<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1996
REGISTRATION NO. 333-03141
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
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:
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
B. NAME OF DEPOSITOR:
EVEREN UNIT INVESTMENT TRUSTS,
a service of EVEREN Securities, Inc.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
EVEREN UNIT INVESTMENT TRUSTS
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE: Copy to:
ROBERT K. BURKE MARK J. KNEEDY
77 West Wacker Drive, 29th Floor c/o Chapman and Cutler
Chicago, Illinois 60601 111 West Monroe Street
Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE AND AMOUNT OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES BEING REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series An indefinite number of Indefinite $500 (previously paid)
47 Units of Beneficial Inter-
est pursuant to Rule 24f-2
under the Investment Com-
pany Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
[X] Check box if it is proposed that this filing will become effective at
2:00 P.M. on May 8, 1996 pursuant to paragraph (b) of Rule 487.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a) may determine.
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
----------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<C> <S> <C>
1. (a)Name of trust................... Prospectus front cover
(b)Title of securities issued...... Essential Information
2. Name and address of each depositor. General Information--Administration of
the Trusts
3. Name and address of trustee........
4. Name and address of principal Public Offering of Units--Public
underwriters...................... Distribution of Units; The Tax-Exempt
Portfolios--Underwriting
5. State of organization of trust..... The Trust Funds
6. Execution and termination of trust The Trust Funds; General Information--
agreement......................... Administration of the Trusts
7. Changes of name.................... The Trust Funds
8. Fiscal year........................ *
9. Litigation.........................
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a)Registered or bearer securities. General Information--Unitholders
(b)Cumulative or distributive
securities........................ The Trust Funds
(c)Redemption...................... General Information--Redemption
(d)Conversion, transfer, etc....... General Information--Unitholders;
General Information--Market for Units
(e)Periodic payment plan........... *
(f)Voting rights................... General Information--Unitholders
General Information--Investment
Supervision; General Information--
(g)Notice of certificateholders.... Administration of the Trusts; General
Information--Unitholders
(h)Consents required............... General Information--Unitholders;
General Information--Administration of
the Trusts
(i)Other provisions................ The Insured Corporate Series--Federal
Tax Status; The U.S. Treasury
Portfolio Series
--Federal Tax Status; The Tax-Exempt
Portfolios--Federal Tax Status; The
Insured Corporate Series--Insurance on
the Bonds; The Tax-Exempt Portfolios--
Insurance on the Bonds
Type of securities comprising The Trust Funds; General Information--
11. units............................. Trust Information
12. Certain information regarding peri-
odic payment
certificates...................... *
Essential Information; Public Offering
of Units; General Information--
13. (a) Load, fees, expenses, etc...... Interest, Estimated Long-Term Return
and Estimated Current Return; General
Information--Expenses of the Trusts
</TABLE>
- --------
* Inapplicable, answer negative or not required.
i
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<C> <S> <C>
(b)Certain information regarding
periodic payment certifi-
cates....................... *
(c)Certain percentages........... Essential Information; Public Offering
of Units
(d)Certain other fees, etc. pay-
able by holders............. General Information--Unitholders
(e)Certain profits receivable by
depositor, principal under-
writers, trustee or affili- General Information--Expenses of the
ated persons................ Trusts; Public Offering of Units
(f)Ratio of annual charges to in-
come........................ *
The Trust Funds;
14. Issuance of trust's securities... General Information--Unitholders
15. Receipt and handling of payments
from purchasers................. *
16. Acquisition and disposition of The Trust Funds; General Information--
underlying securities........... Trust Information; General
Information--Investment Supervision
General Information--Market for Units;
General Information--Redemption;
17. Withdrawal or redemption......... Public Offering of Units
18. (a)Receipt, custody and disposi-
tion of income.............. General Information--Unitholders
(b)Reinvestment of distributions. General Information--Distribution
Reinvestment
(c)Reserves or special funds..... General Information--Expenses of the
Trusts
(d)Schedule of distributions..... *
General Information--Unitholders;
19. Records, accounts and reports.... General Information--Redemption;
General Information--Administration of
the Trusts
20. Certain miscellaneous provisions
of trust agreement
(a)Amendment..................... General Information--Administration of
the
(b)Termination................... Trusts
(c)and (d) Trustee, removal and General Information--Administration of
successor................... the Trusts
(e)and (f) Depositor, removal and General Information--Administration of
successor................... the Trusts
21. Loans to security holders........ *
22. Limitations on liability......... General Information--Administration of
the Trusts
23. Bonding arrangements............. *
24. Other material provisions of
trust agreement................. *
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor........ General Information--Administration of
the Trusts
26. Fees received by depositor....... See Items 13(a) and 13(e)
27. Business of depositor............ General Information--Administration of
the Trusts
28. Certain information as to offi-
cials and affiliated persons of General Information--Administration of
depositor....................... the Trusts
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<C> <S> <C>
29. Voting securities of depos- General Information--Administration of the
itor...................... Trusts
30. Persons controlling deposi-
tor.......................
31. Payment by depositor for
certain services rendered
to trust..................
32. Payment by depositor for *
certain other services
rendered to trust.........
33. Remuneration of employees
of depositor for certain
services rendered to
trust.....................
34. Remuneration of other per-
sons for certain services
rendered to trust.........
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's se- Public Offering of Units
curities by states........
36. Suspension of sales of *
trust's securities........
37. Revocation of authority to
distribute................
38. (a)Method of distribution.. Public Offering of Units;
(b)Underwriting agreements. General Information--Market for Units;
(c)Selling agreements...... Public Offering of Units
39. (a)Organization of princi-
pal underwriters..........
(b)N.A.S.D. membership of General Information--Administration
principal underwriters.... of the Trusts
40. Certain fees received by See Items 13(a) and 13(e)
principal underwriters....
41. (a)Business of principal General Information--Administration
underwriters.............. of the Trusts
(b)Branch offices of prin-
cipal underwriters........
(c)Salesmen of principal *
underwriters..............
42. Ownership of trust's secu-
rities by certain persons.
43. Certain brokerage commis-
sions received by princi-
pal underwriters.......... Public Offering of Units
44. (a)Method of valuation..... Public Offering of Units
(b)Schedule as to offering *
price.....................
(c)Variation in offering Public Offering of Units
price to certain persons..
45. Suspension of redemption General Information--Redemption
rights....................
46. (a)Redemption valuation.... General Information--Redemption;
General Information--Market for Units;
Public Offering of Units
(b)Schedule as to redemp- *
tion price................
General Information--Market for Units;
47. Maintenance of position in Public Offering of Units;
underlying securities..... General Information--Redemption
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation General Information--Administration
of trustee................ of the Trusts
49. Fees and expenses of trust-
ee........................
50. Trustee's lien............. General Information--Expenses of the Trusts
</TABLE>
- --------
* Inapplicable, answer negative or not required.
iii
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<C> <S> <C>
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. Insurance of holders of trust's Cover Page; General Information--
securities.................. Expenses of the Trusts; The Insured
Corporate Series--Insurance on the Bonds;
The Tax-Exempt Portfolios--Insurance on
the Bonds
VII. POLICY OFPREGISTRANT
52. (a) Provisions of trust agreement The Trust Funds; General Information--
with respect to selection or Trust Information; General
elimination of underlying se- Information--Investment Supervision
curities.....................
(b) Transactions involving elimi-
nation of underlying securi-
ties......................... *
(c) Policy regarding substitution
or elimination of underlying General Information--Investment
securities................... Supervision; General Information--
Trust Information
(d) Fundamental policy not other-
wise covered................. *
Essential Information; General
Information--Trust Information; The
U.S. Treasury Portfolio Series--
53. Tax status of Trust.............. Federal Tax Status; The Insured
Corporate Series--Federal Tax Status;
The Tax-Exempt Portfolios--Federal
Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last
ten years.......................
55.
56. Certain information regarding pe-
riodic payment certificates..... *
57.
58.
59. Financial statements (Instruction
1(c) to Form S-6)............... *
</TABLE>
- --------
* Inapplicable, answer negative or not required.
iv
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
Insured Corporate Series 9 and Insured Corporate Series 10 (the "Insured
Corporate Series" or the "Insured Trusts") were formed for the purpose of
providing a high level of current income through investment in a fixed
portfolio consisting primarily of corporate debt obligations issued after July
18, 1994 by utility companies. Each Insured Corporate Series may contain zero
coupon U.S. Treasury Obligations. FOR FOREIGN INVESTORS WHO ARE NOT U.S.
CITIZENS OR RESIDENTS, INTEREST INCOME FROM EACH TRUST MAY NOT BE SUBJECT TO
FEDERAL WITHHOLDING TAXES IF CERTAIN CONDITIONS ARE MET. SEE "THE INSURED
CORPORATE SERIES--FEDERAL TAX STATUS."
U.S. Treasury Portfolio Series 17 and Series 18 (the "U.S. Treasury
Portfolios") were formed for the purpose of providing safety of capital and
investment flexibility through an investment in a portfolio of U.S. Treasury
Obligations that are backed by the full faith and credit of the United States
government. Units of the Trust are rated "AAA" by Standard & Poor's. Interest
income, if any, distributed by the Trust is exempt from state personal income
taxes in all states. The U.S. Treasury Portfolios may be available to non-
resident aliens and the income from such Trust, provided certain conditions
are met, will be exempt from withholding for U.S. federal income tax for such
foreign investors. A FOREIGN INVESTOR MUST PROVIDE A COMPLETED W-8 FORM TO HIS
FINANCIAL REPRESENTATIVE OR THE TRUSTEE TO AVOID WITHHOLDING ON HIS ACCOUNT.
The value of the Units, the estimated current return and the estimated long-
term return to new purchasers will fluctuate with the value of the portfolio
which will generally decrease inversely with changes in interest rates.
Insured Michigan Series 14 (the "Insured State Trust," a "Tax-Exempt
Portfolio" or an "Insured Trust") was formed for the purpose of gaining
interest income free from Federal income taxes and State and local income
taxes and/or property taxes while conserving capital and diversifying risks by
investing in an insured, fixed portfolio consisting of obligations issued by
or on behalf of the State for which such Trust Fund is named or counties,
municipalities, authorities or political subdivisions thereof.
Units of the Trusts are not deposits or obligations of, or guaranteed by, any
bank, and Units are not federally insured or otherwise protected by the
Federal Deposit Insurance Corporation and involve investment risk including
loss of principal. The use of the term "Insured" in the name of a Trust does
not mean that the Units of the Trust are insured by any governmental or
private organization. The Units are not insured.
Insurance guaranteeing the scheduled payment of principal and interest on all
of the Bonds in the portfolio of each Insured Trust (other than any U.S.
Treasury Obligations) has been obtained directly by the issuer or the Sponsor
from MBIA Insurance Corporation or other insurers. See "Insurance on the
Bonds" for each Insured Trust. Insurance obtained by a Bond issuer is
effective so long as such Bonds are outstanding. THE INSURANCE DOES NOT RELATE
TO THE UNITS OF THE INSURED TRUSTS OFFERED HEREBY OR TO THEIR MARKET VALUE. As
a result of such insurance, the Units of the Insured Trusts have received a
rating of "AAA" by Standard & Poor's, a division of The McGraw-Hill Companies,
("Standard & Poor's"). See "Insurance on the Bonds" for each Insured Trust. No
representation is made as to any insurer's ability to meet its commitments.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future
reference.
THE DATE OF THIS PROSPECTUS IS MAY 8, 1996.
<PAGE>
SUMMARY
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of a Trust Fund
during the initial offering period is equal to a pro rata share of the
offering prices of the Securities in such Trust Fund plus or minus a pro rata
share of cash, if any, in the Principal Account held or owned by such Trust
Fund, plus accrued interest plus that sales charge indicated under "Essential
Information." The secondary market Public Offering Price per Unit will be
based upon a pro rata share of the bid prices of the Securities in each Trust
Fund plus or minus a pro rata share of cash, if any, in the Principal Account
held or owned by such Trust Fund, plus accrued interest plus the applicable
sales charge indicated under "Public Offering of Units--Public Offering
Price." The sales charge is reduced on a graduated scale for sales involving
at least $100,000 or 10,000 Units and will be applied on whichever basis is
more favorable to the investor. The minimum purchase for each Trust is $1,000.
INTEREST AND PRINCIPAL DISTRIBUTIONS. Distributions of the estimated annual
interest income to be received by each Trust Fund, after deduction of
estimated expenses, will be made monthly. See "Essential Information."
Distributions of funds, if any, in the Principal Account will be made as
provided in "General Information--Unitholders--Distributions to Unitholders."
REINVESTMENT. Each Unitholder of a Trust Fund offered herein may elect to have
distributions of principal or interest or both automatically invested without
charge in shares of certain mutual funds sponsored by Zurich Kemper
Investments, Inc. See "General Information--Distribution Reinvestment."
ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN. As of the opening of
business on the Initial Date of Deposit, the Estimated Long-Term Return and
the Estimated Current Return, if applicable, for each Trust were as set forth
in "Essential Information." The Estimated Current Return is calculated by
dividing the estimated net annual interest income per Unit by the Public
Offering Price. The estimated net annual interest income per Unit will vary
with changes in fees and expenses of the Trustee, the Sponsor and Evaluator
and with the principal prepayment, redemption, maturity and exchange or sale
of Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities and with changes in the accrued
interest; therefore, there is no assurance that the present Estimated Current
Return will be realized in the future. Estimated Long-Term Return is
calculated using a formula which (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 or average lives of all of the Securities
in the applicable Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements or average lives of the Securities 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. Estimated Current Return and Estimated Long-
Term Return are expected to differ because the calculation of Estimated Long-
Term Return reflects the estimated date and amount of principal returned while
Estimated Current Return calculations include only net annual interest income
and Public Offering Price.
MARKET FOR UNITS. After the initial offering period, while under no obligation
to do so, the Sponsor intends to, and certain Underwriters may, maintain a
market for the Units and to offer to repurchase such Units at prices subject
to change at any time which are based on the aggregate bid side evaluation of
the Securities in a Trust plus accrued interest.
