 $3.00 $ 4.00 $6.00
500-999 Units.......... $14.00 $4.00 $ 6.00 $9.00
1,000 or more Units.... $19.00 $6.00 $ 8.00 $11.00
____________________
* The breakpoint sales charges are also applied on a dollar basis utilizing a breakpoint
equivalent in the above table of $1,000 per Unit and will be applied on whichever basis is
more favorable to the investor. The breakpoints will be adjusted to take into
consideration purchase orders stated in dollars which cannot be completely fulfilled due
to the Trusts' requirement that only whole Units be issued

</TABLE>

The secondary market sales charge is computed as described in the following
table based upon the estimated long-term return life of a Trust's portfolio:

Years To Maturity Sales Charge Years To Maturity Sales Charge Years To Maturity Sales Charge
<S> <C> <C> <C> <C> <C>
1 1.010 % 8 3.627 % 15 5.042 %
2 1.523 9 4.167 16 5.152
3 2.041 10 4.384 17 5.263
4 2.302 11 4.603 18 5.374
5 2.564 12 4.712 19 5.485
6 2.828 13 4.822 20 5.597
7 3.093 14 4.932 21 to 30 5.708
</TABLE>

For purposes of computation of the estimated long-term return life, Bonds will
be deemed to mature on their expressed maturity dates unless: (a) the Bonds
have been called for redemption or are subject to redemption at an earlier
call date, in which case this call date will be deemed to be the maturity
date; or (b) the Bonds are subject to a "mandatory tender" , in which
case the mandatory tender will be deemed to be the maturity date. The sales
charges in the above table are expressed as a percentage of the aggregate bid
prices of the Bonds. Expressed as a percent of the Public Offering Price, the
sales charge on a Trust consisting entirely of Bonds with 15 years to maturity
would be 4.80%. The sales charges in the table above do not apply to IM-IT
Discount Trusts. The applicable secondary market sales charges for an IM-IT
Discount Trust are set forth in the applicable Prospectus Part I.

Any reduced sales charge is the responsibility of the selling Underwriter,
broker, dealer or agent. The Sponsor will, however, increase the concession or
agency commission for quantity purchases. The reduced sales charge structure
in the initial offering period sales charge table above will apply on all
purchases by the same person from any one Underwriter or dealer of units of
Van Kampen American Capital-sponsored unit investment trusts which are being
offered in the initial offering period (a) on any one day (the "Initial
Purchase Date" ) or (b) on any day subsequent to the Initial Purchase Date,
if (1) the units purchased are of a unit investment trust purchased on the
Initial Purchase Date, and (2) the person purchasing the units purchased a
sufficient amount of units on the Initial Purchase Date to qualify for a
reduced sales charge on such date. In the event units of more than one trust
are purchased on the Initial Purchase Date, the aggregate dollar amount of
such purchases will be used to determine whether purchasers are eligible for a
reduced sales charge. Such aggregate dollar amount will be divided by the
public offering price per unit (on the day preceding the date of purchase) of
each respective trust purchased to determine the total number of units which
such amount could have purchased of each individual trust. Purchasers must
then consult the applicable trust's prospectus to determine whether the total
number of units which could have been purchased of a specific trust would have
qualified for a reduced sales charge and, if so qualified, the amount of such
reduction. Assuming a purchaser qualifies for a sales charge reduction or
reductions, to determine the applicable sales charge reduction or reductions
it is necessary to accumulate all purchases made on the Initial Purchase Date
and all purchases made in accordance with (b) above. Units purchased in the
name of the spouse of a purchaser or in the name of a child of such purchaser
("immediate family members" ) will be deemed for the purposes of
calculating the applicable sales charge to be additional purchases by the
purchaser. The reduced sales charges will also be applicable to a trustee or
other fiduciary purchasing Units for one or more trust estate or fiduciary
accounts.

Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law,
fathers-in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons (collectively referred to herein
as "related purchasers" )) of Van Kampen American Capital Distributors,
Inc. and its affiliates and Underwriters and their affiliates may purchase
Units at the Public Offering Price less the applicable underwriting commission
or less the applicable dealer concession in the absence of an underwriting
commission. Employees, officers and directors (including related purchasers)
of dealers and their affiliates and vendors providing services to the Sponsor
may purchase Units at the Public Offering Price less the applicable dealer
concession.

Purchasers of units of any two consecutive series of a Trust may aggregate
purchases of units of such series for purposes of the sales charge reduction
for quantity purchases, provided that at the time of the initial purchase of
units such purchaser submitted a purchase order for at least 100 units that
was partially unfulfilled due to a lack of units of such Trust series
available for sale at such time. The sales charge reduction shall be applied
to the subsequent purchase of units such that the aggregate sales charge
reduction applicable to both purchases will equal the amount described in the
initial offering period sales charge table above.

Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge
reduction for quantity purchases) less the concession the Sponsor typically
allows to brokers and dealers for purchases by (1) investors who purchase
Units through registered investment advisers, certified financial planners and
registered broker-dealers who in each case either charge periodic fees for
financial planning, investment advisory or asset management services, or
provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2)
bank trust departments investing funds over which they exercise exclusive
discretionary investment authority and that are held in a fiduciary, agency,
custodial or similar capacity, (3) any person who for at least 90 days, has
been an officer, director or bona fide employee of any firm offering Units for
sale to investors or their immediate family members (as described above) and
(4) officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases.

Offering Price. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in
Prospectus Part I in accordance with fluctuations in the prices of the Bonds.
The price of Units on the Date of Deposit was determined by adding the
applicable sales charge to the aggregate offering price of the Bonds and
dividing the sum by the number of Units outstanding. This price determination
was made on the basis of an evaluation of the Bonds prepared by Interactive
Data Corporation, a firm regularly engaged in the business of evaluating,
quoting or appraising comparable securities. During the initial offering
period, the Evaluator will value the Bonds as of the Evaluation Time on days
the New York Stock Exchange is open for business and will adjust the Public
Offering Price of Units accordingly. This Public Offering Price will be
effective for all orders received at or prior to the Evaluation Time on each
such day. The "Evaluation Time" is the close of trading on the New
York Stock Exchange on each day that the Exchange is open for trading. Orders
received by the Trustee, Sponsor or any Underwriter for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price. The secondary
market Public Offering Price per Unit will be equal to the aggregate bid price
of the Bonds plus the applicable secondary market sales charge and dividing
the sum by the number of Units outstanding. For secondary market purposes,
this computation will be made by the Evaluator as of the Evaluation Time for
each day on which any Unit is tendered for redemption and as necessary. The
offering price of Bonds may be expected to average approximately 0.5%-1% more
than the bid price. On the Date of Deposit, the offering side prices of the
Bonds were higher than the bid side prices of by the amounts indicated in "
Notes to Portfolio" in Prospectus Part I.

The aggregate price of the Bonds is determined on the basis of bid prices or
offering prices, as is appropriate, (a) on the basis of current market prices
obtained from dealers or brokers who customarily deal in bonds comparable to
those held by the Fund; (b) if these prices are not available, on the basis of
current market prices for comparable bonds; (c) by causing the value of the
Bonds to be determined by others engaged in the practice of evaluation,
quoting or appraising comparable bonds; or (d) by any combination of the
above. Market prices of the Bonds will generally fluctuate with changes in
market interest rates. Unless Bonds are in default in payment of principal or
interest or in significant risk of default, the Evaluator will not attribute
any value to the insurance obtained by an Insured Trust, if any.

The Evaluator will consider in its evaluation of Bonds which are in default in
payment of principal or interest or, in the Sponsor's opinion, in significant
risk of default (the "Defaulted Bonds" ) the value of any insurance
guaranteeing interest and principal payments. The value of the insurance will
be equal to the difference between (i) the market value of Defaulted Bonds
assuming the exercise of the right to obtain Permanent Insurance (less the
insurance premiums and related expenses attributable to the purchase of
Permanent Insurance) and (ii) the market value of Defaulted Bonds not covered
by Permanent Insurance. In addition, the Evaluator will consider the ability
of a Portfolio Insurer to meet its commitments under any insurance policy,
including commitments to issue Permanent Insurance. No value has been ascribed
to insurance obtained by an Insured Trust, if any, as of the date of this
Prospectus.

A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor prior
to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject
to the limitations of the Securities Exchange Act of 1934.

Accrued Interest. Accrued interest is an accumulation of unpaid interest on
securities which generally is paid semi-annually, although each Trust accrues
interest daily. Because of this, a Trust always has an amount of interest
earned but not yet collected by the Trustee. For this reason, with respect to
sales settling after the First Settlement Date, the proportionate share of
accrued interest to the settlement date is added to the Public Offering Price
of Units. Unitholders will receive the amount of accrued interest paid on
their Units on the next distribution date. In an effort to reduce the accrued
interest which would have to be paid by Unitholders, the Trustee will advance
the amount of accrued interest to the Sponsor as the Unitholder of record as
of the First Settlement Date. Consequently, the accrued interest added to the
Public Offering Price of Units will include only accrued interest from the
First Settlement Date to the date of settlement, less any distributions from
the Interest Account after the First Settlement Date. Because of the varying
interest payment dates of the Bonds, accrued interest at any point in time
will be greater than the amount of interest actually received by a Trust and
distributed to Unitholders. If a Unitholder sells or redeems all or a portion
of his Units, he will be entitled to receive his proportionate share of the
accrued interest from the purchaser of his Units.

Unit Distribution. Units will be distributed to the public by Underwriters,
broker-dealers and others at the Public Offering Price, plus accrued interest.
The Sponsor intends to qualify Units for sale in a number of states.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
for any single transaction as described in the following table, provided that
the Units are acquired from the Sponsor.

<TABLE>
<CAPTION>
IM-IT, U.S.
Territorial
IM-IT, State
Long- Term IM-IT
IM-IT State and IM-IT Short IM-IT Limited Intermediate
Discount National Intermediate Maturity Maturity Laddered
Trust Quality Intermediate Trust Trust Trust
- ----------------------- -------- ---------- ---------------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
1 - 99 Units...........$ 18.00.$ 30.00.$ 10.00. $ 25.00. $ 27.00. $ 20.00
100 - 249 Units........$ 19.00.$ 32.00.$ 11.00. $ 28.00. $ 30.00. $ 21.00
250 - 499 Units........$ 20.00.$ 34.00.$ 11.00. $ 27.00. $ 30.00. $ 21.00
500 - 999 Units........$ 20.00.$ 35.00.$ 12.00. $ 30.00. $ 32.00. $ 23.00
1,000 - 1,499 Units....$ 20.00.$ 34.00.$ 12.00. $ 29.00. $ 29.00. $ 22.00
1,500 or more Units....$ 20.00.$ 34.00.$ 12.00. $ 29.00. $ 29.00. $ 22.00
</TABLE>

The increased concession or agency commission is a result of the discount
given to purchasers for quantity purchases. See "Public
Offering--General" . In addition to the concessions and agency commissions
described in the table, volume concessions or agency commissions of an
additional $5.00 per Unit of an IM-IT, a U.S. Territorial IM-IT, a Long-Term
State or a National Quality Trust and $2.00 per Unit of all other Trusts will
be given to any broker/dealer or agent (other than Underwriters) who purchases
from the Sponsor at least 250 Units of such Trust during the initial offering
period. These additional concessions will be allowed at the time of purchase,
provided, however, the additional concession applicable to initial purchases
totaling less than 250 Units will be paid retroactively at the end of the
initial offering period. The breakpoint concessions or agency commissions are
also applied on a dollar basis utilizing a breakpoint equivalent of $1,000 per
Unit and will be applied on whichever basis is more favorable to the
distributor. The breakpoints will be adjusted to take into consideration
purchase orders stated in dollars which cannot be completely fulfilled due to
the requirement that only whole Units be issued. Certain commercial banks may
be making Units available to their customers on an agency basis. A portion of
the sales charge paid by these customers (equal to the agency commission
referred to above) is retained by or remitted to the banks. Any discount
provided to investors will be borne by the selling dealer or agent. For
secondary market transactions, the concession or agency commission will amount
to 70% of the applicable sales charge. The Sponsor reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of the concession or agency commission to dealers and others from
time to time.

Sponsor and Underwriter Compensation. The Underwriters will receive a gross
sales commission equal to the sales charge applicable to the transaction
involved. "Public Offering--General" . The Sponsor will receive from
the Underwriters the excess of this gross sales commission over the amounts
set forth in the following table, as of the Date of Deposit. For a list of the
Underwriters that have purchased Units from the Sponsor, see "
Underwriting" in Prospectus Part I.

<TABLE>
<CAPTION>
IM-IT, U.S.
Territorial
IM-IT, State
Long- Term IM-IT
IM-IT State and IM-IT Short IM-IT Limited Intermediate
Discount National Intermediate Maturity Maturity Laddered
Trust Quality Intermediate Trust Trust Trust
- ----------------------- -------- ---------- ---------------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
1 - 99 Units...........$ 20.00.$ 35.00.$ 12.00. $ 27.00. $ 29.00.$ 22.00
100 - 249 Units........$ 21.00.$ 37.00.$ 13.00. $ 30.00. $ 32.00.$ 23.00
250 - 499 Units........$ 22.00.$ 39.00.$ 13.50. $ 29.50. $ 32.00.$ 23.00
500 - 999 Units........$ 22.00.$ 40.00.$ 14.00. $ 32.50. $ 34.50.$ 25.00
1,000 - 1,499 Units....$ 22.00.$ 39.00.$ 14.00. $ 31.00. $ 31.00.$ 24.00
1,500 or more Units....$ 22.00.$ 39.00.$ 14.00. $ 31.00. $ 31.00.$ 24.00
</TABLE>

A. G. Edwards & Sons, Inc. which acts as a Managing Underwriter of Units of
the various series of the IM-IT or National Quality Trust, will receive from
the Sponsor reimbursement for certain costs and further compensation in the
amount of $5.00 for each Unit of the IM-IT or National Quality Trust it
underwrites. In addition, the Sponsor will receive from the Managing
Underwriters of any National Quality, (who underwrite 15% of the Trust
involved or 1,000 Units of such Trust, whichever is greater) the excess of
such gross sales commission over $38.00 per Unit of any such Trust, as of the
Date of Deposit. Also, any such Managing Underwriter that sells a total of 25%
or 1,500 Units, whichever is greater, of any individual series of such Trusts
will receive an additional $2.00 per each such Unit. In connection with
quantity sales to purchasers of any Pennsylvania IM-IT Trust the Underwriters
will receive from the Sponsor commissions totalling $35.00 per Unit for any
single transaction of 100 to 249 Units, $36.00 per Unit for any single
transaction of 250 to 499 units, $37.00 per Unit for any single transaction of
500 to 999 Units and $38.00 per Unit for any single transaction of 1,000 or
more Units. In addition, any Underwriter that sells a total of 25% or 1,500
Units, whichever is greater, of any Pennsylvania IM-IT Trust will receive an
additional $2.00 per each such Unit. In addition, the Sponsor has entered into
agreements with Advest, Inc. ("Advest" ) and Gruntal & Co., Inc. ("
Gruntal" ) whereby Advest and Gruntal will receive an additional $2.00 per
Unit in connection with a minimum commitment of 1,500 Units of any New York
IM-IT Trust. In addition, the Sponsor and J. J. B. Hilliard, W. L. Lyons, Inc.
("Hilliard, Lyons" ) have entered into an agreement under which
Hilliard, Lyons may receive an additional $2.00 for each Unit of the Kentucky
Quality Trust which it underwrites, provided it underwrites a minimum of 400
Units of such Trust. Further, each Underwriter who underwrites 1,000 or more
Units in any Trust will receive additional compensation from the Sponsor of
$1.00 for each Unit it underwrites. The breakpoints listed herein will also be
applied on a dollar basis utilizing a breakpoint equivalent of $1,000 per Unit
and will be applied on whichever basis is more favorable to the Underwriter.

In addition, the Sponsor and certain Underwriters will realize a profit or
loss, as a result of the difference between the price paid for the Bonds by
the Sponsor and the cost of the Bonds to a Trust. See "Portfolio" and
"Notes to Portfolio" in Prospectus Part I. Underwriters may also
realize profits or losses with respect to Bonds which were acquired by the
Sponsor from underwriting syndicates of which they were members. The Sponsor
has not participated as sole underwriter or as manager or as a member of the
underwriting syndicates from which the Bonds in the Trusts were acquired.
Underwriters may further realize profit or loss during the initial offering
period as a result of possible fluctuations in the market value of the Bonds
since all proceeds received from purchasers of Units (excluding dealer
concessions or agency commissions allowed, if any) will be retained by the
Underwriters. Affiliates of an Underwriter are entitled to the same dealer
concessions or agency commissions that are available to the Underwriter. In
addition to any other benefits Underwriters may realize from the sale of
Units, the Sponsor will share on a pro rata basis among senior Underwriters
(those who underwrite at least 250 Units) 50% of any gain (less deductions for
accrued interest and certain costs) represented by the difference between the
cost of the Bonds to the Sponsor and the evaluation of the Bonds on the Date
of Deposit. The Sponsor and certain of the other Underwriters will also
realize profits or losses in the amount of any difference between the price at
which Units are purchased and the price at which Units are resold in
connection with maintaining a secondary market for Units and will also realize
profits or losses resulting from a redemption of repurchased Units at a price
above or below the purchase price.