RISK FACTORS. An investment in the Trusts should be made with an understanding
of the risks associated therewith, including, among other factors, the
inability of the issuer or an insurer to pay the principal of or interest on a
security when due, volatile interest rates, early call provisions, and changes
to the tax status of the Securities. See "The Insured Corporate Series--Risk
Factors", "The U.S. Treasury Portfolio Series--Risk Factors" and "The Tax-
Exempt Portfolios--Municipal Bond Risk Factors."
2
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
ESSENTIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT
SPONSOR AND EVALUATOR: EVEREN UNIT INVESTMENT TRUSTS, A SERVICE OF
EVEREN SECURITIES, INC.
TRUSTEE:
THE BANK OF NEW YORK
The income, expense and distribution data set forth below has been calculated
for Unitholders purchasing less than 10,000 Units of a Trust (less than 50,000
Units of a U.S. Treasury Portfolio). Unitholders purchasing 10,000 Units or
more of a Trust (50,000 Units or more of a U.S. Treasury Portfolio) will
receive a slightly higher return because of the reduced sales charge for
larger purchases.
<TABLE>
<CAPTION>
U.S. U.S.
INSURED INSURED TREASURY TREASURY INSURED
CORPORATE CORPORATE PORTFOLIO PORTFOLIO MICHIGAN
SERIES 9 SERIES 10 SERIES 17 SERIES 18 SERIES 14
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Public Offering Price
per Unit (1)(2)........ $ 9.875 $ 9.873 $ 10.048 $ 10.046 $ 9.944
Principal Amount of
Securities per Unit.... $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000
Estimated Current Return
based on Public
Offering
Price (3)(4)(5)(6)..... 6.36% 7.30% 5.60% 5.98% 5.48%
Estimated Long-Term
Return (3)(4)(5)(6).... 6.55% 7.41% 5.59% 6.04% 5.54%
Estimated Normal Annual
Distribution per
Unit (6)............... $ 0.62800 $ 0.72031 $ 0.56260 $ 0.60065 $ 0.54480
Principal Amount of
Securities............. $ 1,350,000 $ 1,300,000 $ 500,000 $ 500,000 $ 2,655,000
Number of Units......... 135,000 130,000 50,000 50,000 265,500
Fractional Undivided
Interest per Unit...... 1/135,000 1/130,000 1/50,000 1/50,000 1/265,500
Calculation of Public
Offering Price:
Aggregate Offering
Price of Securities... $ 1,281,135 $ 1,220,621 $ 493,623 $ 492,510 $ 2,510,841
Aggregate Offering
Price of Securities
per Unit.............. $ 9.490 $ 9.389 $ 9.872 $ 9.850 $ 9.457
Plus Sales Charge per
Unit (7).............. $ 0.385 $ 0.484 $ 0.176 $ 0.196 $ 0.487
Public Offering Price
per Unit (1)(2)....... $ 9.875 $ 9.873 $ 10.048 $ 10.046 $ 9.944
Redemption Price per
Unit................... $ 9.390 $ 9.289 $ 9.847 $ 9.825 $ 9.389
Sponsor's Initial
Repurchase Price per
Unit................... $ 9.490 $ 9.389 $ 9.872 $ 9.850 $ 9.457
Excess of Public
Offering Price per Unit
over Redemption Price
per Unit............... $ 0.485 $ 0.584 $ 0.201 $ 0.221 $ 0.555
Excess of Public
Offering Price per Unit
over Sponsor's Initial
Repurchase Price per
Unit................... $ 0.385 $ 0.484 $ 0.176 $ 0.196 $ 0.487
Calculation of Estimated
Net Annual Interest
Income per Unit (6):
Estimated Annual
Interest Income....... $ 0.65000 $ 0.74231 $ 0.57680 $ 0.61466 $ 0.56770
Less: Estimated Annual
Expense............... $ 0.02200 $ 0.02200 $ 0.01420 $ 0.01400 $ 0.02290
Estimated Net Annual
Interest Income....... $ 0.62800 $ 0.72031 $ 0.56260 $ 0.60066 $ 0.54480
Estimated Daily Rate of
Net Interest Accrual
per Unit............... $0.001744440 $0.002000860 $0.001562780 $0.001668500 $0.001513330
Minimum Principal Value
of the Trust under
which Trust Agreement
may be terminated (8).. $ 270,000 $ 260,000 $ 100,000 $ 100,000 $ 531,000
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are made as
of the close of business of the Sponsor (currently 3:15 p.m. Central Time)
next following receipt of an order for a sale or purchase of Units or receipt
by The Bank of New York of Units tendered for redemption.
3
<PAGE>
ESSENTIAL INFORMATION--(CONTINUED)
<TABLE>
<CAPTION>
U.S. U.S.
INSURED INSURED TREASURY TREASURY INSURED
CORPORATE CORPORATE PORTFOLIO PORTFOLIO MICHIGAN
SERIES 9 SERIES 10 SERIES 17 SERIES 18 SERIES 14
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Trustee's Annual Fee per
$1,000 principal amount
of Securities (9)....... $ 1.350 $ 1.350 $ 0.820 $ 0.800 $ 1.280
Reduction of Trustee's
fee per Unit during the
first year (6).......... N/A N/A N/A N/A $0.00160
Estimated annual interest
income per Unit during
the first year (6)...... $0.65000 $0.74231 $0.57680 $0.61466 $0.56610
Interest Payments (10):
First Payment per Unit,
representing 18 days... $0.03140 $0.03602 $0.02813 $0.03003 $0.02724
Estimated Normal Monthly
Distribution per Unit.. $0.05233 $0.06003 $0.04688 $0.05005 $0.04540
Estimated Normal Annual
Distribution per Unit.. $0.62800 $0.72031 $0.56260 $0.60065 $0.54480
Sales Charge (7):
As a percentage of
Public Offering Price
per Unit............... 3.900% 4.900% 1.750% 1.950% 4.900%
As a percentage of net
amount invested........ 4.057% 5.155% 1.783% 1.990% 5.150%
As a percentage of net
amount invested in
earning assets......... 4.057% 5.155% 1.783% 1.990% 5.150%
</TABLE>
<TABLE>
<S> <C>
Date of Trust
Agreements............. May 8, 1996
First Settlement Date... May 13, 1996
Mandatory Termination
Date................... December 31, 2027
Evaluator's Annual
Evaluation Fee--
U.S. Treasury
Portfolio.............. Maximum of $0.10 per $1,000 Principal Amount of Securities
Evaluator's Annual
Evaluation Fee--Insured
Corporate Series and
Tax-Exempt Portfolios.. Maximum of $0.30 per $1,000 Principal Amount of Securities
Sponsor's Annual
Surveillance Fee--
Insured Corporate
Series................. Maximum of $0.25 per $1,000 Principal Amount of Securities
Sponsor's Annual
Surveillance Fee--U.S.
Treasury Portfolio..... Maximum of $0.10 per $1,000 Principal Amount of Securities
Sponsor's Annual
Surveillance Fee--Tax-
Exempt Portfolios...... Maximum of $0.002 per Unit
</TABLE>
- ---------------------
(1) Anyone ordering Units for settlement after the First Settlement Date will
pay accrued interest from such date to the date of settlement (normally
three business days after order) less distributions from the Interest
Account subsequent to the First Settlement Date. For purchases settling on
the First Settlement Date, no accrued interest will be added to the Public
Offering Price.
(2) Many unit investment trusts issue a number of units such that each unit
represents approximately $1,000 principal amount of underlying securities.
The Sponsor, on the other hand, in determining the number of Units for
each Trust has elected not to follow this format but rather to provide
that number of Units which will establish as close as possible as of the
Initial Date of Deposit a Principal Amount of Securities per Unit of $10.
(3) The Estimated Current Return and Estimated Long-Term Return are increased
for transactions entitled to a reduced sales charge. See "Public Offering
of Units--Public Offering Price."
(4) The Estimated Current Returns are calculated by dividing the estimated net
annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in
fees and expenses of the Trustee, the Sponsor and the Evaluator and with
the principal prepayment, redemption, maturity, exchange or sale of
Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities and with changes in the
accrued interest; therefore, there is no assurance that the present
Estimated Current Returns indicated above will be realized in the future.
The Estimated Long-Term Returns are calculated using a formula which (1)
takes into consideration, and determines and factors in the relative
weightings of, the market values, yields (which takes into account the
amortization of premiums and the accretion of discounts) and estimated
retirement dates of all of the Securities in the applicable Trust and (2)
takes into account the expenses and sales charge associated with each
Trust Unit. Since the market values and estimated retirement dates of the
Securities and expenses of each Trust will change, there is no assurance
that the present Estimated Long-Term Returns as indicated above will be
realized in the future. The Estimated Current Returns and Estimated Long-
Term Returns are expected to differ because the calculation of the
Estimated Long-Term Returns reflects the estimated date and amount of
principal returned while the Estimated Current Return calculations include
only net annual interest income and Public Offering Price.
(5) This figure is based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in current
interest rates and with the principal prepayment, redemption, maturity,
call, exchange or sale of the underlying Securities. The estimated cash
flows to Unitholders for the Trusts are either set forth under "Estimated
Cash Flows to Unitholders" for each Trust or are available upon request at
no charge from the Sponsor.
4
<PAGE>
(6) During the first year, the Trustee has agreed to reduce its fee (and to
the extent necessary pay expenses of the Trust Funds) in the amounts
stated above. The Trustee has agreed to the foregoing to cover all or a
portion of the interest on any Securities accruing prior to their expected
dates of delivery, since interest will not accrue to the benefit of
Unitholders of a Trust Fund until such Securities are actually delivered
to the Trust Fund. The estimated net annual interest income per Unit will
remain as indicated. See "The Trust Funds" and "General Information--
Interest, Estimated Long-Term Return and Estimated Current Return."
(7) The sales charge as a percentage of the net amount invested in earning
assets will increase as accrued interest increases. Transactions subject
to quantity discounts (see "Public Offering of Units--Public Offering
Price") will have reduced sales charges, thereby reducing all percentages
in the table.
(8) The minimum principal value of each Trust (other than a Tax-Exempt
Portfolio) under which the Trust Agreement may be terminated is 40% of the
total aggregate principal amount of securities deposited in each such
Trust during the primary offering period. The minimum principal value of
each Tax-Exempt Portfolio under which the Trust Agreement may be
terminated is 20% of the initial aggregate principal amount of securities
deposited in such Trust.
(9) See "General Information--Expenses of the Trusts."
(10) Unitholders will receive interest distributions monthly. The Record Date
is the first day of the month, commencing June 1, 1996, and the
distribution date is the fifteenth day of the month, commencing June 15,
1996.
5
<PAGE>
- ---------------------
* Reference is made to the Trust Agreements, and any statements contained
herein are qualified in their entirety by the provisions of the Trust
Agreements.
THE TRUST FUNDS
EVEREN Unit Investment Trusts, Series 47 includes the following separate unit
investment trusts created by the Sponsor under the name EVEREN Unit Investment
Trusts: "Insured Corporate Series 9," "Insured Corporate Series 10," "U.S.
Treasury Portfolio Series 17" and "U.S. Treasury Portfolio Series 18"
(collectively, the "Trusts" or "Trust Funds"). Each of the Trust Funds is
separate and is designated by a different series number. Each of the Trust
Funds was created under the laws of the State of New York pursuant to a trust
indenture dated the Initial Date of Deposit (the "Trust Agreements") between
EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc. (the
"Sponsor") and The Bank of New York (the "Trustee").*
Insured Corporate Series 9 was formed for the purpose of providing a high
level of current income through investment in a fixed portfolio consisting
primarily of intermediate term corporate debt obligations issued after July
18, 1984 by utility companies.
Insured Corporate Series 10 was formed for the purpose of providing a high
level of current income through investment in a fixed portfolio consisting
primarily of long-term corporate debt obligations issued after July 18, 1984
by utility companies.
The U.S. Treasury Portfolios were formed for the purpose of providing safety
of capital and investment flexibility through an investment in a portfolio of
U.S. Treasury Obligations that are backed by the full faith and credit of the
United States government. The U.S. Treasury Portfolios were also formed for
the purpose of providing protection against changes in interest rates and also
passing through to Unitholders in all states the exemption from state personal
income taxes afforded to direct owners of U.S. obligations. The value of the
Units, the estimated current return and the estimated long-term return to new
purchasers will fluctuate with the value of the Securities in the portfolio
which will generally decrease or increase inversely with changes in interest
rates.
The Insured State Trust was formed for the purpose of gaining interest income
free from Federal income taxes and State and local income and/or property
taxes while conserving capital and diversifying risks by investing in an
insured, fixed portfolio consisting of obligations issued by or on behalf of
the State for which such Trust Fund is named or counties, municipalities,
authorities or political subdivisions thereof.
There is, of course, no guarantee that the Trust Funds' objectives will be
achieved. Offerees in the states of Illinois, Indiana, Virginia and Washington
may purchase Units of the Insured Corporate Series and the U.S. Treasury
Portfolios only.
As used herein, the terms "Securities" and "Bonds" mean the obligations
initially deposited in the Trusts described under "Portfolio" for each Trust
(including all contracts to purchase such obligations accompanied by an
irrevocable letter of credit sufficient to perform such contracts initially
deposited in the Trusts) and any additional obligations deposited in the
Trusts following the Initial Date of Deposit. As used herein, the term
"Corporate Bonds" means the corporate obligations (and contracts) included in
Insured Corporate Series. As used herein, the term "U.S. Treasury Obligations"
means the obligations (and contracts) included in the U.S. Treasury Portfolios
and the U.S. Treasury Obligations included in the Insured Corporate Series. As
used herein, the term "Municipal Bonds" means the obligations (and contracts)
included in the Tax-Exempt Portfolio.
6
<PAGE>
On the Initial Date of Deposit, the Sponsor delivered to the Trustee that
aggregate principal amount of Securities or contracts for the purchase thereof
for deposit in the Trust Funds as set forth under "Essential Information." Of
such principal amount, the amount specified in "Essential Information" was
deposited in each Trust. In exchange for the Securities so deposited, the
Trustee delivered to the Sponsor documentation evidencing the ownership of
that number of Units for each Trust as indicated under "Essential
Information." Each Trust initially consists of delivery statements (i.e.,
contracts) to purchase obligations. The Sponsor has a limited right of
substitution for such Securities in the event of a failed contract. See
"General Information--Trust Information."
Additional Units of each Trust may be issued from time to time following the
Initial Date of Deposit by depositing in the Trust additional Securities or
contracts to purchase thereof together with irrevocable letters of credit or
cash. As additional Units are issued by a Trust as a result of the deposit of
additional Securities by the Sponsor, the aggregate value of the Securities in
the Trust will be increased and the fractional undivided interest in the Trust
represented by each Unit will be decreased. The Sponsor may continue to make
additional deposits of Securities into a Trust following the Initial Date of
Deposit, provided that such additional deposits will be in principal amounts
which will maintain the same original percentage relationship among the
principal amounts of the Securities in such Trust established by the initial
deposit of the Securities. Thus, although additional Units will be issued,
each Unit will continue to represent the same principal amount of each
Security, and the percentage relationship among the principal amount of each
Security in the related Trust will remain the same.
Each Unit initially offered represents that undivided interest in the
appropriate Trust indicated under "Essential Information." To the extent that
any Units are redeemed by the Trustee or additional Units are issued as a
result of additional Securities being deposited by the Sponsor, the fractional
undivided interest in a Trust represented by each unredeemed Unit will
increase or decrease accordingly, although the actual interest in such Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which
may include the Sponsor, or until the termination of the Trust Agreement.
An investment in Units of a Trust Fund should be made with an understanding of
the risks which an investment in fixed rate debt obligations may entail,
including the risk that the value of the portfolio and hence of the Units will
decline with increases in interest rates. The value of the underlying
Securities will fluctuate inversely with changes in interest rates. The
uncertain economic conditions of recent years, together with the fiscal
measures adopted to attempt to deal with them, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate debt
obligations generally and long-term obligations in particular. The Sponsor
cannot predict the degree to which such fluctuations will continue in the
future.
7
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
We have audited the accompanying statements of condition and the related
portfolios of EVEREN Unit Investment Trusts, Series 47 as of May 8, 1996. The
statements of condition and portfolios 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 Securities owned at May 8, 1996 and a
letter of credit deposited to purchase Securities 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 EVEREN Unit Investment
Trusts, Series 47 as of May 8, 1996, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
May 8, 1996
8
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
STATEMENTS OF CONDITION AT THE OPENING OF BUSINESS ON MAY 8, 1996, THE INITIAL
DATE OF DEPOSIT
<TABLE>
<CAPTION>
INSURED INSURED U.S. TREASURY U.S. TREASURY INSURED
CORPORATE CORPORATE PORTFOLIO PORTFOLIO MICHIGAN
SERIES 9 SERIES 10 SERIES 17 SERIES 18 SERIES 14
---------- ---------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT IN SECURITIES
Securities deposited in
the Trusts (1)(2)...... $ -- $ -- $ -- $ -- $ --
Contracts to purchase
Securities (1)(2)...... 1,281,135 1,220,621 493,623 492,510 2,510,841
Accrued interest to
First Settlement Date
on Securities (1)(3)... 30,748 27,574 13,263 13,093 25,607
---------- ---------- ---------- ---------- ----------
Total.................. $1,311,883 $1,248,195 $ 506,886 $ 505,603 $2,536,448
========== ========== ========== ========== ==========
Number of Units......... 135,000 130,000 50,000 50,000 265,500
LIABILITY AND INTEREST
OF UNITHOLDERS
Liability--
Accrued interest
payable to Sponsor
(1)(3)................ $ 30,748 $ 27,574 $ 13,263 $ 13,093 $ 25,607
Interest of
Unitholders--
Cost to investors (4).. 1,333,125 1,283,490 502,400 502,300 2,640,132
Less: Gross
underwriting
commission (4)........ 51,990 62,869 8,777 9,790 129,291
---------- ---------- ---------- ---------- ----------
Net interest to
Unitholders
(1)(3)(4)............. 1,281,135 1,220,621 493,623 492,510 2,510,841
---------- ---------- ---------- ---------- ----------
Total................ $1,311,883 $1,248,195 $ 506,886 $ 505,603 $2,536,448
========== ========== ========== ========== ==========
</TABLE>
- --------
NOTES:
(1) The aggregate value of the Securities listed in each "Portfolio" and their
cost to the Trust are the same. The value of the Securities is determined
by Cantor Fitzgerald & Co. on the bases set forth under "Public Offering
of Units--Public Offering Price". The contracts to purchase Securities are
collateralized by an irrevocable letter of credit of $6,109,439 which has
been deposited with the Trustee. Of this amount, $5,998,730 relates to the
offering price of Securities to be purchased and $110,709 relates to
accrued interest on such Securities to the expected dates of delivery.
(2) Insurance coverage providing for the timely payment of principal and
interest on the Securities in an Insured Trust has been obtained directly
by the issuer of such Securities or by the Sponsor from MBIA Insurance
Corporation or other insurers.
(3) The Trustee will advance to each Trust the amount of net interest accrued
to the First Settlement Date for distribution to the Sponsor as the
Unitholder of Record.
(4) The aggregate public offering price includes a sales charge for the Trust
as set forth under "Essential Information", assuming all single
transactions involve less than 10,000 Units (less than 50,000 Units for a
U.S. Treasury Portfolio). For single transactions involving 10,000 or more
Units (50,000 or more Units for a U.S. Treasury Portfolio) the sales
charge is reduced (see "Public Offering of Units--Public Offering Price")
resulting in an equal reduction in both the Cost to investors and the
Gross underwriting commission while the Net interest to Unitholders
remains unchanged.
9
<PAGE>
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of a Trust are offered at the Public Offering
Price thereof. During the initial offering period, the Public Offering Price
per Unit is equal to the aggregate of the offering side evaluations of the
Securities in such Trust (as determined, pursuant to the terms of a contract
with the Evaluator, by Cantor Fitzgerald & Co., a non-affiliated firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities), plus or minus a pro rata share of cash, if any, in the
Principal account held or owned by such Trust plus accrued interest plus the
applicable sales charge referred to in the tables below divided by the number
of outstanding Units of such Trust. The Public Offering Price for secondary
market transactions, on the other hand, is based on the aggregate bid side
evaluations of the Securities in a Trust (also, currently, as determined by
Cantor Fitzgerald & Co.), plus or minus cash, if any, in the Principal Account
held or owned by such Trust, plus accrued interest plus a sales charge based
upon the dollar weighted average maturity of such Trust.
For the Insured Corporate Series, the sales charge per Unit will be reduced
during the initial offering period pursuant to the following graduated scale:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE YEARS TO MATURITY
-------------------------------------------
7.5 TO 9.99 15 OR MORE
--------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT
NUMBER OF UNITS PRICE INVESTED PRICE INVESTED
- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1 to 9,999 Units.................... 3.9% 4.058% 4.9% 5.152%
10,000 to 24,999 Units.............. 3.7 3.842 4.5 4.712
25,000 to 49,999 Units.............. 3.5 3.627 4.3 4.493
50,000 to 99,999 Units.............. 3.3 3.413 3.5 3.627
100,000 or more Units............... 2.5 2.564 3.0 3.093
</TABLE>
The sales charge per Unit for U.S. Treasury Portfolio Series (other than
Series which contain predominantly zero coupon U.S. Treasury Obligations) will
be reduced pursuant to the following graduated scale:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE YEARS TO MATURITY
-------------------------------------------
0 TO 2.99 3 TO 4.99
--------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT
TICKET SIZE* PRICE INVESTED PRICE INVESTED
- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $500,000.................. 1.75% 1.781% 1.95% 1.989%
$500,000 to $999,999................ 1.50 1.523 1.70 1.729
$1,000,000 to $1,499,999**.......... 1.25 1.266 1.30 1.317
</TABLE>
- ---------------------
* The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor.
** For any transactions in excess of these amounts, contact the Sponsor for
the applicable sales charge.
10
<PAGE>
The sales charge per Unit for U.S. Treasury Portfolio Series which contain
predominantly zero coupon U.S. Treasury Obligations will be reduced pursuant
to the following graduated scale:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE YEARS TO MATURITY
-------------------------------------------
0 TO 1.99 2 TO 4.99
--------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT
TICKET SIZE* PRICE INVESTED PRICE INVESTED
- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $500,000.................. 1.70% 1.729% 1.95% 1.989%
$500,000 to $999,999................ 1.50 1.523 1.70 1.729
$1,000,000 to $1,499,999**.......... 1.25 1.266 1.30 1.317
</TABLE>
- ---------------------
* The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor.
** For any transactions in excess of these amounts, contact the Sponsor for
the applicable sales charge.
For the Tax-Exempt Portfolios, the sales charge per Unit will be reduced
during the initial offering period pursuant to the following graduated scale:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE YEARS TO MATURITY
---------------------------------------------------------------------------------------
0 TO 7.49 7.5 TO 9.99 10 TO 14.99 15 OR MORE
--------------------- --------------------- --------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT OFFERING NET AMOUNT OFFERING NET AMOUNT
NUMBER OF UNITS PRICE INVESTED PRICE INVESTED PRICE INVESTED PRICE INVESTED
- --------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 to 9,999 Units........ 3.0% 3.093% 3.9% 4.058% 4.2% 4.384% 4.9% 5.152%
10,000 to 24,999 Units.. 2.8 2.881 3.7 3.842 4.0 4.167 4.5 4.712
25,000 to 49,999 Units.. 2.6 2.669 3.5 3.627 3.8 3.950 4.3 4.493
50,000 to 99,999 Units.. 2.5 2.564 3.3 3.413 3.5 3.627 3.5 3.627
100,000 or more Units... 2.0 2.041 2.7 2.775 2.8 2.881 3.0 3.093
</TABLE>
As indicated above, in connection with secondary market transactions the sales
charge is based upon the dollar weighted average maturity of a Trust and is
determined in accordance with the tables set forth below. For purposes of this
computation, Securities will be deemed to mature on their expressed maturity
dates unless: (a) the Securities have been called for redemption or funds or
securities have been placed in escrow to redeem them on an earlier call date,
in which case such call date will be deemed to be the date upon which they
mature; or (b) such Securities are subject to a "mandatory tender," in which
case such mandatory tender will be deemed to be the date upon which they
mature. The effect of this method of sales charge computation will be that
different sales charge rates will be applied to a Trust based upon the dollar
weighted average maturity of such Trust's portfolio, in accordance with the
following schedules.
For the Insured Corporate Series, in connection with secondary market
transactions the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
SECONDARY
-------------------------------
DOLLAR WEIGHTED AVERAGE YEARS
TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
--------- ---------- ----------
SALES CHARGE (PERCENT OF PUBLIC
DOLLAR AMOUNT OF TRADE OFFERING PRICE)
---------------------- -------------------------------
<S> <C> <C> <C>
$1,000 to $99,999......................... 3.50% 4.50% 5.50%
$100,000 to $499,999...................... 3.25 4.25 5.00
$500,000 to $999,999...................... 3.00 4.00 4.50
$1,000,000 or more........................ 2.75 3.75 4.00
</TABLE>
11
<PAGE>
- ---------------------
* If the dollar weighted average maturity of a Trust Fund is from 1 to 3.99
years the sales charge is 2% and 1.5% of the Public Offering Price for
purchases of $1,000 to $249,999 and $250,000 or more, respectively.
In connection with secondary market transactions of all U.S. Treasury
Portfolios, the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
SECONDARY
----------------------------------------------------------------
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY
----------------------------------------------------------------
0-1.99 YEARS 2-2.99 YEARS 3-4.99 YEARS 5-6.99 YEARS 7-9.99 YEARS
DOLLAR AMOUNT OF TRADE ------------ ------------ ------------ ------------ ------------
- ---------------------- SALES CHARGE (PERCENT OF PUBLIC OFFERING PRICE)
<S> <C> <C> <C> <C> <C>
Less than $500,000...... 1.25% 1.50% 1.75% 2.25% 3.00%
$500,000-$999,999....... 1.00 1.25 1.50 1.75 2.50
$1,000,000-$1,499,999*.. 1.00 1.00 1.25 1.50 2.00
</TABLE>
- ---------------------
* For any transaction in excess of $1,499,999 contact the Sponsor for the
applicable sales charge.
For the Tax-Exempt Portfolios, in connection with secondary market
transactions the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
SECONDARY
---------------------------------------
YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
--------- ------------------ ----------
SALES CHARGE (% OF PUBLIC OFFERING
AMOUNT OF INVESTMENT PRICE)
-------------------- ---------------------------------------
<S> <C> <C> <C>
$1,000 to $99,999................. 3.50% 4.50% 5.50%
$100,000 to $499,999.............. 3.25 4.25 5.00
$500,000 to $999,999.............. 3.00 4.00 4.50
$1,000,000 or more................ 2.75 3.75 4.00
</TABLE>
- ---------------------
* If the dollar weighted average maturity of the Trust Fund is from 1 to 3.99
years the sales charge is 2% and 1.5% of the Public Offering Price for
purchases of $1,000 to $249,999 and $250,000 or more, respectively.
The reduced sales charges resulting from quantity discounts as shown on the
tables above will apply to all purchases of Units on any one day by the same
purchaser from the same Underwriter or dealer and for this purpose purchases
of Units of a Trust Fund will be aggregated with concurrent purchases of Units
of any other unit investment trust that may be offered by the Sponsor.
Additionally, Units purchased in the name of a spouse or child (under 21) of
such purchaser will be deemed to be additional purchases by such purchaser.
The reduced sales charges will also be applicable to a trust or other
fiduciary purchasing for a single trust estate or single fiduciary account.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to dealers and
other selling agents for purchases (see "Public Distribution of Units") by
investors who purchase Units through registered investment advisers, certified
financial planners or 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.