Underwriters and broker-dealers of the Trusts, banks and/or others are
eligible to participate in a program in which such firms receive from the
Sponsor a nominal award for each of their representatives who have sold a
minimum number of units of unit investment trusts created by the Sponsor
during a specified time period. In addition, at various times the Sponsor may
implement other programs under which the sales forces of such firms may be
eligible to win other nominal awards for certain sales efforts, or under which
the Sponsor will reallow to any such firms that sponsor sales contests or
recognition programs conforming to criteria established by the Sponsor, or
participate in sales programs sponsored by the Sponsor, an amount not
exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor
in its discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying firms for certain services
or activities which are primarily intended to result in sales of Units of the
Trusts. Such payments are made by the Sponsor out of its own assets, and not
out of the assets of the Trusts. These programs will not change the price
Unitholders pay for their Units or the amount that the Trusts will receive
from the Units sold. Approximately every eighteen months the Sponsor holds a
business seminar which is open to Underwriters that sell units of trusts it
sponsors. The Sponsor pays substantially all costs associated with the
seminar, excluding Underwriter travel costs. Each Underwriter is invited to
send a certain number of representatives based on the gross number of units
such firm underwrites during a designated time period.

Market for Units. Although not obligated to do so, the Sponsor intends to, and
certain of the other Underwriters may, maintain a market for Units and offer
to purchase Units at prices, subject to change at any time, based upon the
aggregate bid prices of the Bonds plus accrued interest and any principal cash
on hand, less any amounts representing taxes or other governmental charges
payable out of the Trust and less any accrued Trust expenses. If the supply of
Units exceeds demand or if some other business reason warrants it, the Sponsor
and/or the Underwriters may either discontinue all purchases of Units or
discontinue purchases of Units at these prices. If a market is not maintained
and the Unitholder cannot find another purchaser, a Unitholder will be able to
dispose of Units by tendering them to the Trustee for redemption at the
Redemption Price. See "Rights of Unitholders--Redemption of Units" . A
Unitholder who wishes to dispose of his Units should inquire of his broker as
to current market prices in order to determine whether there is in any price
in excess of the Redemption Price and, if so, the amount thereof. The Trustee
will notify the Sponsor of any tender of Units for redemption. If the
Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price per Unit, it may purchase the Units not later than the day on
which the Units would otherwise have been redeemed by the Trustee.

RIGHTS OF UNITHOLDERS

- --------------------------------------------------------------------------
Distributions of Interest and Principal. Interest received by a Trust, pro
rated on an annual basis, will be distributed monthly unless a Unitholder
elects to receive semi-annual distributions. The amount and time of the first
distribution is described in Prospectus Part I under "Summary of Essential
Financial Information" . The plan of distribution selected by a Unitholder
will remain in effect until changed. Unitholders who purchase Units in the
secondary market will receive distributions in accordance with the election of
the prior owner. Unitholders may change their distribution plan by indicating
the change on a card which may be obtained from the Trustee and return the
card to the Trustee with their certificates and other documentation required
by the Trustee. Certificates should be sent by registered or certified mail to
avoid their being lost or stolen. If the card and certificate are properly
presented to the Trustee, the change will become effective on the first day
after the next semi-annual record date and will remain effective until
changed.

Interest received by a Trust, including that part of the proceeds of any
disposition of Bonds which represents accrued interest, is credited by the
Trustee to the Interest Account. Other receipts are credited to the Principal
Account. After deduction of amounts sufficient to reimburse the Trustee,
without interest, for any amounts advanced and paid to the Sponsor as the
Unitholder of record as of the First Settlement Date, interest received will
be distributed on each distribution date to Unitholders of record as of the
preceding record date. All distributions will be net of estimated expenses.
Funds in the Principal Account will be distributed on each semi-annual
distribution date to Unitholders of record as of the preceding semi-annual
record date. The Trustee is not required to pay interest on funds held in the
Principal or Interest Account (but may itself earn interest thereon and
therefore benefits from the use of these funds) nor to make a distribution
from the Principal Account unless the amount available for distribution
therein shall equal at least $1.00 per Unit. However, should the amount
available for distribution in the Principal Account equal or exceed $10.00 per
Unit, the Trustee will make a special distribution from the Principal Account
on the next monthly distribution date to Unitholders of record on the related
monthly record date.

Because interest payments are not received by a Trust at a constant rate
throughout the year, interest distributions may be more or less than the
amount credited to the Interest Account as of the record date. For the purpose
of minimizing fluctuations in interest distributions, the Trustee is
authorized to advance amounts necessary to provide interest distributions of
approximately equal amounts. The Trustee is reimbursed for these advances from
funds in the Interest Account on the next record date. Persons who purchase
Units between a record date and a distribution date will receive their first
distribution on the second distribution date after the purchase, under the
applicable plan of distribution.

Reinvestment Option. Unitholders of may elect to have distributions on their
Units automatically reinvested in Class A shares of certain Van Kampen
American Capital or Morgan Stanley mutual funds which are registered in the
Unitholder's state of residence (the "Reinvestment Funds" ). Each
Reinvestment Fund has investment objectives and that differ from those of the
Trusts. The prospectus relating to each Reinvestment Fund describes its
investment policies and the procedures to follow to begin reinvestment. A
Unitholder may obtain a prospectus for the Reinvestment Funds from Van Kampen
American Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181.

After becoming a participant in a reinvestment plan, each Trust distribution
will automatically be applied on the applicable distribution date to purchase
shares of the applicable Reinvestment Fund at a net asset value computed on
such date. Unitholders with an existing Guaranteed Reinvestment Option (GRO)
Program account (whereby a sales charge is imposed on distribution
reinvestments) may transfer their existing account into a new GRO account
which allows purchases of Reinvestment Fund shares at net asset value.
Confirmations of all reinvestments will be mailed to the Unitholder by the
Reinvestment Fund. A participant may elect to terminate his or her
reinvestment plan and receive future distributions in cash by notifying the
Trustee in writing at least five days before the next distribution date. Each
Reinvestment Fund, its sponsor and investment adviser shall have the right to
terminate its reinvestment plan at any time. Unitholders of New York Trusts
who are New York residents may elect to have distributions reinvested in
shares of First Investors New York Insured Tax Free Fund, Inc. subject to a
sales charge of $1.50 per $100 reinvested (paid to First Investors Management
Company, Inc.).

Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee, at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286, of the certificates representing
the Units to be redeemed, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates) and by payment
of applicable governmental charges, if any. Redemption of Units cannot occur
until certificates representing the Units or satisfactory indemnity have been
received by the Trustee. No later than seven calendar days following the
tender, the Unitholder will receive an amount for each Unit equal to the
Redemption Price per Unit next computed after receipt by the Trustee of the
tender of Units. The "date of tender" is deemed to be the date on
which Units are received by the Trustee, except that as regards Units received
after the Evaluation Time on days of trading on the New York Stock Exchange,
the date of tender is the next day on which that Exchange is open and the
Units will be deemed to have been tendered to the Trustee on that day for
redemption at the Redemption Price.

Under Internal Revenue Service regulations, the Trustee is required to
withhold a specified percentage of a Unit redemption if the Trustee has not
received the Unitholder's tax identification number as required by such
regulations. Any amount withheld is transmitted to the Internal Revenue
Service and may be recovered by the Unitholder only when filing a return.
Under normal circumstances the Trustee obtains the Unitholder's tax
identification number from the selling broker. However, at any time a
Unitholder elects to tender Units for redemption, the Unitholder should
provide a tax identification number to the Trustee in order to avoid this
possible "back-up withholding" .

The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the bid price of the Bonds as of the
Evaluation Time on days of trading on the New York Stock Exchange on the date
any such determination is made. The Evaluator determines the Redemption Price
per Unit on days Units are tendered for redemption. The Redemption Price per
Unit is the pro rata share of each Unit on the basis of (i) the cash on hand
in the Trust or moneys in the process of being collected, (ii) the value of
the Bonds based on the bid prices of the Bonds, except for cases in which the
value of insurance has been included, (iii) accrued interest, less (a) amounts
representing taxes or other governmental charges and (b) the accrued Trust
expenses. The Evaluator may determine the value of the Bonds by employing any
of the methods set forth in "Public Offering--Offering Price" . In
determining the Redemption Price per Unit no value will be assigned to the
portfolio insurance maintained on the Bonds in an Insured Trust unless the
Bonds are in default in payment of principal or interest or in significant
risk of default. For a description of the situations in which the Evaluator
may value the insurance obtained by the Insured Trusts, see "Public
Offering--Offering Price" . Accrued interest paid on redemption shall be
withdrawn from the Interest Account or, if the balance therein is
insufficient, from the Principal Account. All other amounts will be withdrawn
from the Principal Account. Units so redeemed shall be cancelled.

The price at which Units may be redeemed could be less than the price paid by
the Unitholder and may be less than the par value of the Bonds represented by
the Units redeemed. The Trustee may sell Bonds to cover redemptions. When
Bonds are sold, the size and diversity of the Trust will be reduced. Sales may
be required at a time when Bonds would not otherwise be sold and might result
in lower prices than might otherwise be realized.

The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or during which the SEC determines that trading
on that Exchange is restricted or an emergency exists, as a result of which
disposal or evaluation of the Bonds is not reasonably practicable, or for
other periods as the SEC may by order permit. Under certain extreme
circumstances the Sponsor may apply to the SEC for an order permitting a full
or partial suspension of the right of Unitholders to redeem their Units.

Certificates. Ownership of Units is evidenced by certificates unless a
Unitholder makes a written request to the Trustee that ownership be in book
entry form. Units are transferable by making a written request to the Trustee
and, in the case of Units in certificate form, by presentation and surrender
of the certificate to the Trustee properly endorsed or accompanied by a
written instrument or instruments of transfer. A Unitholder must sign the
written request, or certificate transfer instrument, exactly as his name
appears on the records of the Trustee and on the face of any certificate with
the signature guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP" ) or a signature guaranty program accepted
by the Trustee. The Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any multiple thereof. Although no such
charge is now made, the Trustee may require a Unitholder to pay a reasonable
fee for each certificate re-issued or transferred and to pay any governmental
charge that may be imposed in connection with each transfer or interchange.
Destroyed, stolen, mutilated or lost certificates will be replaced upon
delivery to the Trustee of satisfactory indemnity, evidence of ownership and
payment of expenses incurred. Mutilated certificates must be surrendered to
the Trustee for replacement.

Reports Provided. Unitholders will receive a statement of interest and other
receipts received for each distribution. For as long as the Sponsor deems it
to be in the best interests of Unitholders, the accounts of each Trust will be
audited annually by independent certified public accountants and the report of
the accountants will be furnished to Unitholders upon request. Within a
reasonable period of time after the end of each year, the Trustee will furnish
to each person who was a registered Unitholder during that year a statement
describing the interest and principal received on the Bonds, actual Trust
distributions, Trust expenses, a list of the Bonds and other Trust
information. Unitholders will be furnished, the Evaluator's evaluations of the
Bonds upon request.

INSURANCE ON THE BONDS IN THE INSURED TRUSTS

- --------------------------------------------------------------------------
Insurance has been obtained guaranteeing prompt payment of interest and
principal, when due, in respect of the Bonds in each Insured Trust. An
insurance policy obtained by an Insured Trust, if any, is non-cancellable and
will continue in force so long as the Trust is in existence, the respective
Portfolio Insurer is still in business and the Bonds described in the policy
continue to be held by the Trust. Any portfolio insurance premium for an
Insured Trust is paid by the Trust on a monthly basis. The premium for any
Preinsured Bond insurance has been paid by the issuer, by a prior owner of the
Bonds or the Sponsor and any policy is non-cancellable and will continue in
force so long as the Bonds so insured are outstanding and the Preinsured Bond
Insurer remains in business. The Portfolio Insurers and the Preinsured Bond
Insurers are described in "Portfolio" and the notes thereto in
Prospectus Part I. The Portfolio Insurers are either AMBAC Assurance
Corporation or Financial Guaranty Insurance Company. More detailed information
regarding insurance on the Bonds and the Preinsured Bond and Portfolio
Insurers is included in the Information Supplement. See "Additional
Information" .

The portfolio insurance obtained by an Insured Trust, if any, guarantees the
timely payment of principal and interest on the Bonds when they fall due. For
this purpose, "when due" generally means the stated payment or
maturity date for the payment of principal and interest. However, in the event
(a) an issuer defaults in the payment of principal or interest, (b) an issuer
enters into a bankruptcy proceeding or (c) the maturity of the Bond is
accelerated, the affected Portfolio Insurer has the option to pay the
outstanding principal amount of the Bond plus accrued interest to the date of
payment and thereby retire the Bond from the Trust prior to the Bond's stated
maturity date. The insurance does not guarantee the market value of the Bonds
or the value of the Units. The Trustee, upon the sale of a Bond covered under
a portfolio insurance policy has the right to obtain permanent insurance with
respect to the Bond (i.e., insurance to maturity of the Bond regardless of the
identity of the holder) (the "Permanent Insurance" ) upon the payment
of a single predetermined insurance premium and expenses from the proceeds of
the sale of the Bond. It is expected that the Trustee would exercise the right
to obtain Permanent Insurance only if upon exercise the Trust would receive
net proceeds in excess of the sale proceeds if the Bonds were sold on an
uninsured basis.

The following summary information relating to the listed insurance companies
has been obtained from publicly available information:

<TABLE>
<CAPTION>
Financial
Information (in
millions of dollars)
------------------------------
<S> <C> <C>
Admitted Policyholders'
Name Assets Surplus
- ------------------------------------------------------ ---------- -------------------
AMBAC Indemnity Corporation (at 12/31/96)............. $2,585 $ 899
Capital Markets Assurance Corporation (at 12/31/96)... 321 194
Financial Guaranty Insurance Company (at 3/31/97)..... 2,447 1,124
Financial Bond Assurance, Inc. (at 12/31/96).......... 1,155 449
MBIA Insurance Corporation (at 3/31/97 unaudited)..... 4,500 1,500
</TABLE>

Because the Bonds are insured by Portfolio Insurers or Preinsured Bond
Insurers as to the timely payment of principal and interest, when due, and on
the basis of the various reinsurance agreements in effect, Standard & Poor's
has assigned to the Units of each Insured Trust its "AAA" investment
rating. This rating will be in effect for a period of thirteen months from the
Date of Deposit and will, unless renewed, terminate at the end of such period.
See "Description of Ratings" in the Information Supplement. This
rating should not be construed as an approval of the offering of the Units by
Standard & Poor's or as a guarantee of the market value of the Trust or of the
Units.

Each Portfolio Insurer is subject to regulation by the department of insurance
in the state in which it is qualified to do business. Such regulation,
however, is no guarantee that each Portfolio Insurer will be able to perform
on its contract of insurance in the event a claim should be made. At the date
hereof, it is reported that no claims have been submitted or are expected to
be submitted to any of the Portfolio Insurers which would materially impair
the ability of any such company to meet its commitment pursuant to any
contract of insurance. The information relating to each Portfolio Insurer has
been furnished by such companies. The financial information with respect to
each Portfolio Insurer appears in reports filed with state insurance
regulatory authorities and is subject to audit and review by such authorities.
No representation is made herein as to the accuracy or adequacy of such
information or as to the absence of material adverse changes in such
information subsequent to the dates thereof.

FUND ADMINISTRATION

- --------------------------------------------------------------------------
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is a wholly owned
subsidiary of MSAM Holdings II, Inc., which in turn is a wholly owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD" ).

MSDWD is a global financial services firm with a market capitalization of more
than $21 billion, which was created by the merger of Morgan Stanley Group Inc.
with Dean Witter, Discover & Co. on May 31, 1997. MSDWD, together with various
of its directly and indirectly owned subsidiaries, is engaged in a wide range
of financial services through three primary businesses: securities, asset
management and credit services. These principal businesses include securities
underwriting, distribution and trading; merger, acquisition, restructuring and
other corporate finance advisory activities; merchant banking; stock brokerage
and research services; asset management; trading of futures, options, foreign
exchange commodities and swaps (involving foreign exchange, commodities,
indices and interest rates); real estate advice, financing and investing;
global custody, securities clearance services and securities lending; and
credit card services. As of June 2, 1997, MSDWD, together with its affiliated
investment advisory companies, had approximately $270 billion of assets under
management, supervision or fiduciary advice.

Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Fund or to any other Series thereof. The information is included herein
only for the purpose of informing investors as to the financial responsibility
of the Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor upon
request.)