A purchaser desiring to purchase during a 13 month period $500,000 or more of
any combination of series of EVEREN Unit Investment Trusts may qualify for a
reduced sales charge by signing a nonbinding
12
<PAGE>
Letter of Intent with any single broker dealer. After signing a Letter of
Intent, at the date total purchases, less redemptions, of units of any
combination of series of EVEREN Unit Investment Trusts by a purchaser
(including units purchased in the name of the spouse of a purchaser or in the
name of a child of such purchaser under 21 years of age) exceed $500,000, the
selling broker/dealer, bank or other will credit the unitholder with cash as a
retroactive reduction of the sales charge on such units equal to the amount
which would have been paid for the total aggregated sale amount. If a
purchaser does not complete the required purchases under the Letter of Intent
within the 13 month period, no such retroactive sales charge reduction shall
be made. To qualify as a purchase under a Letter of Intent each purchase of
units of EVEREN Unit Investment Trusts must equal or exceed $100,000.
Unitholders of the various series of EVEREN Unit Investment Trusts, Insured
Corporate Series who meet the conditions in the next succeeding sentence may,
during the primary offering period of a Defined High Yield Corporate Income
Series or Investment Grade Corporate Income Series only, acquire Units of such
Defined High Yield Corporate Income Series or Investment Grade Corporate
Income Series at the reduced sales charge equivalent to purchases during the
initial offering period of 100,000 or more Units. First, the special sales
charge discount only applies to purchases acquired with funds received from
distributions of unscheduled principal payments in connection with units
issued in such series and, second, the minimum purchase must be at least
$1,000.
The Sponsor intends to permit officers, directors and employees of the Sponsor
and Evaluator and at the discretion of the Sponsor registered representatives
of selling firms to purchase Units of a Trust without a sales charge, although
a transaction processing fee may be imposed on such trades.
Had Units of a Trust been available for sale at the opening of business on the
Initial Date of Deposit, the Public Offering Price would have been as shown
under "Essential Information." The Public Offering Price per Unit of a Trust
on the date of this Prospectus or on any subsequent date will vary from the
amount stated under "Essential Information" in accordance with fluctuations in
the prices of the underlying Securities and the amount of accrued interest on
the Units. On the Initial Date of Deposit, pursuant to an exemptive order from
the Securities and Exchange Commission, the Public Offering Price at which
Units will be sold will not exceed the price determined as of the opening of
business on the Initial Date of Deposit as shown under "Essential
Information"; however, should the value of the underlying Securities decline,
purchasers will, of course, be given the benefit of such lower price. The
aggregate bid and offering side evaluations of the Securities shall be
determined (a) on the basis of current bid or offering prices of the
Securities, (b) if bid or offering prices are not available for any particular
Security, on the basis of current bid or offering prices for comparable bonds,
(c) by determining the value of Securities on the bid or offer side of the
market by appraisal, or (d) by any combination of the above.
The foregoing evaluations and computations shall be made as of the evaluation
time stated under "Essential Information," on each business day commencing
with the Initial Date of Deposit of the Securities, effective for all sales
made during the preceding 24-hour period.
The interest on the Securities deposited in a Trust, less the related
estimated fees and expenses, is estimated to accrue in the annual amounts per
Unit set forth under "Essential Information." The amount of net interest
income which accrues per Unit may change as Securities mature or are redeemed,
exchanged or sold, or as the expenses of a Trust change or the number of
outstanding Units of a Trust changes.
Although payment is normally made three business days following the order for
purchase, payments may be made prior thereto. A person will become the owner
of Units on the date of settlement provided
13
<PAGE>
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 on 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. If a Unitholder
desires to have certificates representing Units purchased, such certificates
will be delivered as soon as possible following his written request therefor.
For information with respect to redemption of Units purchased, but as to which
certificates requested have not been received, see "General Information--
Redemption" below.
ACCRUED INTEREST. Accrued interest is the accumulation of unpaid interest on a
security from the last day on which interest thereon was paid. Interest on
Securities generally is paid semi-annually (monthly in the case of Ginnie
Maes, if any) although a Trust accrues such 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 subsequent to the
First Settlement Date, the Public Offering Price of Units will have added to
it the proportionate share of accrued interest to the date of settlement.
Unitholders will receive on the next distribution date of a Trust the amount,
if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would otherwise
have to be paid in addition to the Public Offering Price in the sale of Units
to the public, the Trustee will advance the amount of accrued interest as of
the First Settlement Date and the same will be distributed to the Sponsor as
the Unitholder of record as of the First Settlement Date. Consequently, the
amount of accrued interest to be added to the Public Offering Price of Units
will include only accrued interest from the First Settlement Date to the date
of settlement, less any distributions from the Interest Account subsequent to
the First Settlement Date.
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trusts and distributed to Unitholders. Therefore,
there will always remain an item of accrued interest that is added to the
value of the Units. If a Unitholder sells or redeems all or a portion of his
Units, he will be entitled to receive his proportionate share of the accrued
interest from the purchaser of his Units. Since the Trustee has the use of the
funds held in the Interest Account for distributions to Unitholders and since
such Account is non-interest-bearing to Unitholders, the Trustee benefits
thereby.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION PRICE. While the Initial
Public Offering Price of Units will be determined on the basis of the current
offering prices of the Securities in a Trust, the redemption price per Unit
(as well as the secondary market price per Unit) at which Units may be
redeemed (see "General Information--Redemption") will be determined on the
basis of the current bid prices of the Securities. As of the opening of
business on the Initial Date of Deposit, the Public Offering Price per Unit
(based on the offering prices of the Securities in a Trust and including the
sales charge) exceeded the redemption price at which Units could have been
redeemed (based upon the current bid prices of the Securities in a Trust) by
the amount shown under "Essential Information." Under current market
conditions the bid prices for U.S. Treasury Obligations are expected to be
approximately 1/8 to 1/4 of 1% lower than the offer price of such obligations.
In the past, bid prices on securities similar to those in the Trust Funds have
been lower than the offering prices thereof by as much as 5% or more of
principal amount in the case of inactively traded bonds or as little as 1/2 of
1% in the case of actively traded bonds, but the difference between such
offering and bid prices may be expected to average 3% to 4% of principal
amount. For this reason, among others (including fluctuations in the market
prices of the Securities and the fact that the Public Offering Price includes
a sales charge), the amount realized by a Unitholder upon any redemption of
Units may be less than the price paid for such Units.
14
<PAGE>
PUBLIC DISTRIBUTION OF UNITS. The Sponsor intends to qualify the Units for
sale in a number of states (except for an Insured State Trust or uninsured
State Trust which will be qualified for sale only in the state for which such
Trust is named). Units will be sold through dealers who are members of the
National Association of Securities Dealers, Inc. and through others. Sales may
be made to or through dealers at prices which represent discounts from the
Public Offering Price as set forth below. Certain commercial banks are making
Units of the Trust Funds available to their customers on an agency basis. A
portion of the sales charge paid by their customers is retained by or remitted
to the banks in the amount shown in the tables below. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Fund Units; however, the
Glass-Steagall Act does permit certain agency transactions and the banking
regulators have indicated that these particular agency transactions are
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to
state law. The Sponsor reserves the right to change the discounts set forth
below from time to time. In addition to such discounts, the Sponsor may, from
time to time, pay or allow an additional discount, in the form of cash or
other compensation, to dealers employing registered representatives who sell,
during a specified time period, a minimum dollar amount of Units of a Trust
and other unit investment trusts created by the Sponsor. The difference
between the discount and the sales charge will be retained by the Sponsor. For
Tax-Exempt Portfolios only, any dealer who sells at least those amounts of
Units set forth under "The Tax-Exempt Portfolios--Underwriting" on the Initial
Date of Deposit will be entitled to a concession or agency commission equal to
the corresponding takedown set forth in that section for those Units sold on
the Initial Date of Deposit.
For the Insured Corporate Series, the primary and secondary market concessions
or agency commissions are as follows:
<TABLE>
<CAPTION>
PRIMARY MARKET
--------------------------------------------------------------
VOLUME DISCOUNTS PER UNIT*
-------------------------------------------------
FIRM SALES FIRM SALES FIRM SALES
REGULAR OR SALE OR SALE OR SALE
CONCESSION ARRANGEMENTS ARRANGEMENTS ARRANGEMENTS
OR AGENCY 25,000 TO 50,000 TO 100,000 OR
COMMISSION 49,999 99,999 MORE
----------- --------------- --------------- ---------------
WEIGHTED AVERAGE YEARS TO MATURITY
15
7.5 TO OR 7.5 TO 15 OR 7.5 TO 15 OR 7.5 TO 15 OR
NUMBER OF $10 UNITS 9.99 MORE 9.99 MORE 9.99 MORE 9.99 MORE
- ------------------- ------ ---- ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 to 9,999 Units........ 2.70% 3.20% 2.80% 3.40% 2.80% 3.50% 2.90% 3.60%
10,000 to 24,999 Units.. 2.50 3.20 2.60 3.30 2.60 3.40 2.70 3.50
25,000 to 49,999 Units.. 2.30 3.10 2.40 3.20 2.40 3.20 2.50 3.30
50,000 to 99,999 Units.. 2.20 2.40 2.30 2.50 2.30 2.50 2.40 2.50
100,000 or more Units... 1.50 2.00 1.60 2.10 1.60 2.10 1.60 2.10
</TABLE>
- --------
* Volume concessions of up to the amount shown can be earned as a marketing
allowance at the discretion of the Sponsor during the initial one month
period after the Initial Date of Deposit by firms who reach cumulative firm
sales or sales arrangement levels of at least $250,000. After a firm has
met the minimum $250,000 volume level, volume concessions may be given on
all trades originated from or by that firm, including those placed prior to
reaching the $250,000 level, and may continue to be given during the entire
initial offering period. Firm sales of any primary market Insured Corporate
trust series can be combined for the purposes of achieving the volume
discount. Only sales through EVEREN qualify for volume discounts and
secondary purchases do not apply. EVEREN Unit Investment Trusts reserves
the right to modify or change those parameters at any time and make the
determination of which firms qualify for the marketing allowance and the
amount paid.
15
<PAGE>
<TABLE>
<CAPTION>
SECONDARY MARKET
-------------------------------
DOLLAR WEIGHTED AVERAGE
YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
------------------------------------
DISCOUNT PER UNIT
(PERCENT OF PUBLIC OFFERING
DOLLAR AMOUNT OF TRADE PRICE)
---------------------- -------------------------------
<S> <C> <C> <C>
$1,000 to $99,999......................... 2.00% 3.00% 4.00%
$100,000 to $499,999...................... 1.75 2.75 3.50
$500,000 to $999,999...................... 1.50 2.50 3.00
$1,000,000 or more........................ 1.25 2.25 2.50
</TABLE>
- ---------------------
* If the dollar weighted average maturity of a Trust Fund is from 1 to 3.99
years, the concession or agency commission is 1.00% of the Public Offering
Price.
The primary market concessions or agency commissions for each U.S. Treasury
Portfolio Series (other than Series which contain predominantly zero coupon
U.S. Treasury Obligations) are as follows:
<TABLE>
<CAPTION>
PRIMARY MARKET
-----------------------------------
VOLUME DISCOUNTS**
---------------------
REGULAR FIRM SALES OR SALE
CONCESSION OR ARRANGEMENT
AGENCY ($1,000,000 OR
COMMISSION MORE)
------------- ---------------------
0-2.99 3-4.99 0-2.99 3-4.99
DOLLAR AMOUNT OF TRADE* YEARS YEARS YEARS YEARS
----------------------- ------ ------ --------- ---------
<S> <C> <C> <C> <C>
$0 to $499,999...................... 1.05% 1.10% 1.05% 1.20%
$500,000 to $999,999................ .90 1.00 .95 1.10
$1,000,000 to $1,499,000***......... .75 .75 .80 .80
</TABLE>
- ---------------------
* The breakpoint discounts are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1,000 per 100 Units.
** For U.S. Treasury Portfolio Series other than Series which contain
predominantly zero coupon U.S. Treasury Obligations, volume concessions of
up to the amount listed above can be earned as a marketing allowance at the
discretion of the Sponsor during the initial one month period after the
Initial Date of Deposit for firms who reach cumulative firm sales or sales
arrangement levels of at least $1 million. After a firm has met the
respective minimum volume level, volume concessions will be given on all
trades originated from or by that firm, starting on the Initial Date of
Deposit, including those placed prior to reaching the minimum level, and
will continue to be given during the entire initial offering period. Firm
sales of any primary U.S. Treasury Portfolio Series issued can be combined
for the purposes of achieving the volume discount. Only sales through
EVEREN qualify for volume concessions and secondary purchases do not apply.
EVEREN Unit Investment Trusts reserves the right to modify or change these
parameters at any time and make the determination of which firms qualify
for the marketing allowance and the amount paid.
*** For any transactions in excess of these amounts, contact the Sponsor for
the applicable concessions or agency commissions.
16
<PAGE>
The primary market concessions and agency commissions for each U.S. Treasury
Portfolio Series which contains predominantly zero coupon U.S. Treasury
Obligations are as follows:
<TABLE>
<CAPTION>
PRIMARY MARKET
-------------------------
REGULAR CONCESSION OR
AGENCY COMMISSION
-------------------------
DOLLAR AMOUNT OF TRADE* 0-1.99 YEARS 2-4.99 YEARS
----------------------- ------------ ------------
<S> <C> <C>
$0 to $499,999.................................. 1.05% 1.20%
$500,000 to $999,999............................ .90 1.10
$1,000,000 to $1,499,000**...................... .70 .80
</TABLE>
- ---------------------
* The breakpoint discounts are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1,000 per 100 Units. No volume
discount is allowed for these Series, however, sales of these Series can be
combined for the purposes of achieving the volume discount given for other
U.S. Treasury Portfolio Series.
**For any transactions in excess of these amounts, contact the Sponsor for the
applicable concessions and agency commissions.
For the Tax-Exempt Portfolios, the primary and secondary market concessions or
agency commissions are as follows:
<TABLE>
<CAPTION>
PRIMARY
--------------------------------------------
WEIGHTED AVERAGE YEARS TO MATURITY
0 TO 7.49 7.5 TO 9.99 10 TO 14.99 15 OR MORE
---------------------------------------
NUMBER OF UNITS DISCOUNT PER UNIT
- --------------- --------------------------------------------
<S> <C> <C> <C> <C>
1 to 9,999 Units................... $0.20 $0.27 $0.28 $0.32
10,000 to 24,999 Units............. $0.19 $0.25 $0.27 $0.32
25,000 to 49,999 Units............. $0.18 $0.23 $0.26 $0.32
50,000 to 99,999 Units............. $0.17 $0.22 $0.25 $0.25
100,000 or more Units.............. $0.11 $0.17 $0.18 $0.20
</TABLE>
<TABLE>
<CAPTION>
SECONDARY MARKET
-------------------------------
DOLLAR WEIGHT AVERAGE
YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
------------------------------------
DISCOUNT PER UNIT
(PERCENT OF PUBLIC OFFERING
DOLLAR AMOUNT OF TRADE PRICE)
---------------------- -------------------------------
<S> <C> <C> <C>
$1,000 to $99,999......................... 2.00% 3.00% 4.00%
$100,000 to $499,999...................... 1.75 2.75 3.50
$500,000 to $999,999...................... 1.50 2.50 3.00
$1,000,000 or more........................ 1.25 2.25 2.50
</TABLE>
- ---------------------
* If the dollar weighted average maturity of a Trust Fund is from 1 to 3.99
years, the concession or agency commission is 1.00% of the Public Offering
Price.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units.
PROFITS OF SPONSOR AND UNDERWRITERS. In connection with Trusts other than a
Tax-Exempt Portfolio, the Sponsor will receive gross sales charges equal to
the percentage of the Offering Price of the Units of such Trusts stated under
"Public Offering Price" and will pay a fixed portion of such sales charges to
dealers and agents. As set forth under "The Tax-Exempt Portfolios--
Underwriting", if applicable, the
17
<PAGE>
Underwriters of each Tax-Exempt Portfolio will receive gross sales charges
equal to the percentage of the Public Offering Price of the Units of such
Trust Fund stated under "Public Offering Price" and the Sponsor will receive a
fixed portion of such sales charges. In addition, the Sponsor may realize a
profit or a loss resulting from the difference between the purchase prices of
the Securities to the Sponsor and the cost of such Securities to a Trust Fund,
which is based on the offering side evaluation of the Securities. See
"Portfolio" for each Trust. The Sponsor or Underwriters may also realize
profits or losses with respect to Securities deposited in a Trust which were
acquired from underwriting syndicates of which the Sponsor or any Underwriter
was a member. An underwriter or underwriting syndicate purchases securities
from the issuer on a negotiated or competitive bid basis, as principal, with
the motive of marketing such securities to investors at a profit. The Sponsor
and the Underwriters may realize additional profits or losses during the
initial offering period on unsold Units as a result of changes in the daily
evaluation of the Securities in a Trust.
18
<PAGE>
I
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THE INSURED CORPORATE SERIES
THE TRUST PORTFOLIO
Insured Corporate Series 9 was formed for the purpose of providing a high
level of current income through investment in a fixed portfolio consisting
primarily of intermediate term corporate debt obligations issued after July
18, 1984 by utility companies. There is, of course, no guarantee that the
objective will be achieved.
Insured Corporate Series 10 was formed for the purpose of providing a high
level of current income through investment in a fixed portfolio consisting
primarily of long-term corporate debt obligations issued after July 18, 1984
by utility companies. There is, of course, no guarantee that the objective
will be achieved.
The Trusts may be appropriate investment vehicles for investors who desire to
participate in a portfolio of intermediate or long-term taxable fixed income
securities issued primarily by public utilities with greater diversification
than investors might be able to acquire individually. Diversification of the
Trusts' assets will not eliminate the risk of loss always inherent in the
ownership of securities. In addition, Bonds of the type deposited in the
Trusts often are not available in small amounts.
The selection of Bonds for the Trusts was based largely upon the experience
and judgment of the Sponsor. In making such selections the Sponsor considered
the following factors: (a) the price of the Bonds relative to other issues of
similar quality and maturity; (b) whether the Bonds were issued by a utility
company; (c) the diversification of the Bonds as to location of issuer; (d)
the income to the Unitholders of the Trusts; (e) whether the Bonds were
insured or the availability and cost of insurance for the scheduled payment of
principal and interest on the Bonds; (f) whether the Bonds were issued after
July 18, 1984; (g) the stated maturity of the Bonds; and (h) the call
provisions relating to the Bonds.
As of the Initial Date of Deposit, all of the Bonds in the Trusts' portfolios
other than the U.S. Treasury obligations are rated "Aaa" by Moody's Investors
Service, Inc. and "AAA" by Standard & Poor's. Standard & Poor's states that
"bonds rated AAA have the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and principal is extremely strong."
Moody's Investors Service, Inc. states that 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. Their safety is so absolute that, with the
occasional exception of oversupply in a few specific instances,
characteristically, their market value is affected solely by money market
fluctuations." See "Insurance on the Bonds." Subsequent to the Initial Date of
Deposit, a Bond may cease to be so rated. If this should occur, a Trust would
not be required to eliminate the Bond from the Trust, but such event may be
considered in the Sponsor's determination to direct the Trustee to dispose of
such investment. See "General Information--Investment Supervision." The Trusts
consist of that number of Bonds divided by type and concentrations, if any
(and percentage of principal amount of the Trusts) as set forth in the
following table.
INSURED CORPORATE SERIES
IC-1
<PAGE>
SERIES INFORMATION
<TABLE>
<CAPTION>
SERIES 9 SERIES 10
------------- -------------
<S> <C> <C>
Number of Bonds.................................... 5 6
Corporate Bonds(1)(2).............................. 5 6
U.S. Treasury Obligations(2).......................
Corporate Bond Concentrations:
State(2).......................................... NY 42%
Area Concentrations(3)............................ Northeast 60% Northeast 54%
Average life of the Bonds in the Trust(4).......... 9 years 28 years
Percentage of "when, as and if issued" or "delayed
delivery" Bonds purchased by the Trust............ None None
Syndication(5)..................................... None None
</TABLE>
- ---------------------
(1) The Corporate Bonds deposited in each Trust have been issued by public
utility companies.
(2) The portfolio percentage in parenthesis represents the principal amount of
such Bonds to the total principal amount of Bonds in the Trust. For a
discussion of the risks associated with investments in the bonds of such
issuers, see "Risk Factors" below.
(3) The percentage provided above represents the percentage of the Principal
Amount of Bonds in a Trust that are concentrated in a specific region of
the country. An adverse economic climate in a given area may affect an
issuer's ability to make payment of principal and/or interest.
(4) The average life of the Bonds in a Trust is calculated based upon the
stated maturities of the bonds in such Trust (or, with respect to Bonds
for which funds or securities have been placed in escrow to redeem such
Bonds on a stated call date, based upon such call date). The average life
of the Bonds in a Trust may increase or decrease from time to time as
Bonds mature or are called or sold.
(5) The Sponsor and/or affiliated Underwriters have participated as either the
sole underwriter or manager or a member of underwriting syndicates from
which approximately that percentage listed above of the aggregate
principal amount of the Bonds in such Trust were acquired.
INSURED CORPORATE SERIES
IC-2
<PAGE>
INSURED CORPORATE
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
SERIES 9
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT: MAY 8, 1996
<TABLE>
<CAPTION>
RATINGS(2)
----------------
AGGREGATE STANDARD REDEMPTION COST OF BONDS
PRINCIPAL NAME OF ISSUER(1)(5) COUPON MATURITY MOODY'S & POOR'S PROVISIONS(3) TO TRUST(4)
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 250,000 Pacific Gas & Electric 6.250% 3/1/2004 Aaa AAA Non-Callable $ 236,595
300,000 Consolidated Edison 6.625 7/1/2005 Aaa AAA Non-Callable 287,184
300,000 Texas Utilities 6.750 7/1/2005 Aaa AAA Non-Callable 290,138
Pennsylvania Power &
250,000 Light 6.550 3/1/2006 Aaa AAA Non-Callable 238,863
Public Service Electric
250,000 & Gas 6.250 1/1/2007 Aaa AAA Non-Callable 228,355
---------- -------------
$1,350,000 $1,281,135.00
========== =============
</TABLE>
- --------
See "Notes to Portfolios."
INSURED CORPORATE SERIES
IC-3
<PAGE>
INSURED CORPORATE
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
SERIES 10
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT: MAY 8, 1996
<TABLE>
<CAPTION>
RATINGS(2)
----------------
AGGREGATE STANDARD REDEMPTION COST OF BONDS
PRINCIPAL NAME OF ISSUER(1)(5) COUPON MATURITY MOODY'S & POOR'S PROVISIONS(3) TO TRUST(4)
- -----------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 300,000 Texas Utilities 7.875% 3/1/2023 Aaa AAA 2003 @ 103.84 $ 294,273
300,000 Consolidated Edison 7.500 6/15/2023 Aaa AAA 2003 @ 103.27 284,586
New York Telephone Com-
250,000 pany 7.250 2/15/2024 Aaa AAA 2004 @ 103.06 234,985
Public Service Electric
150,000 & Gas 7.000 9/1/2024 Aaa AAA 2003 @ 102.74 132,308
Southern California Edi-
150,000 son 7.250 3/1/2026 Aaa AAA 2003 @ 102.43 137,595
150,000 Pacific Gas & Electric 7.250 8/1/2026 Aaa AAA 2003 @ 103.63 136,874
---------- ----------
$1,300,000 $1,220,621
========== ==========
</TABLE>
- --------
See "Notes to Portfolios."
INSURED CORPORATE SERIES
IC-4
<PAGE>
NOTES TO PORTFOLIOS:
All Bonds in the Trusts except for any U.S. Treasury Obligations are insured
only by MBIA Insurance Corporation. The insurance was obtained either directly
by the issuer of the Bonds or by the Sponsor.
* These Bonds are "when, as and if issued" or "delayed delivery" and have
expected settlement dates after the "First Settlement Date."
(1) Contracts to acquire Bonds were entered into by the Sponsor on May 6, 1996
and May 7, 1996. All Bonds are represented by regular way contracts,
unless otherwise indicted, for the performance of which an irrevocable
letter of credit has been deposited with the Trustee.
(2) All the Bonds in the Trusts except for the U.S. Treasury Obligations are
insured by MBIA Insurance Corporation and therefore are rated AAA by
Standard & Poor's and Aaa by Moody's. See "The Trust Portfolio" and
"Insurance on the Bonds." Also, the Units of the Trusts are rated AAA by
Standard & Poor's. (see "General Information--Rating of Units").
(3) There is shown under this heading the year in which each issue of Bonds is
initially or currently redeemable and the redemption price for that year;
unless otherwise indicated, each issue continues to be redeemable at
declining prices thereafter, but not below par value. The prices at which
the Bonds may be redeemed or called prior to maturity may or may not
include a premium and, in certain cases, may be less than the cost of the
Bonds to a Trust. In addition, certain Bonds in the portfolio may be
redeemed in whole or in part other than by operation of the stated
redemption provisions under certain unusual or extraordinary circumstances
specified in the instruments setting forth the terms and provisions of
such Bonds.
(4) During the initial offering period, evaluations of Bonds are made on the
basis of current offering side evaluations of the Bonds. The aggregate
offering price is greater than the aggregate bid price of the Bonds, which
is the basis on which the Redemption Price will be determined for purposes
of redemption of Units after the initial offering period.
(5) Other information regarding the Bonds in the Trusts, at the opening of
business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
INSURED INSURED
CORPORATE CORPORATE
SERIES 9 SERIES 10
---------- ----------
<S> <C> <C>
Cost of Bonds to Sponsor.............................. $1,276,072 $1,215,745
Profit or (Loss) to Sponsor........................... $ 5,063 $ 4,876
Annual Interest Income to Trust....................... $ 87,750 $ 96,500
Bid Side Value of Bonds............................... $1,267,636 $1,207,620
</TABLE>
The Cost of Bonds to Sponsor and Profit or (Loss) to Sponsor reflect
portfolio hedging transaction costs, hedging gains or losses, certain other
carrying costs and the cost of insurance obtained by the Sponsor for
individual Bonds, if any, prior to the date such Bonds are deposited in a
Trust.
"#" indicates that such Bond was issued at an original issue discount. The
tax effect of Bonds issued at an original issue discount is described in
"Federal Tax Status" below.
(6) This Bond has been purchased at a deep discount from the par value because
there is little or not stated interest income thereon. Bonds which pay no
interest are normally described as "zero coupon" bonds. Over the life of
bonds purchased at a deep discount the value of such bonds will increase
such that upon maturity the holders of such bonds will receive 100% of the
principal amount thereof. None of the aggregate principal amount of the
Bonds in Series 9 and Series 10, respectively, are "zero coupon" bonds.
INSURED CORPORATE SERIES
IC-5
<PAGE>
RISK FACTORS
Public Utility Issues
Certain of the Bonds in each Trust are obligations of public utility issuers.
In general, public utilities are regulated monopolies engaged in the business
of supplying light, water, power, heat, transportation or means of
communication. Historically, the utilities industry has provided investors in
securities issued by companies in this industry with high levels of
reliability, stability and relative total return on their investments.