As of March 31, 1997, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $58.45 billion of investment
products, of which over $10.85 billion is invested in municipal bonds. The
Sponsor and its Van Kampen American Capital affiliates managed $47 billion of
assets, consisting of $29.23 billion for 59 open-end mutual funds (of which 46
are distributed by Van Kampen American Capital Distributors, Inc.) $13.4
billion for 37 closed-end funds and $4.97 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen American Capital's open-end funds,
closed-ended funds and unit investment trusts are professionally distributed
by leading financial firms nationwide. Based on cumulative assets deposited,
the Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.

If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and
not exceeding amounts prescribed by the Securities and Exchange Commission,
(ii) terminate the Trust Agreement and liquidate the Fund as provided therein
or (iii) continue to act as Trustee without terminating the Trust Agreement.

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 unit investment trust
division offices at 101 Barclay Street, New York, New York 10286, telephone
(800) 221-7668. 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.
Additional information regarding the Trustee is set forth in the Information
Supplement, including the Trustee's qualifications and duties, its ability to
resign, the effect of a merger involving the Trustee and the Sponsor's ability
to remove and replace the Trustee. See "Additional Information" .

Portfolio Administration. The Trusts are not managed funds and, except as
provided in the Trust Agreement, Bonds generally will not be sold or replaced.
The Sponsor may, however, direct that Bonds be sold in certain limited
situations to protect to the Trust based on advice from the Evaluator. These
situations may include default in interest or principal payments on the Bonds
or other obligations of an issuer, an advanced refunding or institution of
certain legal proceedings. In addition, the Trustee may sell Bonds designated
by the Evaluator for purposes of redeeming Units or payment of expenses. The
Evaluator will consider a variety of factors in designating Bonds to be sold
including interest rates, market value and marketability. Except in limited
circumstances, the Trustee must reject any offer by an issuer to issue bonds
in exchange or substitution for the Bonds (such as a refunding or refinancing
plan). The Trustee will promptly notify Unitholders of any exchange or
substitution. The Information Supplement contains a more detailed description
of circumstances in which Bonds may be sold or replaced. See "Additional
Information" .

Replacement Bonds. No assurance can be given that a Trust will retain its
present size or composition because Bonds may be sold, redeemed or mature from
time to time and the proceeds will be distributed to Unitholders and will not
be reinvested. In the event of a failure to deliver any Bond that has been
purchased under a contract ("Failed Bonds" ), the Sponsor is authorized
under the Trust Agreement to direct the Trustee to acquire other bonds ("
Replacement Bonds" ) to make up the original portfolio of a Trust.
Replacement Bonds must be purchased within 20 days after delivery of the
notice of the failed contract and the purchase price (exclusive of accrued
interest) may not exceed the amount of funds reserved for the purchase of the
Failed Bonds. The Replacement Bonds must be substantially identical to the
Failed Bonds in terms of (i) the exemption from federal and state taxation,
(ii) maturity, (iii) yield to maturity and current return, (iv) Standard &
Poor's or Moody's ratings, and (v) insurance in an Insured Trust. The Trustee
shall notify all Unitholders of a Trust within five days after the acquisition
of a Replacement Bond and shall make a pro rata distribution of the amount, if
any, by which the cost of the Failed Bond exceeded the cost of the Replacement
Bond plus accrued interest. If Failed Bonds are not replaced, the Sponsor will
refund the sales charge attributable to the Failed Bonds to all Unitholders of
the Trust and distribute the principal and accrued interest (at the coupon
rate of the Failed Bonds to the date of removal from the Trust) attributable
to the Failed Bonds within 30 days after removal. All interest paid to a
Unitholder which accrued after the expected date of settlement for Units will
be paid by the Sponsor and accordingly will not be treated as tax-exempt
income. If Failed Bonds are not replaced, the Estimated Net Annual Interest
Income per Unit would be reduced and the Estimated Current Return and
Estimated Long-Term Return might be lowered. Unitholders may not be able to
reinvest their proceeds in other securities at a yield equal to or in excess
of the yield of the Failed Bonds.

Amendment of Trust Agreement. The Sponsor and the Trustee may amend the Trust
Agreement without the consent of Unitholders to correct any provision which
may be defective or to make other provisions that will not adversely affect
the interest of the Unitholders (as determined in good faith by the Sponsor
and the Trustee). The Trust Agreement may not be amended to increase the
number of Units or to permit the acquisition of Bonds in addition to or in
substitution for any of the Bonds initially deposited in the Trust, except for
the substitution of certain refunding Bonds. The Trustee will notify
Unitholders of any amendment.

Termination of Trust Agreement. A Trust will upon the redemption, sale or
other disposition of the last Bond held in the Trust. A Trust may also be
terminated at any time by consent of Unitholders of 51% of the Units then
outstanding or by the Trustee when the value of the Trust is less than 20% of
the original principal amount of Bonds. The Trustee will notify each
Unitholder of any termination within a reasonable time and will then liquidate
any remaining Bonds. The sale of Bonds upon termination may result in a lower
amount than might otherwise be realized if sale were not required at that
time. For this reason, among others, the amount realized by a Unitholder upon
termination may be less than the principal amount of Bonds per Unit or value
at the time of purchase. The Trustee will distribute to each Unitholder his
share of the balance of the Interest and Principal Accounts after deduction of
costs, expenses or indemnities. The Unitholder will receive a final
distribution statement with this distribution. When the Trustee in its sole
discretion determines that any amounts held in reserve are no longer
necessary, it will distribute these amounts to Unitholders. The Information
Supplement contains further information regarding termination of a Trust. See
"Additional Information" .

Limitation on Liabilities. The Sponsor, Evaluator and Trustee shall be under
no liability to Unitholders for taking any action or for refraining from
taking any action in good faith pursuant to the Trust Agreement, or for errors
in judgment, but shall be liable only for their own willful misfeasance, bad
faith or gross negligence (negligence in the case of the Trustee) in the
performance of their duties or by reason of their reckless disregard of their
obligations and duties hereunder. The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee of any of
the Bonds. In the event of the failure of the Sponsor to act under the Trust
Agreement, the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Trust Agreement. The Trustee is not
liable for any taxes or governmental charges imposed on the Bonds, on it as
Trustee under the Trust Agreement or on the Fund which the Trustee may be
required to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction. In addition, the
Trust Agreement contains other customary provisions limiting the liability of
the Trustee. The Trustee and Sponsor may rely on any evaluation furnished by
the Evaluator and have no responsibility for the accuracy thereof.
Determinations 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, Sponsor or Unitholders for errors
in judgment.

FEDERAL TAX STATUS

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At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exclusion of interest thereon from Federal gross
income were rendered by bond counsel to the respective issuing authorities. In
addition, with respect to State Trusts, where applicable, 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 certain state or local intangibles and
local income taxes. Neither the Sponsor nor Chapman and Cutler have made any
review of the Trust proceedings relating to the issuance of the Bonds or of
the basis of such opinions. If the interest on a Bond should be determined to
be taxable, the Bond would generally have to be sold at a substantial
discount. In addition, investors could be required to pay income tax on
interest received prior to the date on which interest is determined to be
taxable. Gain realized on the sale or redemption of the Bonds by the Trustee
or of a Unit by a Unitholder is includible in gross income for Federal income
tax purposes and may be includible in gross income for state tax purposes.
Such gain does not include any amounts received in respect of accrued interest
or accrued original issue discount, if any. If a Bond is acquired with accrued
interest, that portion of the price paid for the accrued interest is added to
the tax basis of the Bond. When this accrued interest is received, it is
treated as a return of capital and reduces the tax basis of the Bond. If a
Bond is purchased for a premium, the amount of the premium is added to the tax
basis of the Bond. Bond premium is amortized over the remaining term of the
Bond, and the tax basis of the Bond is reduced each tax year by the amount of
the premium amortized in that tax year. For purposes of the following
opinions, it is assumed that each asset of the Trust is debt, the interest on
which is excluded for Federal income tax purposes.

In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law as of the date of this Prospectus:

(1)Each Trust is not an association taxable as a corporation for Federal
income tax purposes and interest and accrued original issue discount on Bonds
which is excludable from gross income under the Internal Revenue Code of 1986
(the "Code" ) will retain its status for Federal income tax purposes,
when received by a Trust and when distributed to Unitholders; however such
interest may be taken into account in computing the alternative minimum tax,
an additional tax on branches of foreign corporations and the environmental
tax (the "Superfund Tax" ), as noted below;

(2)Each Unitholder is considered to be the owner of a pro rata portion of each
asset of the respective 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. If the Unitholder disposes of
a Unit, he is deemed thereby to have disposed of his entire pro rata interest
in all assets of the Trust involved including his pro rata portion of all the
Bonds represented by a Unit. Legislative proposals have been made that would
treat certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain as constructive sales for purposes of recognition of
gain (but not loss). Unitholders should consult their own tax advisors with
regard to any such constructive sale rules. Unitholders must reduce the tax
basis of their Units for their share of accrued interest received by the
respective Trust, if any, on Bonds delivered after the Unitholders pay for
their Units to the extent that such interest accrued on such Bonds before the
date the Trust acquired ownership of the Bonds (and the amount of this
reduction may exceed the amount of accrued interest paid to the seller) and,
consequently, such Unitholders may have an increase in taxable gain or
reduction in capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing the proceeds of
such sale or redemption with the adjusted basis of the Units. If the Trustee
disposes of Bonds (whether by sale, payment on maturity, redemption or
otherwise), gain or loss is recognized to the Unitholder (subject to various
non-recognition provisions of the Code). The amount of any such gain or loss
is measured by comparing the Unitholder's pro rata share of the total proceeds
from such disposition with the Unitholder's basis for his or her fractional
interest in the asset disposed of. In the case of a Unitholder who purchases
Units, such basis (before adjustment for accrued original issue discount and
amortized bond premium, if any) is determined by apportioning the cost of the
Units among each of the Trust assets ratably according to value as of the
valuation date nearest the date of acquisition of the Units. It should be
noted that certain legislative proposals have been made which could affect the
calculation of basis for Unitholders holding securities that are substantially
identical to the Bonds. Unitholders should consult their own tax advisors with
regard to the calculation of basis. The tax basis reduction requirements of
the Code relating to amortization of bond premium may, under some
circumstances, result in the Unitholder realizing a taxable gain when his
Units are sold or redeemed for an amount less than or equal to his original
cost;

(3)Any proceeds paid under an insurance policy or policies dated the Date of
Deposit, issued to an Insured Trust by AMBAC Indemnity, Financial Guaranty or
a combination thereof with respect to the Bonds which represent maturing
interest on defaulted obligations held by the Trustee will be excludable from
Federal gross income if, and to the same extent as, such interest would have
been so excludable if paid in the normal course by the issuer of the defaulted
obligations 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; and

(4)Any proceeds paid under individual policies obtained by issuers of Bonds
which represent maturing interest on defaulted Bonds held by the Trustee will
be excludable from Federal gross income if, and to the same extent as, such
interest would have been excludable if paid in the normal course by the issuer
of the defaulted Bonds provided that, at the time such policies are purchased,
the amounts paid for such policies are reasonable, customary and consistent
with the reasonable expectation that the issuer of the Bonds, rather than the
insurer, will pay debt service on the Bonds.

Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original
issue discount accrues either on the basis of a constant compound interest
rate or ratably over the term of the Bond, depending on the date the Bond was
issued. In addition, special rules apply if the purchase price of a Bond
exceeds the original issue price plus the amount of original issue discount
which would have previously accrued based upon its issue price (its "
adjusted issue price" ) to prior owners. If a Bond is acquired with accrued
interest, that portion of the price paid for the accrued interest is added to
the tax basis of the Bond. When this accrued interest is received, it is
treated as a return of capital and reduces the tax basis of the Bond. If a
Bond is purchased for a premium, the amount of the premium is added to the tax
basis of the Bond. Bond premium is amortized over the remaining term of the
Bond, and the tax basis of the Bond is reduced each tax year by the amount of
the premium amortized in that tax year. The application of these rules will
also vary depending on the value of the 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 Bonds or the price a Unitholder pays for his or her Units.
Under the Tax Act, accretion of market discount is taxable as ordinary income;
under prior law the accretion had been treated as capital gain. Market
discount that accretes while a Trust holds a Bond would be recognized as
ordinary income by the Unitholders when principal payments are received on the
Bond, upon sale or at redemption (including early redemption), or upon the
sale or redemption of his or her Units, unless a Unitholder elects to include
market discount in taxable income as it accrues. The market discount rules are
complex and Unitholders should consult their tax advisers regarding these
rules and their application.

In the case of certain corporations, the alternative minimum tax and the
Superfund Tax for taxable years beginning after December 31, 1986 depends 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 the Fund. Under current Code provisions, the
Superfund Tax does not apply to tax years beginning on or after January 1,
1996. Legislative proposals have been introduced which would extend the
Superfund Tax. Under the provisions of Section 884 of the Code, a branch
profits tax is levied on the "effectively connected earnings and
profits" of certain foreign corporations which include tax-exempt interest
such as interest on the Bonds in the Trust. Unitholders should consult their
tax advisers with respect to the particular tax consequences to them including
the corporate alternative minimum tax, the Superfund Tax and the branch
profits tax imposed by Section 884 of the Code.

Counsel for the Sponsor has also advised that under Section 265 of the Code,
interest on indebtedness incurred or continued to purchase or carry Units of a
Trust is not deductible for Federal income tax purposes. The Internal Revenue
Service has taken the position that such indebtedness need not be directly
traceable to the purchase or carrying of Units (however, these rules generally
do not apply to interest paid on indebtedness incurred to purchase or improve
a personal residence). Also, under Section 265 of the Code, certain financial
institutions that acquire Units would generally not be able to deduct any of
the interest expense attributable to ownership of such Units. Legislative
proposals have been made that would extend the financial institution rules to
all corporations. Investors with questions regarding these issues should
consult their tax advisers.

In the case of certain of the Bonds in the Fund, the opinions of bond counsel
indicate that interest on such Bonds received by a "substantial user"
of the facilities being financed with the proceeds of these Bonds, or persons
related thereto, for periods while such Bonds are held by such a user or
related person, will not be excludible from Federal gross income, although
interest on such Bonds received by others would be excludible from Federal
gross income. "Substantial user" and "related person" are
defined under the Code and U.S. Treasury Regulations. Any person who believes
that he or she may be a "substantial user" or a "related
person" as so defined should contact his or her tax adviser.

In the opinion of special counsel to the Fund for New York tax matters, under
existing law, the Fund and each Trust are not associations taxable as
corporations and the income of each Trust will be treated as the income of the
Unitholders under the income tax laws of the State and City of New York.

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
Fund of the proceedings relating to the issuance of the Bonds or of the basis
for such opinions.

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 (which are defined as net long-term capital
gain over net short-term capital loss for a taxable year) 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. For
purposes of computing the alternative minimum tax for individuals and
corporations and the Superfund Tax for corporations, interest on certain
private activity bonds (which includes most industrial and housing revenue
bonds) issued on or after August 8, 1996 is included as an item of tax
preference. Except as otherwise noted in Prospectus Part I, the Trusts do not
include any such private activity bonds issued on or after that date.

Section 86 of the Code provides that 50% of Social Security benefits are
includible in gross income to the extent that the sum of "modified
adjusted gross income" plus 50% of the Social Security benefits received
exceeds a "base amount" . The base amount is $25,000 for unmarried
taxpayers, $32,000 for married taxpayers filing a joint return and zero for
married taxpayers who do not live apart at all times during the taxable year
and who file separate returns. Modified adjusted gross income is adjusted
gross income determined without regard to certain otherwise allowable
deductions and exclusions from gross income and by including tax-exempt
interest. To the extent that Social Security benefits are includible in gross
income, they will be treated as any other item of gross income.

In addition, under the Tax Act, for taxable years beginning after December 31,
1993, up to 85% of Social Security benefits are includible in gross income to
the extent that the sum of "modified adjusted gross income" plus 50%
of Social Security benefits received exceeds an "adjusted base amount."
The adjusted base amount is $34,000 for unmarried taxpayers, $44,000 for
married taxpayers filing a joint return, and zero for married taxpayers who do
not live apart at all times during the taxable year and who file separate
returns.

Although tax-exempt interest is included in modified adjusted gross income
solely for the purpose of determining what portion, if any, of Social Security
benefits will be included in gross income, no tax-exempt interest, including
that received from a Trust, will be subject to tax. A taxpayer whose adjusted
gross income already exceeds the base amount or the adjusted base amount must
include 50% or 85%, respectively, of his Social Security benefits in gross
income whether or not he receives any tax-exempt interest. A taxpayer whose
modified adjusted gross income (after inclusion of tax-exempt interest) does
not exceed the base amount need not include any Social Security benefits in
gross income.

Ownership of the Units may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, corporations
subject to either the environmental tax 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.