However, an investment in either of the Trusts should be made with an
understanding of the characteristics of such issuers and the risks which such
an investment may entail. General problems of such issuers would include the
difficulty in financing large construction programs in an inflationary period,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition,
federal, state and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely affect
the ability of the issuers of certain of the Bonds in the portfolios to make
payments of principal and/or interest on such Bonds.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and
the appropriate rate of return on an approved asset base, which must be
approved by the state commissions. Certain utilities have had difficulty from
time to time in persuading regulators, who are subject to political pressures,
to grant rate increases necessary to maintain an adequate return on investment
and voters in many states have the ability to impose limits on rate
adjustments (for example, by initiative or referendum). Any unexpected
limitations could negatively affect the profitability of utilities whose
budgets are planned far in advance. Also, changes in certain accounting
standards currently under consideration by the Financial Accounting Standards
Board could cause significant write-downs of assets and reductions in earnings
for many investor-owned utilities. In addition, gas pipeline and distribution
companies have had difficulties in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term contracts and
avoiding litigation from their customers, on the on had, or suppliers, on the
other.
Certain of the issuers of the Bonds in a Trust may own or operate nuclear
generating facilities. Governmental authorities may from time to time review
existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating
projects in the electric utility industry have experienced substantial cost
increases, construction delays and licensing difficulties. These have been
caused by various factors, including inflation, high financing costs, required
design changes and rework, allegedly faulty construction, objections by groups
and governmental officials, limits on the ability to finance, reduced
forecasts of energy requirements and economic conditions. This experience
indicates that the risk of significant cost increases, delays and licensing
difficulties remains present through completion and achievement of commercial
operation of any nuclear project. Also, nuclear generating units in service
have experienced unplanned outages or extensions of scheduled outages due to
equipment problems or new regulatory requirements sometimes followed by a
significant delay in obtaining regulatory approval to return to service. A
major accident at a nuclear plan anywhere, such as the accident at a plant in
Chernobyl, U.S.S.R., could cause the imposition of limits or prohibitions on
the operation, construction or licensing of nuclear units in the United
States.
INSURED CORPORATE SERIES
IC-6
<PAGE>
In view of the uncertainties discussed above, there can be no assurance that
any bond issuer's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a bond issuer
could earn an adequate return on its investment in such units. The likelihood
of a significantly adverse event occurring in any of the areas of concern
described above varies, as does the potential severity of any adverse impact.
It should be recognized, however, that one or more of such adverse events
could occur and individually or collectively could have a material adverse
impact on the financial condition or the results of operations or on a bond
issuer's ability to make interest and principal payments on its outstanding
debt.
Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail transportation to
transport fossil fuels, the uncertainty of transmission service costs for both
interstate and intrastate transactions, changes in tax laws which adversely
affect a utility's ability to operate profitably, increased competition in
service costs, reductions in estimates of future demand for electricity and
gas in certain areas of the country, restrictions on operations and increased
cost and delays attributable to environmental considerations, uncertain
availability and increased cost of capital, unavailability of fuel for
electric generation at reasonable prices, including the steady rise in fuel
costs and the costs associated with conversion to alternate fuel sources such
as coal, availability and cost of natural gas for resale, technical and cost
factors and other problems associated with construction, licensing, regulation
and operation of nuclear facilities for electric generation, including among
other considerations the problems associated with the use of radioactive
materials and the disposal of radioactive wastes, and the effects of energy
conservation. Each of the problems referred to could adversely affect the
ability of the issuer of any utility Bonds in a Trust to make payments due on
these Bonds.
In addition, the ability of state and local joint action power agencies to
make payments on bonds they have issued is dependent in large part on payments
made to them pursuant to power supply or similar agreements.
Courts in Washington and Idaho have held that certain agreements between
Washington Public Power Supply System ("WPPSS") and the WPPSS participants are
unenforceable because the participants did not have the authority to enter
into the agreements. While these decisions are not specifically applicable to
agreements entered into by public entities in other states, they may cause a
reexamination of the legal structure and economic viability of certain
projects financed by joint action power agencies, which might exacerbate some
of the problems referred to above and possibly lead to legal proceedings
questioning the enforceability of agreements upon which payment of these bonds
may depend.
Business conditions of the telephone industry in general may affect the
performance of a Trust. General problems of telephone companies include
regulation of rates for service by the FCC and various state or other
regulatory agencies. However, over the last several years regulation has been
changing, resulting in increased competition. The new approach is more market
oriented, more flexible and more complicated. For example, Federal and certain
state regulators have instituted "price cap" regulation which couples
protection of rate payers for basic services with flexible pricing for
ancillary services. These new approaches to regulation could lead to greater
risks as well as greater rewards for operating telephone companies such as
those in the Trusts. Inflation has substantially increased the operating
expenses and cost of plant required for growth, service, improvement and
replacement of existing plant. Continuing cost increases, to the extent not
offset by improved productivity and revenues from increased business,
INSURED CORPORATE SERIES
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would result in a decreasing rate of return and a continuing need for rate
increases. Although allowances are generally made in ratemaking proceedings
for cost increases, delays may be experienced in obtaining the necessary rate
increases and there can be no assurance that the regulatory agencies will
grant rate increases adequate to cover operating and other expenses and debt
service requirements. To meet increasing competition, telephone companies will
have to commit substantial capital, technological and marketing resources.
Telephone usage, and therefore revenues, could also be adversely affected by
any sustained economic recession. New technology, such as cellular service and
fiber optics, will require additional capital outlays. The uncertain outcomes
of future labor agreements may also have a negative impact on the telephone
companies. Each of these problems could adversely affect the ability of the
telephone company issuers of any Bonds in a portfolio to make payments of
principal and interest on their Bonds.
Zero Coupon U.S. Treasury Obligations
Certain of the Bonds in the Trusts may be "zero coupon" U.S. Treasury
obligations. See footnote (6) in "Notes to Portfolios." 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 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.
INSURANCE ON THE BONDS
All Bonds in the Trusts (other than U.S. Treasury obligations, if any) are
insured as to the scheduled payment of interest and principal either by the
issuer of the Bonds or by the Sponsor under a financial guaranty insurance
policy obtained from MBIA Insurance Corporation ("MBIA Corporation"). See
"Portfolios" and the Notes thereto. The premium for each such insurance policy
has been paid in advance by such issuer or the Sponsor and each such policy is
non-cancellable and will remain in force so long as the Bonds are outstanding
and MBIA Corporation remains in business. No premiums for such insurance are
paid by the Trusts. If MBIA Corporation is unable to meet its obligations
under its policy or if the rating assigned to the claims-paying ability of
MBIA Corporation deteriorates, no other insurer has any obligation to insure
any issue adversely affected by either of these events.
The aforementioned insurance guarantees the scheduled payment of principal and
interest on all of the Bonds in each Trust except for any U.S. Treasury
obligations. It does not guarantee the market value of the Bonds or the value
of the Units of the Trusts. This insurance is effective so long as the Bond is
outstanding, whether or not held by a Trust. Therefore, any such insurance may
be considered to represent an element of market value in regard to the Bonds,
but the exact effect, if any, of this insurance on such market value cannot be
predicted.
MBIA Corporation 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 Corporation. MBIA Corporation, which commenced
municipal bond insurance operations on January 5, 1987, is a limited liability
corporation rather than a several liability association. MBIA Corporation is
domiciled in the State
INSURED CORPORATE SERIES
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of New York and licensed to do business in all 50 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.
As of December 31, 1995, MBIA Corporation had admitted assets of $3.8 billion
(audited), total liabilities of $2.5 billion (Audited), and total capital and
surplus of $1.3 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. Standard & Poor's has rated the claims paying ability of MBIA
Corporation "AAA." Copies of MBIA Corporation's financial statements prepared
in accordance with statutory accounting practices are available from MBIA
Corporation. The address of MBIA Corporation is 113 King Street, Armonk, New
York, 10504.
Effective December 31, 1989, MBIA Inc. acquired Bond Investors Group, Inc. On
January 5, 1990, the Insurer acquired all of the outstanding stock of Bond
Investors Group, Inc., the parent of 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
the Insurer and the Insurer has reinsured BIG's net outstanding exposure.
Moody's Investors Service rates all bond issues insured by MBIA Corporation
"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 Corporation
"AAA."
Because the Bonds (other than U.S. Treasury obligations) are insured as to the
scheduled payment of principal and interest and on the basis of the financial
condition and the method of operation of MBIA Corporation, Standard & Poor's
has assigned to the Trusts' Units its "AAA" investment rating. This is the
highest rating assigned to securities by such rating agency. See "The Trust
Portfolio." These ratings 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 Trusts or the Units thereof. See Note (2) to "Notes to
Portfolios."
Bonds in the Trusts for which insurance has been obtained by the issuer
thereof or by the Sponsor from MBIA Corporation may or may not have a higher
yield than uninsured bonds rated "AAA" by Standard & Poor's or "Aaa" by
Moody's Investors Service, Inc. In selecting Bonds for the portfolio of the
Trusts, the Sponsor has applied the criteria hereinbefore described.
FEDERAL TAX STATUS
For purposes of the following discussions and opinions, it is assumed that
interest on each of the Bonds is included in gross income for Federal income
tax purposes. In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
Each Trust is not an association taxable as a corporation for United States
Federal income tax purposes.
Each Unitholder will be considered the owner of a pro rata portion of each of
the Trust assets for Federal income tax purposes under Subpart E, Subchapter J
of Chapter 1 of the Internal Revenue Code of 1986 (the "Code"). Each
Unitholder will be considered to have received his pro rata share of income
derived from each Trust asset when such income is considered to be received by
such Trust. Each Unitholder will also be required to include in taxable income
for Federal income tax purposes, original issue
INSURED CORPORATE SERIES
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discount with respect to his interest in any Bonds held by a Trust at the same
time and in the same manner as though the Unitholder were the direct owner of
such interest.
Each Unitholder will have a taxable event when a Bond is disposed of (whether
by sale, exchange, liquidation, redemption, or payment at maturity) or when
the Unitholder redeems or sells his Units. A Unitholder's tax basis in his
Units will equal his tax basis in his pro rata portion of all the assets of
the Trust. Such basis is determined (before the adjustments described below)
by apportioning the tax basis for the Units among each of the Trust assets,
according to value as of the valuation date nearest the date of acquisition of
the Units. Unitholders must reduce the tax basis of their Units for their
share of accrued interest received, if any, on Bonds delivered after the date
the Unitholders pay for their Units to the extent that such interest accrued
on such Bonds during the period from the Unitholder's settlement date to the
date such Bonds are delivered to the Trust and, consequently, such Unitholders
may have an increase in taxable gain or reduction in capital loss upon the
disposition of such Units. Gain or loss upon the sale or redemption of Units
is measured by comparing the proceeds of such sale or redemption with the
adjusted basis of the Units. If the Trustee disposes of Bonds (whether by
sale, exchange, payment on maturity, redemption or otherwise), gain or loss is
recognized to the Unitholder (subject to various nonrecognition 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
his basis for his fractional interest in the asset disposed of. The basis of
each Unit and of each Bond which was issued with original issue discount
(including the U.S. Treasury obligations) (or which has market discount) must
be increased by the amount of accrued original issue discount (and market
discount, if the Unitholder elects to include market discount in income as it
accrues) and the basis of each Unit and of each Bond which was purchased by a
Trust at a premium must be reduced by the annual amortization of bond premium
which the Unitholder has properly elected to amortize under Section 171 of the
Code. The tax basis reduction requirements of the Code relating to
amortization of bond premium may, under some circumstances, result in the
Unitholder realizing a taxable gain when his Units are sold or redeemed for an
amount equal to or less than his original cost. The U.S. Treasury obligations
held by a Trust are treated as bonds that were originally issued at an
original issue discount provided, pursuant to a Treasury Regulation (the
"Regulation") issued on December 28, 1992, that the amount of original issue
discount determined under Section 1286 of the Code is not less than a "de
minimis" amount as determined thereunder (as discussed below under "Original
Issue Discount"). Because the U.S. Treasury obligations represent interests in
"stripped" U.S. Treasury bonds, a Unitholder's initial cost for his pro rata
portion of each U.S. Treasury obligation held by the Trust (determined at the
time he acquires his Units, in the manner described above) shall be treated as
its "purchase price" by the Unitholder. Original issue discount is effectively
treated as interest for Federal income tax purposes, and the amount of
original issue discount in this case is generally the difference between the
Bond's purchase price and its stated redemption price at maturity. A
Unitholder will be required to include in gross income for each taxable year
the sum of his daily portions of original issue discount attributable to the
U.S. Treasury obligations held by a Trust as such original issue discount
accrues and will, in general, be subject to Federal income tax with respect to
the total amount of such original issue discount that accrues for such year
even though the income is not distributed to the Unitholders during such year
to the extent it is not less than a "de minimis" amount as determined under
the Regulation. To the extent the amount of such discount is less than the
respective "de minimis" amount, such discount shall be treated as zero. In
general, original issue discount accrues daily under a constant interest rate
method which takes into account the semi-annual compounding of accrued
interest. In the case of the U.S. Treasury obligations, this method will
generally result in an increasing amount of income to the Unitholders each
year. Unitholders should consult their tax advisers regarding the Federal
income tax consequences and accretion of original issue discount.
INSURED CORPORATE SERIES
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Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by each Trust is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986 (the "Act"), certain miscellaneous itemized deductions, such as
investment expenses, tax return preparation fees and employee business
expenses will be deductible by an individual only to the extent they exceed 2%
of such individual's adjusted gross income. Unitholders may be required to
treat some or all of the expenses paid by each Trust as miscellaneous itemized
deductions subject to this limitation.
Premium. If a Unitholder's tax basis of his pro rata portion in any Bonds held
by a Trust exceeds the amount payable by the issuer of the Bond with respect
to such pro rata interest upon the maturity of the Bond, such excess would be
considered premium which may be amortized by the Unitholder at the
Unitholder's election as provided in Section 171 of the Code. Unitholders
should consult their tax advisers regarding whether such election should be
made and the manner of amortizing premium.
Original Issue Discount. Certain of the Bonds of a Trust may have been
acquired with "original issue discount." In the case of any Bonds of the Trust
acquired with "original issue discount" that exceeds a "de minimis" amount as
specified in the Code or in the case of the U.S. Treasury obligations as
specified in the Regulation, such discount is includable in taxable income of
the Unitholders on an accrual basis computed daily, without regard to when
payments of interest on such Bonds are received. The Code provides a complex
set of rules regarding the accrual of original issue discount. These rules
provide that original issue discount generally accrues on the basis of a
constant compound interest rate over the term of the Bonds. Unitholders should
consult their tax advisers as to the amount of original issue discount which
accrues.