For a discussion of the state tax status of income earned on Units of a Trust
and recent changes in Federal tax law, see Prospectus Part I. Except as noted
therein, the exemption of interest on state and local obligations for Federal
income tax purposes discussed above does not necessarily result in exemption
under the income or other tax laws of any state or city. The laws of the
several states vary with respect to the taxation of such obligations.

EXPENSES

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The Sponsor will not receive any fees in connection with its activities
relating to the Fund. However, American Portfolio Evaluation Services, a
division of Van Kampen American Capital Investment Advisory Corp., which is an
affiliate of the Sponsor, will receive the annual supervisory fee indicated
under "Summary of Essential Financial Information" in Prospectus Part
I for providing portfolio supervisory services for the Fund. In addition, the
Evaluator will receive the annual evaluation fee indicated under "Summary
of Essential Financial Information" in Prospectus Part I for evaluating
each Trust's portfolio. These fees may exceed the actual costs of providing
these services for a Trust but the total amount received by the Evaluator for
providing these services to all Van Kampen American Capital unit investment
trusts will not exceed the total cost of providing the services in any
calendar year. For its services the Trustee will receive the fee indicated
under "Summary of Essential Financial Information" in Prospectus Part
I (which may be reduced as described therein). Part of the Trustee's
compensation for its services is expected to result from the use of the funds
being held in the Principal and Interest Accounts for future distributions,
payment of expenses and redemptions since these Accounts are non-interest
bearing to Unitholders. These fees are based on the outstanding principal
amount of Bonds and Units on the Date of Deposit for the first year and as of
the close of business on January 1 for each year thereafter.

Premiums for the portfolio insurance are obligations of each Insured Trust and
are payable monthly by the Trustee on behalf of the Trust. As Bonds in the
portfolio of an Insured Trust are redeemed by their respective issuers or are
sold by the Trustee, the amount of the premium will be reduced in respect of
those Bonds. If the Trustee exercises the right to obtain permanent insurance,
the premiums payable for such permanent insurance will be paid solely from the
proceeds of the sale of the related Bonds.

The following additional charges are or may be incurred by the Trusts: (a)
fees of the Trustee for extraordinary services, (b) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (c) various governmental charges, (d) expenses and costs of any
action taken by the Trustee to protect the Trusts and the rights and interests
of Unitholders, (e) indemnification of the Trustee for any loss, liability or
expenses incurred by it in the administration of the Fund without negligence,
bad faith or willful misconduct on its part, (f) any special custodial fees
payable in connection with the sale of any of the Bonds in a Trust, (g)
expenditures incurred in contacting Unitholders upon termination of the Trusts
and (h) costs incurred to reimburse the Trustee for advancing funds to the
Trusts to meet scheduled distributions (which costs may be adjusted
periodically in response to fluctuations in short-term interest rates). The
fees and expenses set forth herein are payable out of the Trusts. When such
fees and expenses are paid by or owing to the Trustee, they are secured by a
lien on the portfolio of the applicable Trust. If the balances in the Interest
and Principal Accounts are insufficient to provide for amounts payable by a
Trust, the Trustee has the power to sell Bonds to pay such amounts.

On or before the twenty-fifth day of each month, the Trustee will deduct from
the Interest Account and, to the extent funds are not sufficient therein, from
the Principal Account, amounts necessary to pay the expenses of the Fund. The
Trustee also may withdraw from these Accounts such amounts, if any, as it
deems necessary to establish a reserve for any governmental charges payable
out of the Fund. Amounts so withdrawn shall not be considered a part of the
Fund's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate Accounts. All costs and expenses incurred in
creating and establishing the Fund, including the cost of the initial
preparation, printing and execution of the Trust Agreement and the
certificates, legal and accounting expenses, advertising and selling expenses,
expenses of the Trustee, initial evaluation fees and other out-of-pocket
expenses have been borne by the Sponsor at no cost to the Fund.

ADDITIONAL INFORMATION

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This Prospectus does not contain all the information set forth in the
Registration Statement filed by the Fund with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Bonds, investment risks and general information
about the Fund. This Prospectus incorporates by reference the entire
Information Supplement. The Information Supplement may be obtained by
contacting the Trustee or is available along with other related materials at
the SEC's Internet site (http://www.sec.gov).

OTHER MATTERS

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Legal Matters. The legality of the Units offered hereby and certain matters
relating to Federal tax law have been passed upon by Chapman and Cutler, 111
West Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Special counsel to the Fund for certain state tax matters are named under "
Tax Status" appearing in Prospectus Part I.

Independent Certified Public Accountants. The statement of condition and the
related portfolio at the Date of Deposit included in Prospectus Part I have
been audited by Grant Thornton LLP, independent certified public accountants,
as set forth in their report in Prospectus Part I, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Title Page
<S> <C>
The Trusts 2
The Fund 2
Objectives and Bond Selection 2
Risk Factors 3
Estimated Current and Long-Term Returns 5
Public Offering 5
General 5
Offering Price 7
Accrued Interest 8
Unit Distribution 8
Sponsor and Underwriter Compensation 9
Market for Units 10
Rights of Unitholders 11
Distributions of Interest and Principal 11
Reinvestment Option 11
Redemption of Units 12
Certificates 12
Reports Provided 13
Insurance on the Bonds in the Insured Trusts 13
Fund Administration 14
Sponsor 14
Trustee 15
Portfolio Administration 15
Replacement Bonds 15
Amendment of Trust Agreement 15
Termination of Trust Agreement 15
Limitation on Liabilities 16
Federal Tax Status 16
Expenses 19
Additional Information 20
Other Matters 20
Legal Matters 20
Independent Certified Public Accountants 20
</TABLE>

No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Fund, the Sponsor or the Underwriters. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any state
to any person to whom it is not lawful to make such offer in such state.

This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.

PROSPECTUS
PART II
_____ 1998

Insured Municipals Income Trust and Investors' Quality Tax-Exempt Trust,
Multi-Series

A Wealth of Knowledge A Knowledge of Wealth

VAN KAMPEN AMERICAN CAPITAL

One Parkview Plaza
Oakbrook Terrace, Illinois 60181

2800 Post Oak Boulevard
Houston, Texas 77056
Van Kampen American Capital

Information Supplement

Insured Municipals Income Trust and Investors' Quality Tax-Exempt Trust,
Multi-Series 300

This Information Supplement provides additional information concerning the
risks and operations of the Fund which is not described in the Prospectus for
the Fund. This Information Supplement should be read in conjunction with the
Fund's prospectus. This Information Supplement is not a prospectus (but is
incorporated into the Prospectus by reference), does not include all of the
information that an investor should consider before investing in a Trust and
may not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181 or by contacting your broker. This
Information Supplement is dated as of the date of Prospectus Part I and all
capitalized terms have been defined in the Prospectus.

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
Municipal Bond Risk Factors
Insurance on the Bonds in the Insured Trusts
Portfolio Administration
Trustee Information
Termination of the Trust Agreement
Description of Ratings
Equivalent Taxable Estimated Current Return Table
California Risk Factors
Estimated Cash Flows to Unitholders
</TABLE>

Municipal Bond Risk Factors

The Trusts include certain types of bonds described below. Accordingly, an
investment in a Trust should be made with an understanding of the
characteristics of and risks associated with such bonds. The types of bonds
included in each Trust are described on the cover of the related Prospectus
Part I. Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Bonds.

Certain of the Bonds may be general obligations of a governmental entity that
are backed by the taxing power of such entity. All other Bonds in the 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 tax or
other specific revenue source. There are, of course, variations in the
security of the different Bonds in the Fund, both within a particular
classification and between classifications, depending on numerous factors.

Certain of the Bonds may be obligations which derive their payments from
mortgage loans. Certain of such housing bonds may be FHA insured or may be
single family mortgage revenue bonds issued for the purpose of acquiring from
originating financial institutions notes secured by mortgages on residences
located within the issuer's boundaries and owned by persons of low or moderate
income. Mortgage loans are generally partially or completely prepaid prior to
their final maturities as a result of events such as sale of the mortgaged
premises, default, condemnation or casualty loss. Because these bonds are
subject to extraordinary mandatory redemption in whole or in part from such
prepayments of mortgage loans, a substantial portion of such bonds will
probably be redeemed prior to their scheduled maturities or even prior to
their ordinary call dates. Extraordinary mandatory redemption without premium
could also result from the failure of the originating financial institutions
to make mortgage loans in sufficient amounts within a specified time period.
Additionally, unusually high rates of default on the underlying mortgage loans
may reduce revenues available for the payment of principal of or interest on
such mortgage revenue bonds. These bonds were issued under Section 103A of the
Internal Revenue Code, which Section contains certain requirements relating to
the use of the proceeds of such bonds in order for the interest on such bonds
to retain its tax-exempt status. In each case the issuer of the bonds has
covenanted to comply with applicable requirements and bond counsel to such
issuer has issued an opinion that the interest on the bonds is exempt from
Federal income tax under existing laws and regulations. Certain issuers of
housing bonds have considered various ways to redeem bonds they have issued
prior to the stated first redemption dates for such bonds. In connection with
the housing bonds held by the Fund, the Sponsor at the Date of Deposit is not
aware that any of the respective issuers of such bonds are actively
considering the redemption of such bonds prior to their respective stated
initial call dates.

Certain of the Bonds may be health care revenue bonds. Ratings of bonds issued
for health care facilities are often based on feasibility studies that contain
projections of occupancy levels, revenues and expenses. A facility's gross
receipts and net income available for debt service may be affected by future
events and conditions including, among other things, demand for services and
the ability of the facility to provide the services required, physicians'
confidence in the facility, management capabilities, competition with other
health care facilities, efforts by insurers and governmental agencies to limit
rates, legislation establishing state rate-setting agencies, expenses, the
cost and possible unavailability of malpractice insurance, the funding of
Medicare, Medicaid and other similar third party payor programs, government
regulation and the termination or restriction of governmental financial
assistance, including that associated with Medicare, Medicaid and other
similar third party payor programs.

Certain of the Bonds may be obligations of public utility issuers, including
those selling wholesale and retail electric power and gas. General problems of
such issuers would include the difficulty in financing large construction
programs in an inflationary period, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
difficulty of the capital market in absorbing utility debt, the difficulty in
obtaining fuel at reasonable prices and the effect of energy conservation. In
addition, Federal, state and municipal governmental authorities may from time
to time review existing, and impose additional, regulations governing the
licensing, construction and operation of nuclear power plants, which may
adversely affect the ability of the issuers of certain of the Bonds to make
payments of principal and/or interest on such Bonds.

Certain of the Bonds may be obligations of issuers whose revenues are derived
from the sale of water and/or sewerage services. Such bonds are generally
payable from user fees. The problems of such issuers include the ability to
obtain timely and adequate rate increases, population decline resulting in
decreased user fees, the difficulty of financing large construction programs,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the increasing difficulty of obtaining or
discovering new supplies of fresh water, the effect of conservation programs
and the impact of "no-growth" zoning ordinances.

Certain of the Bonds may be industrial revenue bonds ("IRBs" ). IRBs
have generally been issued under bond resolutions pursuant to which the
revenues and receipts payable under the arrangements with the operator of a
particular project have been assigned and pledged to purchasers. In some
cases, a mortgage on the underlying project may have been granted as security
for the IRBs. Regardless of the structure, payment of IRBs is solely dependent
upon the creditworthiness of the corporate operator of the project or
corporate guarantor. Corporate operators or guarantors may be affected by many
factors which may have an adverse impact on the credit quality of the
particular company or industry. These include cyclicality of revenues and
earnings, regulatory and environmental restrictions, litigation resulting from
accidents or environmentally-caused illnesses, extensive competition and
financial deterioration resulting from a corporate restructuring pursuant to a
leveraged buy-out, takeover or otherwise. Such a restructuring may result in
the operator of a project becoming highly leveraged which may impact on such
operator's creditworthiness which in turn would have an adverse impact on the
rating and/or market value of such bonds. Further, the possibility of such a
restructuring may have an adverse impact on the market for and consequently
the value of such bonds, even though no actual takeover or other action is
ever contemplated or effected.

Certain of the Bonds may be obligations that are secured by lease payments of
a governmental entity (hereinafter called "lease obligations" ). Lease
obligations are often in the form of certificates of participation. Although
the lease obligations do not constitute general obligations of the
municipality for which the municipality's taxing power is pledged, a lease
obligation is ordinarily backed by the municipality's covenant to appropriate
for and make the payments due under the lease obligation. However, certain
lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease payments in future years
unless money is appropriated for such purpose on a yearly basis. A
governmental entity that enters into such a lease agreement cannot obligate
future governments to appropriate for and make lease payments but covenants to
take such action as is necessary to include any lease payments due in its
budgets and to make the appropriations therefor. A governmental entity's
failure to appropriate for and to make payments under its lease obligation
could result in insufficient funds available for payment of the obligations
secured thereby. Although "non-appropriation" lease obligations are
secured by the leased property, disposition of the property in the event of
foreclosure might prove difficult.

Certain of the Bonds 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 include the
prospect of a declining percentage of the population consisting of "
college" age individuals, possible inability to raise tuitions and fees
sufficiently to cover increased operating costs, the uncertainty of continued
receipt of Federal grants and state funding, and government legislation or
regulations which may adversely affect the revenues or costs of such issuers.

Certain of the Bonds in certain of the Trusts 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. From time to time the air
transport industry has experienced significant variations in earnings and
traffic, due to increased competition, excess capacity, increased costs,
deregulation, traffic constraints and other factors, and several airlines have
experienced severe financial difficulties. Similarly, payment on bonds related
to other facilities is dependent on revenues from the projects, such as user
fees from ports, tolls on turnpikes and bridges and rents from buildings.
Therefore, payment may be adversely affected by reduction in revenues due to
such factors as increased cost of maintenance, decreased use of a facility,
lower cost of alternative modes of transportation, scarcity of fuel and
reduction or loss of rents.

Certain of the Bonds may be obligations which are payable from and secured by
revenues derived from the operation of resource recovery facilities. Resource
recovery facilities are designed to process solid waste, generate steam and
convert steam to electricity. Resource recovery bonds may be subject to
extraordinary optional redemption at par upon the occurrence of certain
circumstances, including but not limited to: destruction or condemnation of a
project; contracts relating to a project becoming void, unenforceable or
impossible to perform; changes in the economic availability of raw materials,
operating supplies or facilities necessary for the operation of a project or
technological or other unavoidable changes adversely affecting the operation
of a project; and administrative or judicial actions which render contracts
relating to the projects void, unenforceable or impossible to perform or
impose unreasonable burdens or excessive liabilities. The Sponsor cannot
predict the causes or likelihood of the redemption of resource recovery bonds
in a Trust prior to the stated maturity of the bonds.

Certain of the Bonds may have been acquired at a market discount from par
value at maturity. The coupon interest rates on discount bonds at the time
they were purchased and deposited in a Trust were lower than the current
market interest rates for newly issued bonds of comparable rating and type. If
such interest rates for newly issued comparable bonds increase, the market
discount of previously issued bonds will become greater, and if such interest
rates for newly issued comparable bonds decline, the market discount of
previously issued bonds will be reduced, other things being equal. Investors
should also note that the value of bonds purchased at a market discount will
increase in value faster than bonds purchased at a market premium if interest
rates decrease. Conversely, if interest rates increase, the value of bonds
purchased at a market discount will decrease faster than bonds purchased at a
market premium. In addition, if interest rates rise, the prepayment risk of
higher yielding, premium bonds and the prepayment benefit for lower yielding,
discount bonds will be reduced. A bond purchased at a market discount and held
to maturity will have a larger portion of its total return in the form of
taxable income and capital gain and less in the form of tax-exempt interest
income than a comparable bond newly issued at current market rates. See "
Federal Tax Status" in Prospectus Part II. Market discount attributable to
interest changes does not indicate a lack of market confidence in the issue.

Certain of the Bonds may be "zero coupon" bonds. Zero coupon bonds are
purchased at a deep discount because the buyer receives 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.

Certain of the Bonds may have been purchased on a "when, as and if
issued" or "delayed delivery" basis. See "Notes to
Portfolio" in Prospectus Part I. The delivery of any such Bonds may be
delayed or may not occur. Interest on these Bonds begins accruing to the
benefit of Unitholders on their respective dates of delivery. To the extent
any Bonds are actually delivered to the Fund after their respective expected
dates of delivery, Unitholders who purchase their Units prior to the date such
Bonds are actually delivered to the Trustee would be required to adjust their
tax basis in their Units for a portion of the interest accruing on such Bonds
during the interval between their purchase of Units and the actual delivery of
such Bonds. As a result of any such adjustment, the Estimated Current Returns
during the first year would be slightly lower than those stated in the
Prospectus which would be the returns after the first year, assuming the
portfolio of a Trust and estimated annual expenses other than that of the
Trustee (which may be reduced in the first year only) do not vary from that
set forth in Prospectus Part I. Unitholders will be "at risk" with
respect to all Bonds in the portfolios including "when, as and if
issued" and "delayed delivery" Bonds (i.e., may derive either gain
or loss from fluctuations in the evaluation of such Bonds) from the date they
commit for Units.