Special original issue discount rules apply if the purchase price of the Bond
by a Trust exceeds its original issue price plus the amount of original issue
discount which would have previously accrued based upon its issue price (its
"adjusted issue price"). Similarly these special rules would apply to a
Unitholder if the tax basis of this pro rata portion of a Bond issued with
original issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers regarding these
special rules.
Market Discount. If a Unitholder's tax basis in his pro rata portion of Bonds
is less than the allocable portion of such Bond's stated redemption price at
maturity (or, if issued with original issue discount, the allocable portion of
its "revised issue price"), such difference will constitute market discount
unless the amount of market discount is "de minimis" as specified in the Code.
Market discount accrues daily computed on a straight line basis, unless the
Unitholder elects to calculate accrued market discount under a constant yield
method. The market discount rules do not apply to the U.S. Treasury
obligations because they are stripped debt instruments subject to special
original issue discount rules as discussed above. Unitholders should consult
their tax advisers regarding whether such election should be made and as to
the amount of market discount which accrues.
Accrued market discount is generally includable in taxable income to the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the Bonds, on the sale, maturity or disposition
of such Bonds by each Trust, and on the sale by a Unitholder of Units, unless
a Unitholder elects to include the accrued market discount in taxable income
as such discount accrues. If a Unitholder does not elect to annually include
accrued market discount in taxable income as it accrues, deductions for any
interest expense incurred by the Unitholder which is incurred to purchase or
carry his Units will be reduced by such accrued market discount. In general,
the portion of any interest expense which was not currently deductible would
ultimately be deductible when the accrued market discount is included in
income. Unitholders should consult their tax advisers regarding whether an
election should be made
INSURED CORPORATE SERIES
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to include market discount in income as it accrues and as to the amount of
interest expense which may not be currently deductible.
Computation of the Unitholder's Tax Basis. The tax basis of a Unitholder with
respect to his interest in a Bond is increased by the amount of original issue
discount (and market discount, if the Unitholder elects to include market
discount, if any, on the Bonds held by each Trust in income as it accrues)
thereon properly included in the Unitholder's gross income as determined for
Federal income tax purposes and reduced by the amount of any amortized premium
which the Unitholder has properly elected to amortize under Section 171 of the
Code. A Unitholder's tax basis in his Units will equal his tax basis in his
pro rata portion of all of the assets of each Trust.
Recognition of Taxable Gain or Loss Upon Disposition of Obligations by the
Trust or Disposition of Units. A Unitholder will recognize taxable capital
gain (or loss) when all or part of his pro rata interest in a Bond is disposed
of in a taxable transaction for an amount greater (or less) than his tax basis
therefor. As previously discussed, gain realized on the disposition of the
interest of a Unitholder in any Bond deemed to have been acquired with market
discount will be treated as ordinary income to the extent the gain does not
exceed the amount of accrued market discount not previously taken into income.
Any capital gain or loss arising from the disposition of a Bond by each Trust
or the disposition of Units by a Unitholder generally will be short-term
capital gain or loss unless the Unitholder has held his Units for more than
one year in which case such capital gain or loss will be long-term. For
taxpayers other than corporations, net capital gains are subject to a maximum
marginal stated tax rate of 28 percent. However, it should be noted that
legislative proposals are introduced from time to time that affect tax rates
and could affect relative differences at which ordinary income and capital
gains are taxed.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all Trust assets including his pro rata
portion of all of the Bonds represented by the Unit. This may result in a
portion of the gain, if any, on such sale being taxable as ordinary income
under the market discount rules (assuming no election was made by the
Unitholder to include market discount in income as it accrues) as previously
discussed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates on
ordinary income while capital gains would remain subject to a 28 percent
maximum stated rate for taxpayers other than corporations. Because some of all
capital gains are taxed at a comparatively lower rate under the Tax Act, the
Tax Act includes a provision that recharacterizes capital gains as ordinary
income in the case of certain financial transactions that are "conversion
transactions" effective for transactions entered into after April 30, 1993.
Unitholders and prospective investors should consult with their tax advisers
regarding the potential effect of this provision on their investment in Units.
Foreign Investors. A Unitholder of a Trust who is a foreign investor (i.e., an
investor other than a U.S. citizen or resident or a U.S. corporation,
partnership, estate or trust) will not be subject to United States federal
income taxes, including withholding taxes, on interest income (including any
original issue discount) on, or any gain from the sale or other disposition
of, his pro rata interest in any Bond or the sale of his Units provided that
all of the following conditions are met: (i) the interest income or gain is
not effectively connected with the conduct by the foreign investor of a trade
or business within the United States, (ii) the interest is United States
source income (which is the case for most securities issued by United States
issuers), the Bond is issued after July 18, 1984 (which is the case for each
Bond held by the Trust), the foreign investor does not own, directly or
indirectly, 10% or more of the total combined voting power of all classes of
voting stock of the issuer of the Bond and the foreign investor is not a
controlled foreign corporation related (within the meaning of Section
864(d)(4) of the Code) to the issuer of the
INSURED CORPORATE SERIES
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Bond, or (iii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more during
his or her taxable year and (iv) the foreign investor provides all
certification which may be required of his status (foreign investors may
contact the Sponsor to obtain a Form W-8 which must be filed with the Trustee
and refiled every three calendar years thereafter). Foreign investors should
consult their tax advisers with respect to United States tax consequences of
ownership of Units. On December 7, 1995 the U.S. Treasury Department released
proposed legislation that, if adopted, could affect the United States Federal
income taxation of such non-United States Unitholders and the portion of the
Trust's income allocable to non-United States Unitholders. Similar language,
which would be effective on the date of enactment, was included in the Health
Insurance Reform Bill as passed by the U.S. Senate on April 23, 1996.
It should be noted that the Tax Act includes a provision which eliminates the
exemption from United States taxation, including withholding taxes, for
certain "contingent interest." The provision applies to interest received
after December 31, 1993. No opinion is expressed herein regarding the
potential applicability of this provision and whether United States taxation
or withholding taxes could be imposed with respect to income derived from the
Units as a result thereof. Unitholders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
General. Each Unitholder (other than a foreign investor who has properly
provided the certifications described in the preceding paragraph) will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by each Trust to such Unitholder including amounts
received upon the redemption of the Units will be subject to back-up
withholding.
The foregoing discussion relates only to United Stated Federal income taxes;
Unitholders may be subject to state and local taxation in other jurisdictions
(including a foreign investor's country of residence). Unitholders should
consult their tax advisers regarding potential state, local, or foreign
taxation with respect to the Units.
TAX REPORTING AND REALLOCATION
Because each Trust receives interest and makes monthly distributions based
upon such Trust's expected total collections of interest and any anticipated
expenses, certain tax reporting consequences may arise. Each Trust is required
to report Unitholder information to the Internal Revenue Service ("IRS"),
based upon the actual collection of interest by such Trust on the securities
in such Trust, without regard to such Trust's expenses or to such Trust's
payments to Unitholders during the year. If distributions to Unitholders
exceed interest collected, the difference will be reported as a return of
principal which will reduce a Unitholder's cost basis in its Units (and its
pro rata interest in the securities in the Trust). A Unitholder must include
in taxable income the amount of income reported by a Trust to the IRS
regardless of the amount distributed to such Unitholder. If a Unitholder's
share of taxable income exceeds income distributions made by a Trust to such
Unitholder, such excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible by an
individual Unitholder as an itemized deduction except to the extent that the
total amount of certain itemized deductions, such as investment expenses
(which would include the Unitholder's share of Trust expenses), tax return
preparation fees and employee business expenses, exceeds 2% of such
Unitholder's adjusted gross income. Alternatively, in certain cases, such
excess may represent an increase in the Unitholder's tax basis in the Units
owned. Investors with questions regarding these issues should consult with
their tax advisers.
INSURED CORPORATE SERIES
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ESTIMATED CASH FLOWS TO UNITHOLDERS
The tables below set forth the per Unit estimated distributions of interest
and principal to Unitholders. The tables assume no changes in Trust expenses,
no redemptions or sales of the underlying Bonds prior to maturity and the
receipt of all principal due upon maturity. To the extent the foregoing
assumptions change actual distributions will vary.
INSURED CORPORATE SERIES 9
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Jun 15, 1996 $0.03140 $0.03140
Jul 15, 1996 to Feb 15, 2004 $0.05233 $0.05233
Mar 15, 2004 $0.05233 $1.85185 $1.90418
Apr 15, 2004 to Jun 15, 2005 $0.04293 $0.04293
Jul 15, 2005 $0.04293 $4.44444 $4.48737
Aug 15, 2005 to Feb 15, 2006 $0.01893 $0.01893
Mar 15, 2006 $0.01893 $1.85185 $1.87078
Apr 15, 2006 to Dec 15, 2006 $0.00913 $0.00913
Jan 15, 2007 $0.00913 $1.85185 $1.86098
</TABLE>
INSURED CORPORATE SERIES 10
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Jun 15, 1996 $0.03602 $0.03602
Jul 15, 1996 to Feb 15, 2023 $0.06003 $0.06003
Mar 15, 2023 $0.06003 $2.30769 $2.36772
Apr 15, 2023 to Jun 15, 2023 $0.04523 $0.04523
Jul 15, 2023 $0.03801 $2.30769 $2.34570
Aug 15, 2023 to Feb 15, 2024 $0.03113 $0.03113
Mar 15, 2024 $0.02532 $1.92308 $1.94840
Apr 15, 2024 to Aug 15, 2024 $0.01983 $0.01983
Sep 15, 2024 $0.01983 $1.15385 $1.17368
Oct 15, 2024 to Feb 15, 2028 $0.01333 $0.01333
Mar 15, 2026 $0.01333 $1.15385 $1.16718
Apr 15, 2026 to Jul 15, 2026 $0.00653 $0.00653
Aug 15, 2026 $0.00653 $1.15385 $1.16038
</TABLE>
INSURED CORPORATE SERIES
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<PAGE>
U.
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THE U.S. TREASURY PORTFOLIO SERIES
THE TRUST PORTFOLIO
U.S. Treasury Portfolio Series 17 and Series 18 were formed for the purpose of
providing safety of capital and investment flexibility through an investment in
a portfolio of U.S. Treasury Obligations that is backed by the full faith and
credit of the United States government. The U.S. Treasury Portfolio Series were
also formed for the purpose of providing protection against changes in interest
rates and also passing through to Unitholders in all states the exemption from
state personal income taxes afforded to direct owners of U.S. obligations. The
value of the Units, the estimated current return and estimated long-term return
to new purchasers will fluctuate with the value of the Securities included in a
portfolio which will generally increase or decrease inversely with changes in
interest rates.
The U.S. Treasury Portfolio Series may be an appropriate investment vehicle for
investors who desire to participate in a portfolio of taxable, fixed income
securities offering the safety of capital provided by an investment backed by
the full faith and credit of the United States. In addition, many investors may
benefit from the exemption from state and local personal income taxes that will
pass through the U.S. Treasury Portfolio Series to Unitholders in virtually all
states.
In selecting U.S. Treasury Obligations for deposit in the U.S. Treasury
Portfolio Series, the following factors, among others were, considered by the
Sponsor: (a) the types of such obligations available; (b) the prices and yields
of such obligations relative to other comparable obligations, including the
extent to which such obligations are traded at a premium or at a discount from
par; and (c) the maturities of such obligations.
RISK FACTORS
The Securities are direct obligations of the United States and are backed by
its full faith and credit although the Units of a Trust are not so backed. The
Securities are not rated but in the opinion of the Sponsor have credit
characteristics comparable to those of securities rated "AAA" by nationally
recognized rating agencies.
An investment in Units of a Trust should be made with an understanding of the
risks which an investment in fixed rate debt obligations may entail, including
the risk that the value of the Securities and hence the Units will decline with
increases in interest rates. The high inflation of past years, together with
the fiscal measures adopted to attempt to deal with it, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate debt
obligations generally. The Sponsor cannot predict whether such fluctuations
will continue in the future. For a discussion of other considerations
associated with an investment in Units, see "General Information--Trust
Information."
US-1
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
U.S. TREASURY PORTFOLIO, SERIES 17
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT: OCTOBER 5, 1995
<TABLE>
<CAPTION>
COST OF
SECURITIES
FACE TO
AMOUNT COUPON MATURITIES TRUST(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$100,000 5.375% 05/31/1998 $ 98,703
100,000 5.500% 11/15/1998 98,406
87,000 6.750% 05/31/1999 88,142
13,000(2) 0.000% 05/15/1999 10,793
77,000 7.750% 11/30/1999 80,297
23,000(2) 0.000% 11/15/1999 18,446
98,000 6.250% 05/31/2000 97,280
2,000(2) 0.000% 05/15/2000 1,556
- -------- --------
$500,000 $493,623
======== ========
</TABLE>
- ---------------------
See "Notes to Portfolios."
U.S. TREASURY PORTFOLIO, SERIES 18
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT: OCTOBER 5, 1995
<TABLE>
<CAPTION>
COST OF
SECURITIES
FACE TO
AMOUNT COUPON MATURITIES TRUST(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 86,000 6.750% 05/31/1999 $ 87,062
14,000(2) 0.000% 05/15/1999 11,607
97,000 6.250% 05/31/2000 96,333
3,000(2) 0.000% 05/15/2000 2,325
78,000 8.000% 05/15/2001 82,863
22,000(2) 0.000% 05/15/2001 15,967
85,000 7.500% 05/15/2002 88,705
15,000(2) 0.000% 05/15/2002 10,132
100,000 6.250% 02/15/2003 97,516
- -------- --------
$500,000 $492,510
======== ========
</TABLE>
- ---------------------
See "Notes to Portfolios."