Certain of the Bonds 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. The exercise of
redemption or call provisions will (except to the extent the proceeds of the
called bonds are used to pay for Unit redemptions) result in the distribution
of principal and may result in a reduction in the amount of subsequent
interest distributions; it may also affect the current return on Units of the
Trust involved. 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 bonds or may require the mandatory
redemption of bonds include, among others: a final determination that the
interest on the bonds is taxable; the substantial damage or destruction by
fire or other casualty of the project for which the proceeds of the bonds were
used; an exercise by a local, state or Federal governmental unit of its power
of eminent domain to take all or substantially all of the project for which
the proceeds of the bonds were used; changes in the economic availability of
raw materials, operating supplies or facilities or technological or other
changes which render the operation of the project for which the proceeds of
the bonds were used uneconomic; changes in law or an administrative or
judicial decree which renders the performance of the agreement under which the
proceeds of the bonds were made available to finance the project impossible or
which creates unreasonable burdens or which imposes excessive liabilities,
such as taxes, not imposed on the date the bonds are issued on the issuer of
the bonds or the user of the proceeds of the bonds; an administrative or
judicial decree which requires the cessation of a substantial part of the
operations of the project financed with the proceeds of the bonds; an
overestimate of the costs of the project to be financed with the proceeds of
the bonds resulting in excess proceeds of the bonds which may be applied to
redeem bonds; or an underestimate of a source of funds securing the bonds
resulting in excess funds which may be applied to redeem bonds. The issuer of
certain bonds in a Trust may have sold or reserved the right to sell, upon the
satisfaction of certain conditions, to third parties all or any portion of its
rights to call bonds in accordance with the stated redemption provisions of
such bonds. In such a case the issuer no longer has the right to call the
bonds for redemption unless it reacquires the rights from such third party. A
third party pursuant to these rights may exercise the redemption provisions
with respect to a bond at a time when the issuer of the bond might not have
called a bond for redemption had it not sold such rights. The Sponsor is
unable to predict all of the circumstances which may result in such redemption
of an issue of Bonds. See also the discussion of single family mortgage and
multi-family revenue bonds above for more information on the call provisions
of such bonds.

To the best knowledge of the Sponsor, there is no litigation pending as of the
Date of Deposit in respect of any Bonds which might reasonably be expected to
have a material adverse effect upon the Fund or any of the Trusts. At any time
after the Date of Deposit, litigation may be initiated on a variety of grounds
with respect to Bonds in the Fund. Such litigation, as, for example, suits
challenging the issuance of pollution control revenue bonds under
environmental protection statutes, may affect the validity of such Bonds or
the tax-free nature of the interest thereon. While the outcome of litigation
of such nature can never be entirely predicted, the Fund has received or will
receive opinions of bond counsel to the issuing authorities of each Bond on
the date of issuance to the effect that such Bonds have been validly issued
and that the interest thereon is exempt from Federal income tax. In addition,
other factors may arise from time to time which potentially may impair the
ability of issuers to meet obligations undertaken with respect to the Bonds.

Insurance on the Bonds in the Insured Trusts

Insurance has been obtained by each Insured Trust, by the issuer of Bonds in
an Insured Trust, by a prior owner of such Bonds, or by the Sponsor prior to
the deposit of such Bonds in a Trust guaranteeing prompt payment of interest
and principal, when due, in respect of the Bonds in such Trust. See "The
Trusts--Objectives and Bond Selection" in Prospectus Part II. The
Portfolio Insurers and the Preinsured Bond Insurers are described under "
Portfolio" and "Notes to Portfolio" in Prospectus Part I. The
Portfolio Insurers are either AMBAC Assurance Corporation or Financial
Guaranty Insurance Company. An insurance policy obtained by an Insured Trust,
if any, is non-cancellable and will continue in force so long as such Trust is
in existence, the respective Portfolio Insurer is still in business and the
Bonds described in such policy continue to be held by such Trust (see "
Portfolio" for the respective Insured Trust in Prospectus Part I). Any
portfolio insurance premium for an Insured Trust, which is an obligation of
such Trust, is paid by such Trust on a monthly basis. Non-payment of premiums
on a policy obtained by an Insured Trust will not result in the cancellation
of insurance but will force the insurer to take action against the Trustee to
recover premium payments due it. The Trustee in turn will be entitled to
recover such payments from such Trust. Premium rates for each issue of Bonds
protected by a policy obtained by an Insured Trust, if any, are fixed for the
life of the Trust. The premium for any Preinsured Bond insurance has been paid
by such issuer, by a prior owner of such Bonds or the Sponsor and any such
policy or policies are non-cancellable and will continue in force so long as
the Bonds so insured are outstanding and the respective Preinsured Bond
Insurer remains in business. If the provider of an original issuance insurance
policy is unable to meet its obligations under such policy or if the rating
assigned to the claims-paying ability of any such insurer deteriorates, the
Portfolio Insurers have no obligation to insure any issue adversely affected
by either of the above described events.

The aforementioned portfolio insurance obtained by an Insured Trust, if any,
guarantees the timely payment of principal and interest on the Bonds when they
fall due. For the purposes of insurance obtained by an Insured Trust, "
when due" generally means the stated payment or maturity date for the
payment of principal and interest. However, in the event (a) an issuer of a
Bond defaults in the payment of principal or interest on such Bond, (b) such
issuer enters into a bankruptcy proceeding or (c) the maturity of such Bond is
accelerated, the affected Portfolio Insurer has the option, in its sole
discretion, after receiving notice of the earliest to occur of such a default,
bankruptcy proceeding or acceleration to pay the outstanding principal amount
of such Bond plus accrued interest to the date of such payment and thereby
retire the Bond from the affected Trust prior to such Bond's stated maturity
date. The insurance does not guarantee the market value of the Bonds or the
value of the Units. Insurance obtained by an Insured Trust, if any, is only
effective as to Bonds owned by and held in such Trust. In the event of a sale
of any such Bond by the Trustee, such insurance terminates as to such Bond on
the date of sale.

Pursuant to an irrevocable commitment of the Portfolio Insurers, the Trustee,
upon the sale of a Bond covered under a portfolio insurance policy obtained by
an Insured Trust, has the right to obtain permanent insurance with respect to
such Bond (i.e., insurance to maturity of the Bond regardless of the identity
of the holder thereof) (the "Permanent Insurance" ) upon the payment of
a single predetermined insurance premium and any expenses related thereto from
the proceeds of the sale of such Bond. Accordingly, any Bond in an Insured
Trust is eligible to be sold on an insured basis. It is expected that the
Trustee would exercise the right to obtain Permanent Insurance only if upon
such exercise the affected Trust would receive net proceeds (sale of Bond
proceeds less the insurance premium and related expenses attributable to the
Permanent Insurance) from such sale in excess of the sale proceeds if such
Bonds were sold on an uninsured basis. The insurance premium with respect to
each Bond eligible for Permanent Insurance would be determined based upon the
insurability of each Bond as of the Date of Deposit and would not be increased
or decreased for any change in the creditworthiness of each Bond.

The Sponsor believes that the Permanent Insurance option provides an advantage
to an Insured Trust in that each Bond insured by a Trust insurance policy may
be sold out of the affected Trust with the benefits of the insurance attaching
thereto. Thus, the value of the insurance, if any, at the time of sale, can be
realized in the market value of the Bond so sold (which is not the case in
connection with any value attributable to an Insured Trust's portfolio
insurance). See "Public Offering--Offering Price" in Prospectus Part
II. Because any such insurance value may be realized in the market value of
the Bond upon the sale thereof upon exercise of the Permanent Insurance
option, the Sponsor anticipates that (a) in the event an Insured Trust were to
be comprised of a substantial percentage of Bonds in default or significant
risk of default, it is much less likely that such Trust would need at some
point in time to seek a suspension of redemptions of Units than if such Trust
were to have no such option (see "Rights of Unitholders--Redemption of
Units" in Prospectus Part II) and (b) at the time of termination of an
Insured Trust, if such Trust were holding defaulted Bonds or Bonds in
significant risk of default such Trust would not need to hold such Securities
until their respective maturities in order to realize the benefits of such
Trust's portfolio insurance (see "Fund Administration--Termination of
Trust Agreement" in Prospectus Part II).

Except as indicated below, insurance obtained by an Insured Trust has no
effect on the price or redemption value of Units. It is the present intention
of the Evaluator to attribute a value for such insurance (including the right
to obtain Permanent Insurance) for the purpose of computing the price or
redemption value of Units if the Bonds covered by such insurance are in
default in payment of principal or interest or in significant risk of such
default. The value of the insurance will be the difference between (i) the
market value of a bond which is in default in payment of principal or interest
or in significant risk of such default assuming the exercise of the right to
obtain Permanent Insurance (less the insurance premium and related expenses
attributable to the purchase of Permanent Insurance) and (ii) the market value
of such Bonds not covered by Permanent Insurance. See "Public
Offering--Offering Price" in Prospectus Part II. It is also the present
intention of the Trustee not to sell such Bonds to effect redemptions or for
any other reason but rather to retain them in the portfolio because value
attributable to the insurance cannot be realized upon sale. See "Public
Offering--Offering Price" in Prospectus Part II for a more complete
description of an Insured Trust's method of valuing defaulted Bonds and Bonds
which have a significant risk of default. Insurance obtained by the issuer of
a Bond is effective so long as such Bond is outstanding. Therefore, any such
insurance may be considered to represent an element of market value in regard
to the Bonds thus insured, but the exact effect, if any, of this insurance on
such market value cannot be predicted.

The portfolio insurance policy or policies obtained by an Insured Trust, if
any, with respect to the Bonds in such Trust were issued by one or more of the
Portfolio Insurers. Any other Preinsured Bond insurance policy (or commitment
therefor) was issued by one of the Preinsured Bond Insurers. See "The
Trusts--Objectives and Bond Selection" Prospectus Part II.

Capital Markets Assurance Corporation ("CapMAC" ) is a New
York-domiciled monoline stock insurance company which engages only in the
business of financial guarantee and surety insurance. CapMAC is licensed in
all 50 states in addition to the District of Columbia, the Commonwealth of
Puerto Rico and the territory of Guam. CapMAC insures structured asset-backed,
corporate, municipal and other financial obligations in the U.S. and
international capital markets. CapMAC also provides financial guarantee
reinsurance for structured asset-backed, corporate, municipal and other
financial obligations written by other major insurance companies.

CapMAC's claims-paying ability is rated "Aaa" by Moody's Investors
Service, Inc. ("Moody's" ), "AAA" by Standard & Poor's, "
AAA" by Duff & Phelps Credit Rating Co. ("Duff & Phelps" ) and "
AAA" by Nippon Investors Service, Inc. Such ratings reflect only the views
of the respective rating agencies, are not recommendations to buy, sell or
hold securities and are subject to revision or withdrawal at any time by such
rating agencies.

CapMAC is a wholly-owned subsidiary of CapMAC Holdings Inc. ("Holdings"
). In December of 1995, in connection with an initial public offering of its
common stock, Holdings became a public company with its common stock listed on
the New York Stock Exchange under the symbol "KAP." Neither Holdings
nor any of its stockholders is obligated to pay any claims under any policy
issued by CapMAC or any debts of CapMAC or to make additional capital
contributions to CapMAC.

CapMAC is regulated by the Superintendent of Insurance of the State of New
York. In addition, CapMAC is subject to regulation by the insurance laws and
regulations of other jurisdictions in which it is licensed. Such insurance
laws regulate, among other things, the amount of net exposure per risk that
CapMAC may retain, capital transfers, dividends, investment of assets, changes
in control, transactions with affiliates and consolidations and acquisitions.
CapMAC is subject to periodic regulatory examinations by the same regulatory
authorities.

CapMAC's obligations under the Policy(s) may be reinsured. Such reinsurance
does not relieve CapMAC of any of its obligations under the Policy(s).

THE POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND
SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

As of June 30, 1997, CapMAC had qualified statutory capital (which consists of
policyholders' surplus, statutory capital, and contingency reserves) of $271.6
million, up from $266.2 million at March 31, 1997, and had not incurred any
debt obligations. Article 69 of the New York State Insurance Law requires
CapMAC to establish and maintain the contingency reserve, which is available
to cover claims under policies issued by CapMAC.

Copies of CapMAC's financial statements prepared in accordance with statutory
accounting standards, which differ from generally accepted accounting
principles, and filed with the Insurance Department of the State of New York
are available upon request. CapMAC is located at 885 Third Avenue, New York,
New York 10022, and its telephone is (212) 755-1155.

Effective July 14, 1997, AMBAC Indemnity Corporation changed its name to AMBAC
Assurance Corporation ("AMBAC Assurance" ). AMBAC Assurance is a
Wisconsin-domiciled stock insurance corporation regulated by the Office of the
Commissioner of Insurance of the State of Wisconsin and licensed to do
business in 50 states, the District of Columbia and the Commonwealth of Puerto
Rico, with admitted assets of $2,735,772,668 (unaudited) and statutory capital
of $1,547,693,950 (unaudited) as of June 30, 1997. Statutory capital consists
of AMBAC Assurance's policyholders' surplus and statutory contingency reserve.
AMBAC Assurance is a wholly owned subsidiary of AMBAC Financial Group, Inc., a
100% publicly-held company. Moody's Investors Service, Inc. and Standard &
Poor's have both assigned a triple-A claims-paying ability rating to AMBAC
Assurance.

Copies of its financial statements prepared in accordance with statutory
accounting standards are available from AMBAC Assurance. The address of AMBAC
Assurance's administrative offices and its telephone number are One State
Street Plaza, 17th Floor, New York, New York, 10004 and (212) 668-0340.

AMBAC Assurance has entered into quota share reinsurance agreements under
which a percentage of the insurance underwritten pursuant to certain municipal
bond insurance programs of AMBAC Assurance has been and will be assumed by a
number of foreign and domestic unaffiliated reinsurers.

MBIA Insurance Corporation ("MBIA" ) is the principal operating
subsidiary of MBIA Inc., a New York Stock Exchange listed company. MBIA Inc.
is not obligated to pay the debts of or claims against MBIA. MBIA is domiciled
in the State of New York and licensed to do business in and subject to
regulation under the laws of all fifty states, the District of Columbia, the
Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico,
the Virgin Islands of the United States and the Territory of Guam. MBIA has
two European branches, one in the Republic of France and the other in the
Kingdom of Spain. New York has laws prescribing minimum capital requirements,
limiting classes and concentrations of investments and requiring the approval
of policy rates and forms. State laws also regulate the amount of both the
aggregate and individual risks that may be insured, the payment of dividends
by the insurer, changes in control and transactions among affiliates.
Additionally, the Insurer is required to maintain contingency reserves on its
liabilities in certain amounts and for certain periods of time.

As of December 31, 1996, the insurer had admitted assets of $4.4 billion
(audited), total liabilities of $3.0 billion (audited), and total capital and
surplus of $1.4 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. As of June 30, 1997, MBIA had admitted assets of $4.8 billion
(unaudited), total liabilities of $3.2 billion (unaudited), and total capital
and surplus of $1.6 billion (unaudited), determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities. Copies of MBIA's financial statements prepared in accordance with
statutory accounting practices are available from MBIA. The address of MBIA is
113 King Street, Armonk, New York 10504.

Effective December 31, 1989, MBIA, Inc. acquired Bond Investors Group, Inc. On
January 5, 1990, MBIA acquired all of the outstanding stock of Bond Investors
Group, Inc., the parent of Bond Investors Guaranty Insurance Company (BIG),
now known as MBIA Insurance Corp. of Illinois. Through a reinsurance
agreement, BIG has ceded all of its net insured risks, as well as its unearned
premium and contingency reserves, to MBIA and MBIA has reinsured BIG's net
outstanding exposure.

Moody's Investors Service, Inc. rates all bond issues insured by MBIA "
Aaa" and short-term loans "MIG-1," both designated to be of the
highest quality.

Standard & Poor's rates all new issues insured by MBIA "AAA" Prime
Grade.

Moody's, Standard & Poor's and Fitch Investors Service, L.P., all rate the
claims paying ability of MBIA as "Triple A."

The Moody's Investors Service, Inc. rating of MBIA should be evaluated
independently of the Standard & Poor's rating of MBIA. No application has been
made to any other rating agency in order to obtain additional ratings on the
Bonds. The ratings reflect the respective rating agency's current assessment
of the creditworthiness of MBIA and its ability to pay claims on its policies
of insurance. Any further explanation as to the significance of the above
ratings may be obtained only from the applicable rating agency.

The above ratings are not recommendations to buy, sell or hold the Bonds and
such ratings may be subject to revision or withdrawal at any time by the
rating agencies. Any downward revision or withdrawal of either or both ratings
may have an adverse effect on the market price of the Obligations.

Financial Guaranty Insurance Company ("Financial Guaranty" or "
FGIC" ) is a wholly-owned subsidiary of FGIC Corporation (the "
Corporation" ), a Delaware holding company. The Corporation is a
wholly-owned subsidiary of General Electric Capital Corporation ("GECC"
). Neither the Corporation nor GECC is obligated to pay the debts of or the
claims against Financial Guaranty. Financial Guaranty is domiciled in the
State of New York and is subject to regulation by the State of New York
Insurance Department. As of June 30, 1997, the total capital and surplus of
Financial Guaranty was $1,164,694,536. Copies of Financial Guaranty's
financial statements, prepared on the basis of statutory accounting
principles, and the Corporation's financial statements, prepared on the basis
of generally accepted accounting principles, may be obtained by writing to
Financial Guaranty at 115 Broadway, New York, New York 10006, Attention:
Communications Department, telephone number: (212) 312-3000 or to the New York
State Insurance Department at 160 West Broadway, 18th Floor, New York, New
York 10013, Attention: Financial Condition Property/Casualty Bureau, telephone
number: (212) 621-0389.

In addition, Financial Guaranty is currently licensed to write insurance in
all 50 states and the District of Columbia.

Financial Security Assurance Inc. ("Financial Security" or "
FSA" ) is a monoline insurance company incorporated in 1984 under the laws
of the State of New York. Financial Security is licensed to engage in the
financial guaranty insurance business in all 50 states, the District of
Columbia and Puerto Rico.

Financial Security and its subsidiaries are engaged in the business of writing
financial guaranty insurance, principally in respect of securities offered in
domestic and foreign markets. In general, financial guaranty insurance
consists of the issuance of a guaranty of scheduled payments of an issuer's
securities, thereby enhancing the credit rating of those securities, in
consideration for payment of a premium to the insurer. Financial Security and
its subsidiaries principally insure asset-backed, collateralized and municipal
securities. Asset-backed securities are generally supported by residential
mortgage loans, consumer or trade receivables, securities or other assets
having an ascertainable cash flow or market value. Collateralized securities
include public utility first mortgage bonds and sale/leaseback obligation
bonds. Municipal securities consist largely of general obligation bonds,
special revenue bonds and other special obligations of state and local
governments. Financial Security insures both newly issued securities sold in
the primary market and outstanding securities sold in the secondary market
that satisfy Financial Security's underwriting criteria.

Financial Security is a wholly-owned subsidiary of Financial Security
Assurance Holdings Ltd. ("Holdings" ), a New York Stock Exchange listed
company. Major shareholders of Holdings include Fund American Enterprises
Holdings, Inc., U S WEST Capital Corporation and The Tokio Marine and Fire
Insurance Co., Ltd. No shareholder of Financial Security is obligated to pay
any debt of Financial Security or its subsidiaries or any claim under any
insurance policy issued by Financial Security or its subsidiaries or to make
any additional contribution to the capital of Financial Security or its
subsidiaries. As of June 30, 1997, the total policyholders' surplus and
contingency reserves and the total unearned premium reserve, respectively, of
Financial Security and its consolidated subsidiaries were, in accordance with
statutory accounting principles, approximately $711,154,000 (unaudited) and
$461,203,000 (unaudited), and the total shareholders' equity and the total
unearned premium reserve, respectively, of Financial Security and its
consolidated subsidiaries were, in accordance with generally accepted
accounting principles, approximately $861,209,000 (unaudited) and $401,251,000
(unaudited). Copies of Financial Security's financial statements may be
obtained by writing to Financial Security at 350 Park Avenue, New York, New
York, 10022, Attention: Communications Department. Its telephone number is
(212) 826-0100.

Pursuant to an intercompany agreement, liabilities on financial guaranty
insurance written or reinsured from third parties by Financial Security or any
of its domestic operating insurance company subsidiaries (including FSA
Maryland) are reinsured among such companies on an agreed-upon percentage
substantially proportional to their respective capital, surplus and reserves,
subject to applicable statutory risk limitations. In addition, Financial
Security and FSA Maryland reinsure a portion of their liabilities under
certain of their financial guaranty insurance policies with other reinsurers
under various quota share treaties and on a transaction-by-transaction basis.
Such reinsurance is utilized as a risk management device and to comply with
certain statutory and rating agency requirements; it does not alter or limit
the obligations of Financial Security or FSA Maryland under any financial
guaranty insurance policy.

The claims-paying ability of Financial Security and FSA Maryland is rated "
Aaa" by Moody's Investors Service, Inc., and "AAA" by Standard &
Poor's Ratings Services, Nippon Investors Service Inc. and Standard & Poor's
(Australia) Pty. Ltd. Such ratings reflect only the views of the respective
rating agencies, are not recommendations to buy, sell or hold securities and
are subject to revision or withdrawal at any time by such rating agencies.

Capital Guaranty Insurance Company was involved in a merger in 1995. On
December 20, 1995, Capital Guaranty Corporation ("CGC" ) merged with a
subsidiary of Financial Security Assurance Holdings Ltd. and Capital Guaranty
Insurance Company, CGC's principal operating subsidiary, changed its name to
Financial Security Assurance of Maryland Inc. ("FSA Maryland" ) and
became a wholly owned subsidiary of Financial Security Assurance Inc.

The address of FSA Maryland and its telephone number are Steuart Tower, One
Market Plaza, San Francisco, CA 94105-1413 and (415) 995-8000.

In order to be in an Insured Trust, Bonds must be insured by one of the
Preinsured Bond Insurers or be eligible for the insurance being obtained by
such Trust. In determining eligibility for insurance, the Preinsured Bond
Insurers and the Portfolio Insurers have applied their own standards which
correspond generally to the standards they normally use in establishing the
insurability of new issues of municipal bonds and which are not necessarily
the criteria used in the selection of Bonds by the Sponsor. To the extent the
standards of the Preinsured Bond Insurers and the Portfolio Insurers are more
restrictive than those of the Sponsor, the previously stated Trust investment
criteria have been limited with respect to the Bonds. This decision is made
prior to the Date of Deposit, as debt obligations not eligible for insurance
are not deposited in an Insured Trust. Thus, all of the Bonds in the
portfolios of the Insured Trusts in the Fund are insured either by the
respective Trust or by the issuer of the Bonds, by a prior owner of such Bonds
or by the Sponsor prior to the deposit of such Bonds in a Trust.

Because the Bonds are insured by one of the Portfolio Insurers or one of the
Preinsured Bond Insurers as to the timely payment of principal and interest,
when due, and on the basis of the various reinsurance agreements in effect,
Standard & Poor's has assigned to the Units of each Insured Trust its "
AAA" investment rating. Such rating will be in effect for a period of
thirteen months from the Date of Deposit and will, unless renewed, terminate
at the end of such period. See "Description of Ratings" . The obtaining
of this rating by an Insured Trust should not be construed as an approval of
the offering of the Units by Standard & Poor's or as a guarantee of the market
value of such Trust or of the Units.

An objective of portfolio insurance obtained by an Insured Trust is to obtain
a higher yield on the portfolio of such Trust than would be available if all
the Bonds in such portfolio had Standard & Poor's "AAA" rating and yet
at the same time to have the protection of insurance of prompt payment of
interest and principal, when due, on the Bonds. There is, of course, no
certainty that this result will be achieved. Preinsured Bonds in an Insured
Trust (all of which are rated "AAA" by Standard & Poor's) may or may
not have a higher yield than uninsured bonds rated "AAA" by Standard &
Poor's. In selecting such Bonds for an Insured Trust, the Sponsor has applied
the criteria hereinbefore described.

In the event of nonpayment of interest or principal, when due, in respect of a
Bond, AMBAC Indemnity shall make such payment not later than 30 days and
Financial Guaranty shall make such payment within one business day after the
respective insurer has been notified that such nonpayment has occurred or is
threatened (but not earlier than the date such payment is due). The insurer,
as regards any payment it may make, will succeed to the rights of the Trustee
in respect thereof. All policies issued by the Portfolio Insurers and the
Preinsured Bond Insurers are substantially identical insofar as obligations to
an Insured Trust are concerned.

The Internal Revenue Service has issued a letter ruling which holds in effect
that insurance proceeds representing maturing interest on defaulted municipal
obligations paid to holders of insured bonds, under policy provisions
substantially identical to the policies described herein, will be excludable
from Federal gross income under Section 103(a)(1) of the Internal Revenue Code
to the same extent as if such payments were made by the issuer of the
municipal obligations. Holders of Units in an Insured Trust should discuss
with their tax advisers the degree of reliance which they may place on this
letter ruling. However, Chapman and Cutler, counsel for the Sponsor, has given
an opinion to the effect such payment of proceeds would be excludable from
Federal gross income to the extent described under "Federal Tax Status"
in Prospectus Part II.

The information relating to each Portfolio Insurer has been furnished by such
companies. The financial information with respect to each Portfolio Insurer
appears in reports filed with state insurance regulatory authorities and is
subject to audit and review by such authorities. No representation is made
herein as to the accuracy or adequacy of such information or as to the absence
of material adverse changes in such information subsequent to the dates
thereof.

Portfolio Administration

The Trustee is empowered to sell, for the purpose of redeeming Units tendered
by any Unitholder, and for the payment of expenses for which funds may not be
available, such of the Bonds designated by the Evaluator as the Trustee in its
sole discretion may deem necessary. The Evaluator, in designating such Bonds,
will consider a variety of factors including (a) interest rates, (b) market
value and (c) marketability. The Sponsor, in connection with the Quality
Trusts, may direct the Trustee to dispose of Bonds upon default in payment of
principal or interest, institution of certain legal proceedings, default under
other documents adversely affecting debt service, default in payment of
principal or interest or other obligations of the same issuer, decline in
projected income pledged for debt service on revenue bonds or decline in price
or the occurrence of other market or credit factors, including advance
refunding (i.e., the issuance of refunding securities and the deposit of the
proceeds thereof in trust or escrow to retire the refunded securities on their
respective redemption dates), so that in the opinion of the Sponsor the
retention of such Bonds would be detrimental to the interest of the
Unitholders. In connection with the Insured Trusts to the extent that Bonds
are sold which are current in payment of principal and interest in order to
meet redemption requests and defaulted Bonds are retained in the portfolio in
order to preserve the related insurance protection applicable to said Bonds,
the overall quality of the Bonds remaining in such Trust's portfolio will tend
to diminish. Except as described in this section and in certain other unusual
circumstances for which it is determined by the Trustee to be in the best
interests of the Unitholders or if there is no alternative, the Trustee is not
empowered to sell Bonds from an Insured Trust which are in default in payment
of principal or interest or in significant risk of such default and for which
value has been attributed for the insurance obtained by such Insured Trust.
Because of restrictions on the Trustee under certain circumstances, the
Sponsor may seek a full or partial suspension of the right of Unitholders to
redeem their Units in an Insured Trust. See "Rights of
Unitholders--Redemption of Units" in Prospectus Part II. The Sponsor is
empowered, but not obligated, to direct the Trustee to dispose of Bonds in the
event of an advanced refunding.

The Sponsor is required to instruct the Trustee to reject any offer made by an
issuer of any of the Bonds to issue new obligations in exchange or
substitution for any Bond pursuant to a refunding or refinancing plan, except
that the Sponsor may instruct the Trustee to accept or reject such an offer or
to take any other action with respect thereto as the Sponsor may deem proper
if (1) the issuer is in default with respect to such Bond or (2) in the
written opinion of the Sponsor the issuer will probably default with respect
to such Bond in the reasonably foreseeable future. Any obligation so received
in exchange or substitution will be held by the Trustee subject to the terms
and conditions of the Trust Agreement to the same extent as Bonds originally
deposited thereunder. Within five days after the deposit of obligations in
exchange or substitution for underlying Bonds, the Trustee is required to give
notice thereof to each Unitholder of the Trust thereby affected, identifying
the Bonds eliminated and the Bonds substituted therefor. Except as stated
herein and under "Fund Administration--Replacement Bonds" in
Prospectus Part II regarding the substitution of Replacement Bonds for Failed
Bonds, the acquisition by the Fund of any securities other than the Bonds
initially deposited is not permitted.

If any default in the payment of principal or interest on any Bonds occurs and
no provision for payment is made therefor within 30 days, the Trustee is
required to notify the Sponsor thereof. If the Sponsor fails to instruct the
Trustee to sell or to hold such Bonds within 30 days after notification by the
Trustee to the Sponsor of such default, the Trustee may in its discretion sell
the defaulted Bond and not be liable for any depreciation or loss thereby
incurred.

Trustee Information

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 unit investment trust division
offices at 101 Barclay Street, New York, New York 10286, telephone (800)
221-7668. 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 duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Bonds for the portfolios of any of the Trusts.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Fund. Such
records shall include the name and address of, and the certificates issued by
the Fund to, every Unitholder of the Fund. Such books and records shall be
open to inspection by any Unitholder 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 is required to keep a certified copy or
duplicate original of the Trust Agreement on file in its office available for
inspection at all reasonable times during the usual business hours by any
Unitholder, together with a current list of the Bonds held in the Fund.

Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trusts created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor. The Trustee or
successor trustee must mail a copy of the notice of resignation to all Fund
Unitholders then of record, not less than 60 days before the date specified in
such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee. Any corporation into which a
Trustee may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which a Trustee shall be a
party, shall be the successor trustee. The Trustee must be a banking
corporation organized under the laws of the United States or any state and
having at all times an aggregate capital, surplus and undivided profits of not
less than $5,000,000.

Termination of the Trust Agreement

A Trust may be terminated at any time by consent of Unitholders of 51% of the
Units of such Trust then outstanding or by the Trustee when the value of such
Trust, as shown by any semi-annual evaluation, is less than 20% of the
original principal amount of Bonds. A Trust will be liquidated by the Trustee
in the event that a sufficient number of Units not yet sold are tendered for
redemption by the Underwriters, including the Sponsor, so that the net worth
of such Trust would be reduced to less than 40% of the initial principal
amount of such Trust. If a Trust is liquidated because of the redemption of
unsold Units by the Underwriters, the Sponsor will refund to each purchaser of
Units the entire sales charge paid by such purchaser. The Trust Agreement
provides that each Trust shall terminate upon the redemption, sale or other
disposition of the last Bond held in such Trust, but in no event shall it
continue beyond the end of the year preceding the fiftieth anniversary of the
Trust Agreement in the case of an IM-IT Discount, a U.S. Territorial IM-IT, a
Long-Term State or a National Quality Trust, or beyond the end of the year
preceding the twentieth anniversary of the Trust Agreement in the case of
IM-IT Limited Maturity, IM-IT Intermediate, State Intermediate Laddered
Maturity and IM-IT Short Intermediate Trusts. In the event of termination of
any Trust, written notice thereof will be sent by the Trustee to each
Unitholder of such Trust at his address appearing on the registration books of
the Fund maintained by the Trustee. Within a reasonable time thereafter the
Trustee shall liquidate any Bond then held in such Trust and shall deduct from
the funds of such Trust any accrued costs, expenses or indemnities provided by
the Trust Agreement, including estimated compensation of the Trustee and costs
of liquidation and any amounts required as a reserve to provide for payment of
any applicable taxes or other government charges. The sale of Bonds in the
Trust upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. For this reason, among
others, the amount realized by a Unitholder upon termination may be less than
the principal amount or par amount of Bonds represented by the Units held by
such Unitholder. The Trustee shall then distribute to each Unitholder his
share of the balance of the Interest and Principal Accounts. With such
distribution the Unitholder shall be furnished a final distribution statement
of the amount distributable. At such time as the Trustee in its sole
discretion shall determine that any amounts held in reserve are no longer
necessary, it shall make distribution thereof to Unitholders in the same
manner.

Notwithstanding the foregoing, in connection with final distributions to
Unitholders of an Insured Trust, it should be noted that because the portfolio
insurance obtained by an Insured Trust is applicable only while Bonds so
insured are held by such Trust, the price to be received by such Trust upon
the disposition of any such Bond which is in default, by reason of nonpayment
of principal or interest, will not reflect any value based on such insurance.
Therefore, in connection with any liquidation, it shall not be necessary for
the Trustee to, and the Trustee does not currently intend to, dispose of any
Bond or Bonds if retention of such Bond or Bonds, until due, shall be deemed
to be in the best interest of Unitholders, including, but not limited to,
situations in which a Bond or Bonds so insured have deteriorated market prices
resulting from a significant risk of default. Since the Preinsured Bonds will
reflect the value of the related insurance, it is the present intention of the
Sponsor not to direct the Trustee to hold any of such Preinsured Bonds after
the date of termination. All proceeds received, less applicable expenses, from
insurance on defaulted Bonds not disposed of at the date of termination will
ultimately be distributed to Unitholders of record as of such date of
termination as soon as practicable after the date such defaulted Bond or Bonds
become due and applicable insurance proceeds have been received by the Trustee.

Description of Ratings

Standard & Poor's, A Division of the McGraw-Hill Companies. A Standard &
Poor's municipal bond rating is a current assessment of the creditworthiness
of an obligor with respect to a specific debt obligation. This assessment of
creditworthiness may take into consideration obligors such as guarantors,
insurers or lessees.

The bond rating is not a recommendation to purchase or sell a security,
inasmuch as it does not comment as to market price.

The ratings are based on current information furnished to Standard & Poor's by
the issuer and obtained by Standard & Poor's from other sources it considers
reliable. The ratings may be changed, suspended or withdrawn as a result of
changes in, or unavailability of, such information.

The ratings are based, in varying degrees, on the following considerations:

I. Likelihood of default--capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation.

II. Nature of and provisions of the obligation.

III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangements under the laws of
bankruptcy and other laws affecting creditors' rights.

AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.

AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.

A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.

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 debt in this category than in higher rated categories.

Plus (+) or Minus (-): To provide more detailed indications of credit quality,
the ratings from "AA" to "BBB" may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.

Provisional Ratings: A provisional rating ("p" ) assumes the successful
completion of the project being financed by the issuance of 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, makes no comment on the likelihood of, or the risk of default upon
failure of, such completion. Accordingly, 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
rating symbols and their meanings follows:

Aaa--Bonds which are rated Aaa are judged to be 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.
With the occasional exception of oversupply in a few specific instances, the
safety of obligations of this class is so absolute that 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. These Aa bonds are high grade, their market value 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 higher 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
credit circumstances during a sustained period of depressed business
conditions. During periods of normalcy, bonds of this quality frequently move
in parallel with Aaa and Aa obligations, with the occasional exception of
oversupply in a few specific instances.

Baa--Bonds which are rated Baa are considered as 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.

Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the
high end of its category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.

Con--Bonds for which the security depends upon the completion of some act or
the fulfillment of some condition are rated conditionally. These are bonds
secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operating 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.

Equivalent Taxable Estimated Current Return Tables

As of the date of the Prospectus, the following tables show the approximate
taxable estimated current returns for individuals that are equivalent to
tax-exempt estimated current returns under combined Federal and State taxes
(where applicable) using the published Federal and State tax rates (where
applicable) scheduled to be in effect in 1997. They incorporate increased tax
rates for higher income taxpayers that were included in the Revenue
Reconciliation Act of 1993. These tables illustrate approximately what you
would have to earn on taxable investments to equal the tax-exempt estimated
current return in your income tax bracket. The tables assume that Federal
taxable income is equal to State income subject to tax, and for cases in which
more than one State rate falls within a Federal bracket, the State rate
corresponding to the highest income within that Federal bracket is used. The
combined State and Federal tax rates shown reflect the fact that State tax
payments are currently deductible for Federal tax purposes. The tables do not
reflect any local taxes or any taxes other than personal income taxes. The
tables do not show the approximate taxable estimated current returns for
individuals that are subject to the alternative minimum tax. The taxable
equivalent estimated current returns may be somewhat higher than the
equivalent returns indicated in the following tables for those individuals who
have adjusted gross incomes in excess of $121,200. The tables do not reflect
the effect of Federal or State limitations (if any) on the amount of allowable
itemized deductions and the deduction for personal or dependent exemptions or
any other credits. These limitations were designed to phase out certain
benefits of these deductions for higher income taxpayers. These limitations,
in effect, raise the marginal maximum Federal tax rate to approximately 44
percent for taxpayers filing a joint return and entitled to four personal
exemptions and to approximately 41 percent for taxpayers filing a single
return entitled to only one personal exemption. These limitations are subject
to certain maximums, which depend on the number of exemptions claimed and the
total amount of taxpayer's itemized deductions. For example, the limitation on
itemized deductions will not cause a taxpayer to lose more than 80% of his
allowable itemized deductions, with certain exceptions. See "Federal Tax
Status" in Prospectus Part II for a more detailed discussion of recent
Federal tax legislation.

CALIFORNIA

<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
- --------------------------------------- --------------------------------------------------------------------------
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
------------------ ------------------ --------
Equivalent Taxable Estimated Current Return
- --------------------------------------- ------- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 24.65 $ 0 - 41.20 20.1% 6.26% 6.88% 7.51% 8.14% 8.76% 9.39% 10.01%
24.65 - 59.75 41.20 - 99.60 34.7 7.66 8.42 9.19 9.95 10.72 11.49 12.25
59.75 - 124.65 99.60 - 151.75 37.4 7.99 8.79 9.58 10.38 11.18 11.98 12.78
124.65 - 271.05 151.75 - 271.05 42 8.62 9.48 10.34 11.21 12.07 12.93 13.79
Over 271.05 Over 271.05 45.2 9.12 10.04 10.95 11.86 12.77 13.69 14.60
</TABLE>

A comparison of tax-free and equivalent taxable estimated current returns with
the returns on various taxable investments is one element to consider in
making an investment decision. The Sponsor may from time to time in its
advertising and sales materials compare the then current estimated returns on
the Trusts and returns over specified periods on other similar Van Kampen
American Capital sponsored unit investment trusts with inflation rates and
with returns on taxable investments such as corporate or U.S. Government
bonds, bank CDs and money market accounts or money market funds, each of which
has investment characteristics that may differ from those of the Trusts. U.S.
Government bonds, for example, are backed by the full faith and credit of the
federal government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the condition
of the short-term debt market. The investment characteristics of the Trusts
are described more fully in the Prospectus.

California Risk Factors

The California IM-IT Trust will invest substantially all of its assets in
California Municipal Obligations. The Trust is therefore susceptible to
political, economic or regulatory factors affecting issuers of California
Municipal Obligations. These include the possible adverse effects of certain
California constitutional amendments, legislative measures, voter initiatives
and other matters that are described below. The following information provides
only a brief summary of the complex factors affecting the financial situation
in California (the "State" ) and is derived from sources that are
generally available to investors and are believed to be accurate. No
independent verification has been made of the accuracy or completeness of any
of the following information. It is based in part on information obtained from
various State and local agencies in California or contained in official
statements for various California Municipal Obligations.

There can be no assurance that future statewide or regional economic
difficulties, and the resulting impact on State or local governmental finances
generally, will not adversely affect the market value of California Municipal
Obligations held in the portfolio of the Trust or the ability of particular
obligors to make timely payments of debt service on (or relating to) those
obligations.

California's economy is the largest among the 50 states and one of the largest
in the world. The State's population of almost 32 million represents 12.3% of
the total United States population and grew by 27% in the 1980's. Personal
income in the State, at an estimated $815 billion in 1996, accounts for
approximately 13% of all personal income in the nation. Total employment is
over 14 million, the majority of which is in the service, trade and
manufacturing sector.

From mid-1990 to late 1993, the State's economy suffered its worst recession
since the 1930s, with recovery starting later than for the nation as a whole.
The State has experienced the worst job losses of any post-war recession.
Prerecession job levels may not be realized until near the end of the decade.
The largest job losses have been in Southern California, led by declines in
the aerospace and construction industries. Weakness statewide occurred in
manufacturing, construction, services and trade. Additional military base
closures will have further adverse effects on the State's economy later in the
decade.

Since the start of 1994, the California economy has shown signs of steady
recovery and growth. The State Department of Finance reports net job growth,
particularly in construction and related manufacturing, wholesale and retail
trade, transportation, recreation and services. This growth has offset the
continuing but slowing job losses in the aerospace industry and restructuring
of the finance and utility sectors, Unemployment in the State was down
substantially in 1994 from its 10% peak in January, 1994, but still remains
higher than the national average rate. Retail sales were up strongly in 1994
from year-earlier figures. Delay or slowdown in recovery will adversely affect
State revenues.

Certain California Municipal Obligations may be obligations of issuers which
rely in whole or in part, directly or indirectly, on ad valorem property taxes
as a source of revenue. The taxing powers of California local governments and
districts are limited by Article XIIIA of the California Constitution, enacted
by the voters in 1978 and commonly known as "Proposition 13." Briefly,
Article XIIIA limits to 1% of full cash value the rate of ad valorem property
taxes on real property and generally restricts the reassessment of property to
2% per year, except upon new construction or change of ownership (subject to a
number of exemptions). Taxing entities may, however, raise ad valorem taxes
above the 1% limit to pay debt service on voter-approved bonded indebtedness.

Under Article XIIIA, the basic 1% ad valorem tax levy is applied against the
assessed value of property as of the owner's date of acquisition (or as of
March 1, 1975, if acquired earlier), subject to certain adjustments. This
system has resulted in widely varying amounts of tax on similarly situated
properties. Several lawsuits have been filed challenging the acquisition-based
assessment system of Proposition 13, and on June 18, 1992 the U.S. Supreme
Court announced a decision upholding Proposition 13.

Article XIIIA prohibits local governments from raising revenues through ad
valorem property taxes above the 1% limit; it also requires voters of any
governmental unit to give two-thirds approval to levy any "special
tax." Court decisions, however, allowed non-voter approved levy of "
general taxes" which were not dedicated to a specific use. In response to
these decisions, the voters of the State in 1986 adopted an initiative statute
which imposed significant new limits on the ability of local entities to raise
or levy general taxes, except by receiving majority local voter approval.
Significant elements of this initiative, "Proposition 62," have been
overturned in recent court cases. An initiative proposed to re-enact the
provisions of Proposition 62 as a constitutional amendment was defeated by the
voters in November 1990, but such a proposal may be renewed in the future.

California and its local governments are subject to an annual "
appropriations limit" imposed by Article XIIIB of the California
Constitution, enacted by the voters in 1979 and significantly amended by
Propositions 98 and 111 in 1988 and 1990, respectively. Article XIIIB
prohibits the State or any covered local government from spending "
appropriations subject to limitation" in excess of the appropriations
limit imposed. "Appropriations subject to limitation" are
authorizations to spend "proceeds of taxes," which consists of tax
revenues and certain other funds, including proceeds from regulatory licenses,
user charges or other fees, to the extent that such proceeds exceed the cost
of providing the product or service, but "proceeds of taxes" excludes
most State subventions to local governments. No limit is imposed on
appropriations of funds which are not "proceeds of taxes," such as
reasonable user charges or fees and certain other non-tax funds, including
Security proceeds.

Among the expenditures not included in the Article XIIIB appropriations limit
are (1) the debt service cost of bonds issued or authorized prior to January
1, 1979, or subsequently authorized by the voters, (2) appropriations arising
from certain emergencies declared by the Governor, (3) appropriations for
certain capital outlay projects, (4) appropriations by the State of post-1989
increases in gasoline taxes and vehicle weight fees, and (5) appropriations
made in certain cases of emergency.

The appropriations limit for each year is adjusted annually to reflect changes
in cost of living and population, and any transfers of service
responsibilities between government units. The definitions for such
adjustments were liberalized in 1990 by Proposition 111 to follow more closely
growth in California's economy.

"Excess" revenues are measured over a two-year cycle. With respect to
local governments, excess revenues must be returned by a revision of tax rates
or fee schedules within the two subsequent fiscal years. The appropriations
limit for a local government may be overridden by referendum under certain
conditions for up to four years at a time. With respect to the State, 50% of
any excess revenues is to be distributed to K-12 school districts and
community college districts (collectively, "K-14 districts" ) and the
other 50% is to be refunded to taxpayers. With more liberal annual adjustment
factors since 1988, and depressed revenues since 1990 because of the
recession, few governments, including the State, are currently operating near
their spending limits, but this condition may change over time. Local
governments may, by voter approval, exceed their spending limits for up to
four years.

Because of the complex nature of Articles XIIIA and XIIIB of the California
Constitution, the ambiguities and possible inconsistencies in their terms, and
the impossibility of predicting future appropriations or changes in population
and cost of living, and the probability of continuing legal challenges, it is
not currently possible to determine fully the impact of Article XIIIA or
Article XIIIB on California Municipal Obligations or on the ability of
California or local governments to pay debt service on such California
Municipal Obligations. It is not presently possible to predict the outcome of
any pending litigation with respect to the ultimate scope, impact or
constitutionality of either Article XIIIA or Article XIIIB, or the impact of
any such determinations upon State agencies or local governments, or upon
their ability to pay debt service on their obligations. Future initiative or
legislative changes in laws or the California Constitution may also affect the
ability of the State or local issuers to repay their obligations.

Under the California Constitution, debt service on outstanding general
obligation bonds is the second charge to the General Fund after support of the
public school system and public institutions of higher education. Total
outstanding general obligation Security and lease purchase debt of the State
increased from $9.4 billion at June 30, 1987 to $23.5 billion at June 30,
1994. In FY 1993-94, debt service on general obligation bonds and lease
purchase debt was approximately 5.2% of General Fund revenues.

The principal sources of General Fund revenues in 1993-94 were the California
personal income tax (44% of total revenues), the sales tax (35%), bank and
corporation taxes (12%), and the gross premium tax on insurance (3%).
California maintains a Special Fund for Economic Uncertainties (the "
Economic Uncertainties Fund" ), derived from General Fund revenues, as a
reserve to meet cash needs of the General Fund.

Throughout the 1980's, State spending increased rapidly as the State
population and economy also grew rapidly, including increased spending for
many assistance programs to local governments, which were constrained by
Proposition 13 and other laws. The largest State program is assistance to
local public school districts. In 1988, an initiative (Proposition 98) was
enacted which (subject to suspension by a two-thirds vote of the Legislature
and the Governor) guarantees local school districts and community college
districts a minimum share of State General Fund revenues (currently about
33%).

Since the start of 1990-91 Fiscal Year, the State has faced adverse economic,
fiscal and budget conditions. The economic recession seriously affected State
tax revenues. It also caused increased expenditures for health and welfare
programs. The State is also facing a structural imbalance in its budget with
the largest programs supported by the General Fund (education, health, welfare
and corrections) growing at rates significantly higher than the growth rates
for the principal revenue sources of the General Fund. These structural
concerns will be exacerbated in coming years by the expected need to
substantially increase capital and operating funds for corrections as a result
of a "Three Strikes" law enacted in 1994.

As a result of these factors, among others, from the late 1980's until
1992-1993, the State had a period of nearly chronic budget imbalance, with
expenditures exceeding revenues in four out of six years, and the State
accumulated and sustained a budget deficit in the budget reserve, the Special
Fund for Economic Uncertainties ("SFEU" ) approaching $2.8 billion at
its peak at June 30, 1993. Starting in the 1990-91 Fiscal Year and for each
year thereafter, each budget required multibillion dollar actions to bring
projected revenues and expenditures into balance and to close large "
budget gaps" which were identified. The Legislature and Governor
eventually agreed on a number of different steps to produce Budget Acts in the
years 1991-92 to 1994-95, including: significant cuts in health and welfare
program expenditures; transfers of program responsibilities and funding from
the State to local governments, coupled with some reduction in mandates on
local government; transfer of about $3.6 billion in annual local property tax
revenues from cities, counties, redevelopment agencies and some other
districts to local school districts, thereby reducing State funding for
schools; reduction in growth of support for higher education programs, coupled
with increases in student fees; revenue increases (particularly in the 1992-93
Fiscal Year budget), most of which were for a short duration; increased
reliance on aid from the federal government to offset the costs of
incarcerating, educating and providing health and welfare services to
undocumented aliens (although these efforts have produced much less federal
aid than the State Administration has requested) and various on-time
adjustments and accounting changes.

Despite these budget actions, the effects of the recession led to large,
unanticipated deficits in the SFEU, as compared to projected positive
balances. By the start of the 1993-94 Fiscal Year, the accumulated deficit was
so large (almost $2.8 billion) that it was impractical to budget to retire it
in one year, so a two-year program was implemented, using the issuance of
revenue anticipation warrants to carry a portion of the deficit over the end
of the fiscal year. When the economy failed to recover sufficiently in
1993-94, a second two-year plan was implemented in 1994-95, to carry the final
retirement of the deficit into 1995-96.

The combination of stringent budget actions cutting State expenditures, and
the turnaround of the economy by late 1993, finally led to the restoration of
positive financial results. While General Fund revenues and expenditures were
essentially equal in FY 1992-93 (following two years of excess expenditures
over revenues), the General Fund had positive operating results in FY 1993-94
and 1994-95, which have reduced the accumulated budget deficit to around $600
million as of June 30, 1995.

A consequence of the accumulated budget deficits in the early 1990's, together
with other factors such as disbursement of funds to local school districts
"borrowed" from future fiscal years and hence not shown in the annual
budget, was to significantly reduce the State's cash resources available to
pay its ongoing obligations. When the Legislature and the Governor failed to
adopt a budget for the 1992-93 Fiscal Year by July 1, 1992, which would have
allowed the State to carry out its normal annual cash flow borrowing to
replenish its cash reserves, the State Controller was forced to issue
registered warrants ("IOUs" ) to pay a variety of obligations
representing prior years' or continuing appropriations, and mandates from
court orders. Available funds were used to make constitutionally-mandated
payments, such as debt service on bonds and warrants. Between July 1 and
September 4, 1992 the State Controller issued a total of approximately $3.8
billion of registered warrants. After that date, all remaining outstanding
registered warrants (about $2.9 billion) were called for redemptions from
proceeds of the issuance of 1992 Interim Notes after the budget was adopted.

The State's cash condition became so serious in late spring of 1992 that the
State Controller was required to issue revenue anticipation warrants maturing
in the following fiscal year in order to pay the State's continuing
obligations. The State was forced to rely increasingly on external debt
markets to meet its cash needs, as a succession of notes and warrants (both
forms of short-term cash flow financing) were issued in the period from June,
1992 to July, 1994, often needed to pay previously-maturing notes or warrants.
These borrowings were used also in part to spread out the repayment of the
accumulated budget deficit over the end of a fiscal year.

The State issued $7.0 billion of short-term debt in July, 1994 to meet its
cash flow needs and to finance the deferral of part of the accumulated budget
deficit to the 1995-96 fiscal year. In order to assure repayment of the $4
billion, 22-month part of this borrowing, the State enacted legislation (the
"Trigger Law" ) which can lead to automatic, across-the-board cuts in
General Fund expenditures in either the 1994-95 or 1995-96 fiscal years if
cash flow projections made at certain times during those years show
deterioration from the projections made in July 1994 when the borrowings were
made. On November 15, 1994, the State Controller as part of the Trigger Law
reported that the cash position of the General Fund on June 30, 1995 would be
about $580 million better than earlier projected, so no automatic budget
adjustments were required in 1994-95. The Controller's report showed that loss
of federal funds was offset by higher revenues, lower expenditures, and
certain other increases in cash resources.

For the first time in four years, the State entered the 1995-96 fiscal year
with strengthening revenues based on an improving economy. The major feature
of the Governor's proposed Budget, a 15% phased tax cut, was rejected by the
Legislature.

The 1995-96 Budget Act was signed by the Governor on August 3, 1995, 34 days
after the start of the fiscal year. The Budget Act projects General Fund
revenues and transfers of $44.1 billion. Expenditures are budgeted at $43.4
billion. The Department of Finance projects that, after repaying the last of
the carryover budget deficit, there will be a positive balance of less than
$30 million in the budget reserve, the Special Fund for Economic
Uncertainties, at June 30, 1996, providing no margin for adverse results
during the year.

The Department of Finance projects cash flow borrowings in the 1995-96 Fiscal
Year will be the smallest in many years, comprising about $2 billion of notes
to be issued in April, 1996, and maturing by June 30, 1996. With full payment
of $4 billion of revenue anticipation warrants on April 25, 1996, the
Department sees no further need for borrowing over the end of the fiscal year.
The Department projects that available cash resources to pay State obligations
will be almost $2 billion at June 30, 1996. This "cushion" will be
re-examined by the State Controller on October 15, 1995, in the third step in
the Budget Adjustment Law process. If the Controller believes the available
cash resources on June 30, 1996 will, in fact, be zero or less, her report
would start a process which could lead to automatic budget cuts starting in
December, 1995.

The principal features of the 1995-96 Budget Act, in addition to those noted
above, are additional cuts in health and welfare expenditures (some of which
are subject to approvals or waivers by the federal government); assumed
further federal aid for illegal immigrant costs; and an increase in per-pupil
funding for public schools and community colleges, the first such significant
increase in four years.

State general obligation bond ratings were reduced in July, 1994 to "
A1" by Moody's and "A" by S&P. Both of these ratings were reduced
from "AAA" levels which the State held until late 1991. There can be
no assurance that such ratings will be maintained in the future. It should be
noted that the creditworthiness of obligations issued by local California
issuers may be unrelated to the creditworthiness of obligations issued by the
State of California, and that there is no obligation on the part of the State
to make payment on such local obligations in the event of default.

The State is involved in certain legal proceedings (described in the State's
recent financial statements) that, if decided against the State, may require
the State to make significant future expenditures or may substantially impair
revenues. Trial courts have recently entered tentative decisions or
injunctions which would overturn several parts of the State's recent budget
compromises. The matters covered by these lawsuits include a deferral of
payments by the State to the Public Employees Retirement System, reductions in
welfare payments, and the use of certain cigarette tax funds for health costs.
All of these cases are subject to further proceedings and appeals, and if the
State eventually loses, the final remedies may not have to be implemented in
one year.

There are a number of State agencies, instrumentalities and political
subdivisions of the State that issue Municipal Obligations, some of which may
be conduit revenue obligations payable from payments from private borrowers.
These entities are subject to various economic risks and uncertainties, and
the credit quality of the securities issued by them may vary considerably from
the credit quality of the obligations backed by the full faith and credit of
the State.

Property tax revenues received by local governments declined more than 50%
following passage of Proposition 13. Subsequently, the California Legislature
enacted measures to provide for the redistribution of the State's General Fund
surplus to local agencies, the reallocation of certain State revenues to local
agencies and the assumption of certain governmental functions by the State to
assist municipal issuers to raise revenues. Total local assistance from the
State's General Fund was budgeted at approximately 75% of General Fund
expenditures in recent years, including the effect of implementing reductions
in certain aid programs. To reduce State General Fund support for school
districts, the 1992-93 and 1993-94 Budget Acts caused local governments to
transfer $3.9 billion of property tax revenues to school districts,
representing loss of the post-Proposition 13 "bailout" aid. The
largest share of these transfers came from counties, and the balance from
cities, special districts and redevelopment agencies. In order to make up this
shortfall, the Legislature proposed and voters approved in 1993 dedicating
0.5% of the sales tax to counties and cities for public safety purposes. In
addition, the Legislature has changed laws to relieve local governments of
certain mandates, allowing them to reduce costs.

To the extent the State should be constrained by its Article XIII
appropriations limit, or its obligation to conform to Proposition 98, or other
fiscal considerations, the absolute level, or the rate of growth, of State
assistance to local governments may be further reduced. Any such reductions in
State aid could compound the serious fiscal constraints already experienced by
many local governments, particularly counties. At lease one rural county
(Butte) publicly announced that it might enter bankruptcy proceedings in
August, 1990, although such plans were put off after the Governor approved
legislation to provide additional funds for the county. Other counties have
also indicated that their budgetary condition is extremely grave. The Richmond
Unified School District (Contra Costa County) entered bankruptcy proceedings
in May, 1991 but the proceedings have been dismissed. Los Angeles County, the
largest in the State, has reported severe fiscal problems, leading to a
nominal $1.2 billion deficit in its $11 billion budget for the 1995-96 Fiscal
Year. To balance the budget, the county has imposed severe cuts in services,
particularly for health care. The Legislature is considering actions to help
alleviate the County's fiscal problems, but none were completed before August
15, 1995. As a result of its bankruptcy proceedings (discussed further below)
Orange County also has implemented stringent cuts in services and has laid off
workers.

California Municipal Obligations which are assessment bonds may be adversely
affected by a general decline in real estate values or a slowdown in real
estate sales activity. In many cases, such bonds are secured by land which is
undeveloped at the time of issuance but anticipated to be developed within a
few years after issuance. In the event of such reduction or slowdown, such
development may not occur or may be delayed, thereby increasing the risk of a
default on the bonds. Because the special assessments or taxes securing these
bonds are not the personal liability of the owners of the property assessed,
the lien on the property is the only security for the bonds. Moreover, in most
cases the issuer of these bonds is not required to make payments on the bonds
in the event of delinquency in the payment of assessments or taxes, except
from amounts, if any, in a reserve fund established for the bonds.

Certain California long-term lease obligations, though typically payable from
the general fund of the municipality, are subject to "abatement" in
the event the facility being leased is unavailable for beneficial use and
occupancy by the municipality during the term of the lease. Abatement is not a
default, and there may be no remedies available to the holders of the
certificates evidencing the lease obligation in the event abatement occurs.
The most common cases of abatement are failure to complete construction of the
facility before the end of the period during which lease payments have been
capitalized and uninsured casualty losses to the facility (e.g., due to
earthquake). In the event abatement occurs with respect to a lease obligation,
lease payments may be interrupted (if all available insurance proceeds and
reserves are exhausted) and the certificates may not be paid when due.

Several years ago the Richmond Unified School District (the "District"
) entered into a lease transaction in which certain existing properties of the
District were sold and leased back in order to obtain funds to cover operating
deficits. Following a fiscal crisis in which the District's finances were
taken over by a State receiver (including a brief period under bankruptcy
court protection), the District failed to make rental payments on this lease,
resulting in a lawsuit by the Trustee for the Certificate of Participation
holders, in which the State was a named defendant (on the grounds that it
controlled the District's finances). One of the defenses raised in answer to
this lawsuit was the invalidity of the original lease transaction. The trial
court has upheld the validity of the District's lease, and the case has been
settled. Any judgment in any future case against the position asserted by the
Trustee in the Richmond case may have adverse implications for lease
transactions of a similar nature by other California entities.

The repayment of industrial development securities secured by real property
may be affected by California laws limiting foreclosure rights of creditors.
Bonds backed by health care and hospital revenues may be affected by changes
in State regulations governing cost reimbursements to health care providers
under Medi-Cal (the State's Medicaid program), including risks related to the
policy of awarding exclusive contracts to certain hospitals.

Limitations on ad valorem property taxes may particularly affect "tax
allocation" bonds issued by California redevelopment agencies. Such bonds
are secured solely by the increase in assessed valuation of a redevelopment
project area after the start of redevelopment activity. In the event that
assessed values in the redevelopment project decline (e.g., because of a major
natural disaster such as an earthquake), the tax increment revenue may be
insufficient to make principal and interest payments on these bonds. Both
Moody's and S&P suspended ratings on California tax allocation bonds after the
enactment of Articles XIIIA and XIIIB, and only resumed such ratings on a
selective basis.

Proposition 87, approved by California voters in 1988, requires that all
revenues produced by a tax rate increase go directly to the taxing entity
which increased such tax rate to repay that entity's general obligation
indebtedness. As a result, redevelopment agencies (which, typically, are the
Issuers of tax allocation securities) no longer receive an increase in tax
increment when taxes on property in the project area are increased to repay
voter-approved bonded indebtedness.

The effect of these various constitutional and statutory changes upon the
ability of California municipal securities issuers to pay interest and
principal on their obligations remains unclear. Furthermore, other measures
affecting the taxing or spending authority of California or its political
subdivisions may be approved or enacted in the future. Legislation has been or
may be introduced which would modify existing taxes or other revenue-raising
measures or which either would further limit or, alternatively, would increase
the abilities of state and local governments to impose new taxes or increase
existing taxes. It is not presently possible to determine the impact of any
such legislation on California Municipal Obligations in which the Fund may
invest, future allocations of state revenues to local governments or the
abilities of state or local governments to pay the interest on, or repay the
principal of, such California Municipal Obligations.

Substantially all of California is within an active geologic region subject to
major seismic activity. Northern California in 1989 and Southern California in
1994 experienced major earthquakes causing billions of dollars in damages. The
federal government provided more than $1.8 billion in aid for both
earthquakes, and neither event is expected to have any long-term negative
economic impact. Any California Municipal Obligation in the Portfolio could be
affected by an interruption of revenues because of damaged facilities, or,
consequently, income tax deductions for casualty losses or property tax
assessment reductions. Compensatory financial assistance could be constrained
by the inability of (i) an issuer to have obtained earthquake insurance
coverage at reasonable rates; (ii) an insurer to perform on its contracts of
insurance in the event of widespread losses; or (iii) the Federal or State
government to appropriate sufficient funds within their respective budget
limitations.

On January 17, 1994, a major earthquake with an estimated magnitude 6.8 on the
Richter scale struck the Los Angeles area, causing significant property damage
to public and private facilities, presently estimated at $15-20 billion. While
over $9.5 billion of federal aid, and a projected $1.9 billion of State aid,
plus insurance proceeds, will reimburse much of that loss, there will still be
some ultimate loss of health and income in the region, in addition to costs of
the disruption caused by the event. Short-term economic projections are
generally neutral, as the infusion of aid will restore billions of dollars to
the local economy within a few months; already the local construction industry
has picked up. Although the earthquake will hinder recovery from the recession
in Southern California, already hard-hit, its long-term impact is not expected
to be material in the context of the overall wealth of the region. There are
few remaining effects of the 1989 Loma Prieta earthquake in northern
California (which, however, caused less severe damage than Northridge).

On December 7, 1994, Orange County, California (the "County" ),
together with its pooled investment fund (the "Pools" ) filed for
protection under Chapter 9 of the federal Bankruptcy Code, after reports that
the Pools had suffered significant market losses in its investments caused a
liquidity crisis for the Pools and the County. Approximately 180 other public
entities, most but not all located in the County, were also depositors in the
Pools. The County estimated the Pools' loss at about $1.64 billion, or 23%, of
its initial deposits of around $7.5 billion. Many of the entities which kept
moneys in the Pools, including the County, faced cash flow difficulties
because of the bankruptcy filing and may be required to reduce programs or
capital projects. Moody's and Standard & Poor's have suspended, reduced to
below investment grade levels, or placed on "Credit Watch" various
securities of the County and the entities participating in the Pools.

On May 2, 1995, the Bankruptcy Court approved a settlement agreement covering
claims of the other participating entities against the County and the Pools.
Most participants have received in cash 80% (90% for school districts) of
their Pools' investment; the balance is to be paid in the future. The County
succeeded in deferring, by consent, until June 30, 1996, the repayment of $800
million of short-term obligations due in July and August, 1995; these notes
are, however, considered to be in default by Moody's and S&P. On June 27,
1995, County voters turned down a proposal for a temporary 0.5% increase in
the local sales tax, making the County's fiscal recovery much harder.

The State of California has no obligation with respect to any obligations or
securities of the County or any of the other participating entities, although
under existing legal precedents, the State may be obligated to ensure that
school districts have sufficient funds to operate. All school districts were
able to meet their obligations in the 1994-95 Fiscal Year.

Estimated Cash Flows to Unitholders

The tables below set forth the per Unit estimated monthly and semi-annual
distributions of interest and principal to Unitholders. The tables assume no
changes in expenses, no changes in the current interest rates, no exchanges,
redemptions, sales or prepayments of the underlying Bonds prior to maturity or
expected retirement date and the receipt of principal upon maturity or
expected retirement date. To the extent the foregoing assumptions change
actual distributions will vary.

California IM-IT

Monthly

<TABLE>
<CAPTION>
Distribution Estimated Estimated Estimated
Dates (Each Interest Principal Total
Month)
- -------------- ---------- ----------- -----------
<S> <C> <C> <C>
</TABLE>

Semi-annual

<TABLE>
<CAPTION>
Estimated Estimated Estimated
Interest Principal Total

- ------- ---------- ---------- -----------
<S> <C> <C>
</TABLE>
Contents of Registration Statement

This Registration Statement comprises the following papers and documents:

The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, rating services and
legal counsel

The following exhibits:

1.1 Trust Agreement (to be supplied by amendment).

1.4 Copy of municipal bond fund portfolio insurance policy (to be
supplied by amendment).

1.5 Agreement Among Underwriters (to be supplied by amendment).

3.1 Opinion and consent of counsel as to legality of securities being
registered (to be supplied by amendment).

3.2 Opinion and consent of counsel as to Federal income tax status of
securities being registered (to be supplied by amendment).

3.3 Opinion and consent of counsel as to New York tax status of
securities being registered (to be supplied by amendment).

4.1 Consent of Interactive Data Corporation (to be supplied by
amendment).

4.2 Consent of Standard & Poor's (to be supplied by amendment).

4.3 Consent of Grant Thornton LLP (to be supplied by amendment).

Signatures

Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Insured Municipals Income Trust and Investors' Quality Tax-
Exempt Trust, Multi-Series 300 has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Chicago and State of Illinois on
the 4th day of December, 1997.

Insured Municipals Income Trust and
Investors' Quality Tax-Exempt
Trust, Multi-Series 300
(Registrant)

By Van Kampen American Capital
Distributors, Inc.
(Depositor)

By Gina M. Costello
Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on December 4, 1997 by the
following persons who constitute a majority of the Board of Directors of
Van Kampen American Capital Distributors, Inc.

Signature Title

Don G. Powell Chairman and Chief Executive )
Officer )

William R. Molinari President and Chief )
Operating Officer )

Ronald A. Nyberg Executive Vice President )
and General Counsel

William R. Rybak Executive Vice President and )
Chief Financial Officer )
Gina M. Costello
(Attorney-in-fact*)
_______________________________________________________________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Van Kampen American Capital Equity
Opportunity Trust, Series 64 (file No. 33-33087) and the same are hereby
incorporated herein by this reference.