NOTES TO PORTFOLIOS:
(1) Some Securities may be represented by contracts to purchase such
Securities. During the initial offering period, evaluations of Securities
are made on the basis of current offering side evaluations of the
Securities. The aggregate offering price is greater than the aggregate bid
price of the Securities, which is the basis on which Redemption Prices
will be determined for purposes of redemption of Units after the initial
offering period. Other information regarding the Securities in the Trust
Funds, at the opening of business on the Initial Date of Deposit, is as
follows:
<TABLE>
<CAPTION>
U.S. U.S.
TREASURY TREASURY
SERIES SERIES
TRUST 17 18
----- -------- --------
<S> <C> <C>
Cost of Securities to Sponsor............................. $492,374 $491,259
Profit or (Loss) to Sponsor............................... $ 1,249 $ 1,251
Annual Interest Income to Trust........................... $ 28,840 $ 30,733
Bid Side Value of Securities.............................. $492,374 $491,259
</TABLE>
(2) This Security has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Securities
which pay no interest are normally described as "zero coupon" bonds. Over
the life of Securities purchased at a deep discount the value of such
Securities will increase such that upon maturity the holders of such
securities will receive 100% of the principal amount thereof.
US-2
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
(1) Each Trust is not an association taxable as a corporation for Federal
income tax purposes and each Unitholder will be treated as the owner of a
pro rata portion of such Trust under the Internal Revenue Code of 1986, as
amended (the "Code") and income of such Trust will be treated as the income
of the Unitholders under the Code.
(2) Each Unitholder will have a taxable event when a Trust disposes of a
U.S. Treasury Obligation, or when the Unitholder redeems or sells his
Units. Unitholders must reduce the tax basis of their Units for their share
of accrued interest received by a Trust, if any, on U.S. Treasury
Obligations delivered after the Unitholders pay for their Units to the
extent that such interest accrued on such U.S. Treasury Obligations during
the period from the Unitholder's settlement date to the date such U.S.
Treasury Obligations are delivered to a Trust and, consequently, such
Unitholders may have an increase in taxable gain or reduction in capital
loss upon the disposition of such Units. Gain or loss upon the sale or
redemption of Units is measured by comparing the proceeds of such sale or
redemption with the adjusted basis of the Units. If the Trustee disposes of
U.S. Treasury Obligations (whether by sale, payment on maturity, redemption
or otherwise), gain or loss is recognized to the Unitholder. The amount of
any such gain or loss is measured by comparing the Unitholder's pro rata
share of the total proceeds from such disposition with the Unitholder's
basis for his or her fractional interest in the asset disposed of. In the
case of a Unitholder who purchases Units, such basis (before adjustment for
earned original issue discount, amortized bond premium and accrued market
discount (if the Unitholder has elected to include such market discount in
income as it accrues), if any) is determined by apportioning the cost of
the Units among each of a Trust assets ratably according to value as of the
valuation date nearest the date of acquisition of the Units. The tax basis
reduction requirements of said Code relating to amortization of bond
premium may, under some circumstances, result in the Unitholder realizing a
taxable gain when his Units are sold or redeemed for an amount equal to his
original cost.
(3) Certain Trusts may contain "zero coupon" Stripped Treasury Securities.
The basis of each Unit and of each U.S. Treasury Obligation which was
issued with original issue discount must be increased by the amount of
accrued original issue discount and the basis of each unit and of each U.S.
Treasury Obligation which was purchased by a Trust at a premium must be
reduced by the annual amortization of bond premium which the Unitholder has
properly elected to amortize under Section 171 of the Code. The Stripped
Treasury Securities held by a Trust are treated as bonds that were
originally issued at an original issue discount provided, pursuant to a
Treasury Regulation (the "Regulation") issued on December 28, 1992, that
the amount of original issue discount determined under Section 1286 of the
Code is not less than a "de minimis" amount as determined thereunder.
Because the Stripped Treasury Securities represent interests in "stripped"
U.S. Treasury bonds, a Unitholder's initial cost for his pro rata portion
of each Stripped Treasury Security held by a Trust (determined at the time
he acquires his Units, in the manner described above) will be treated as
its "purchase price" by the Unitholder. Original issue discount is
effectively treated as interest for Federal income tax purposes, and the
amount of original issue discount in this case is generally the difference
between the bond's purchase price and its stated redemption price at
maturity. A Unitholder will be required to include in gross income for each
taxable year the sum of his daily portions of original issue discount
attributable to the Stripped Treasury Securities held by a Trust as such
original issue discount accrues and will, in general, be subject to Federal
income tax with respect to the total amount of such original issue discount
that accrues for such year even though the income is not distributed to the
Unitholders during such year to the extent it is not less than a
US-3
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
"de minimis" amount as determined under the Regulation. To the extent the
amount of such discount is less than the respective "de minimis" amount,
such discount shall be treated as zero. In general, original issue discount
accrues daily under a constant interest rate method which takes into
account the semi-annual compounding of accrued interest. In the case of the
Stripped Treasury Securities, this method will generally result in an
increase amount of income to the Unitholders each year. Unitholders should
consult their tax advisers regarding the Federal income tax consequences
and accretion of original issue discount.
(4) The Unitholder's aliquot share of the total proceeds received on the
disposition of, or principal paid with respect to, a U.S. Treasury
Obligation held by a Trust will constitute ordinary income (which will be
treated as interest income for most purposes) to the extent it does not
exceed the accrued market discount on such U.S. Treasury Obligation that
has not previously been included in taxable income by such Unitholder. A
Unitholder may generally elect to include market discount in income as such
discount accrues. In generally, market discount is the excess, if any, of
the Unitholder's pro rata portion of the outstanding principal balance of a
U.S. Treasury Obligation over the Unitholder's initial tax cost for such
pro rata portion, determined at the time such Unitholder acquires his
Units. However, market discount with respect to any U.S. Treasury
Obligation will generally be considered zero if it amounts to less than
.025% of the obligation's stated redemption price at maturity times the
number of years to maturity. The market discount rules do not apply to
Stripped Treasury Securities because they are stripped debt instruments
subject to special original issue discount rules as discussed above. If a
Unitholder sells his Units, gain, if any, will constitute ordinary income
to the extent of the aggregate of the accrued market discount on the
Unitholder's pro rata portion of each U.S. Treasury Obligation that is held
by a Trust that has not previously been included in taxable income by such
Unitholder. In general, market discount accrues on a ratable basis unless
the Unitholder elects to accrue such discount on a constant interest rate
basis. However, a unitholder should consult his own tax adviser regarding
the accrual of market discount. The deduction by a Unitholder for any
interest expense incurred to purchase or carry Units will be reduced by the
amount of any accrued market discount that has not yet been included in
taxable income by such Unitholder. In general, the portion of any interest
expense which is not currently deductible would be ultimately deductible
when the accrued market discount is included in income. Unitholders should
consult their own tax advisers regarding whether an election should be made
to include market discount in income as it accrues and as to the amount of
interest expense which may not be currently deductible.
(5) The Code provides that "miscellaneous itemized deductions" are
allowable only to the extent that they exceed two percent of an individual
taxpayer's adjusted gross income. Miscellaneous itemized deductions subject
to this limitation under present law include a Unitholder's pro rata share
of expenses paid by a Trust, including fees of the Trustee and the
Evaluator but does not include amortizable bond premium on U.S. Treasury
Obligations held by a Trust.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital gains
are taxed at a comparatively lower rate under the Tax Act, the Tax Act
includes a provision that recharacterizes capital gains as ordinary income in
the case of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
The Sponsor believes that Unitholders who are individuals will not be subject
to any state personal income taxes on the interest received by a Trust and
distributed to them. However, Unitholders (including
US-4
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
individuals) may be subject to state and local taxes on any capital gains (or
market discount treated as ordinary income) derived from a Trust and to other
state and local taxes (including corporate income or franchise taxes, personal
property or intangibles taxes, and estate or inheritance taxes) on their Units
or the income derived therefrom. In addition, individual Unitholders (and any
other Unitholders which are not subject to state and local taxes on the
interest income derived from a Trust) will probably not be entitled to a
deduction for state and local tax purposes for their share of the fees and
expenses paid by a Trust, for any amortized bond premium or for any interest
on indebtedness incurred to purchase or carry their Units. Therefore, even
though the Sponsor believes that interest income from a Trust is exempt from
state personal income taxes in all states Unitholders should consult their own
tax advisers with respect to state and local taxation.
A Unitholder of a Trust who is not a citizen or resident of the United States
or a United States domestic corporation (a "Foreign Investor") will not be
subject to U.S. Federal income taxes, including withholding taxes on amounts
distributed from such Trust (including any original issue discount) on, or any
gain from the sale or other disposition of, his Units or the sale or
disposition of any U.S. Treasury Obligations by the Trustee, provided that (i)
the interest income or gain is not effectively connected with the conduct by
the Foreign Investor of a trade or business within the United States, (ii)
with respect to any gain, the Foreign Investor (if an individual) is not
present in the United States for 183 days or more during the taxable year, and
(iii) the Foreign Investor provides the required certification of his status
and of the matters contained in clauses (i) and (ii) above, and further
provided that the exemption from withholding for U.S. Federal income taxes for
interest on any U.S. Treasury Obligation shall only apply to the extent the
U.S. Treasury Obligation was issued by July 18, 1984.
Unless an applicable treaty exemption applies and proper certification is
made, amounts otherwise distributable by the Trust to a Foreign Investor will
generally be subject to withholding taxes under Section 1441 of the Code
unless the Unitholder timely provides his financial representative or the
Trustee with a statement that (i) is signed by the Unitholder under penalties
of perjury, (ii) certifies that such Unitholder is not a United States person,
or in the case of an individual, that he is neither a citizen nor a resident
of the United States, and (iii) provides the name and address of the
Unitholder. The statement may be made, at the option of the person otherwise
required to withhold, on Form W-8 or on a substitute form that is
substantially similar to Form W-8. If the information provided on the
statement changes, the beneficial owner must so inform the person otherwise
required to withhold within 30 days of such change. On December 7, 1995, the
U.S. Treasury Department released proposed legislation that, if adopted, could
affect the United States federal income taxation of such non-United States
Unitholders and the portion of the Trust's income allocable to non-United
States Unitholders. Similar language, which would be effective on the date of
enactment, was included in the Health Insurance Reform Bill as passed by the
U.S. Senate on April 23, 1996.
Foreign Unitholders should consult their own tax advisers with respect to the
foreign and United States tax consequences or ownership of Units.
It should be remembered that even if distributions are reinvested, they are
still treated as distributions for income tax purposes.
It should also be remembered that Unitholders may be required for Federal
income tax purposes to include amounts in ordinary gross income in advance of
the receipt of the cash attributable to such income.
US-5
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
Each Unitholder (other than a foreign investor who has properly provided the
certifications described above) will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder had not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by a
Trust to such Unitholder will be subject to back up withholding.
TAX REPORTING AND REALLOCATION
Because each Trust receives interest and makes monthly distributions based
upon such Trust's expected total collections of interest and any anticipated
expenses, certain tax reporting consequences may arise. Each Trust is required
to report Unitholder information to the Internal Revenue Service ("IRS"),
based upon the actual collection of interest by such Trust on the securities
in such Trust, without regard to such Trust's expenses or to such Trust's
payments to Unitholders during the year. If distributions to Unitholders
exceed interest collected, the difference will be reported as a return of
principal which will reduce a Unitholder's cost basis in its Units (and its
pro rata interest in the securities in the Trust). A Unitholder must include
in taxable income the amount of income reported by a Trust to the IRS
regardless of the amount distributed to such Unitholder. If a Unitholder's
share of taxable income exceeds income distributions made by a Trust to such
Unitholder, such excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible by an
individual Unitholder as an itemized deduction except to the extent that the
total amount of certain itemized deductions, such as investment expenses
(which would include the Unitholder's share of Trust expenses), tax return
preparation fees and employee business expenses, exceeds 2% of such
Unitholder's adjusted gross income. Alternatively, in certain cases, such
excess may represent an increase in the Unitholder's tax basis in the Units
owned. Investors with questions regarding these issues should consult with
their tax advisers.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The tables below set forth the per Unit estimated distributions of interest
and principal to Unitholders. The tables assume no changes in Trust expenses,
no redemptions or sales of the underlying U.S. Treasury Obligations prior to
maturity and the receipt of all principal due upon maturity. To the extent the
foregoing assumptions change actual distributions will vary.
U.S. TREASURY PORTFOLIO SERIES 17
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Jun 15, 1996 $0.02813 $0.02813
Jul 15, 1996 to May 15, 1998 $0.04688 $0.04688
Jun 15, 1998 $0.04240 $2.00000 $2.04240
Jul 15, 1998 to Nov 15, 1998 $0.03608 $0.03608
Dec 15, 1998 $0.03350 $2.00000 $2.03350
Jan 15, 1999 to May 15, 1999 $0.02908 $0.02908
Jun 15, 1999 $0.02419 $2.00000 $2.02419
Jul 15, 1999 to Nov 15, 1999 $0.01948 $0.01948
Dec 15, 1999 $0.01451 $2.00000 $2.01451
Jan 15, 2000 to May 15, 2000 $0.00968 $0.00968
Jun 15, 2000 $0.00458 $2.00000 $2.00458
</TABLE>
US-6
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
U.S. TREASURY PORTFOLIO SERIES 18
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Jun 15, 1996 $0.03003 $0.03003
Jul 15, 1996 to May 15, 1999 $0.05005 $0.05005
Jun 15, 1999 $0.04522 $2.00000 $2.04522
Jul 15, 1999 to May 15, 2000 $0.04055 $0.04055
Jun 15, 2000 $0.03550 $2.00000 $2.03550
Jul 15, 2000 to May 15, 2001 $0.03065 $0.03065
Jun 15, 2001 $0.02545 $2.00000 $2.02545
Jul 15, 2001 to May 15, 2002 $0.02035 $0.02035
Jun 15, 2002 $0.01504 $2.00000 $2.01504
Jul 15, 2002 to Feb 15, 2003 $0.00885 $0.00885
Mar 15, 2003 $0.00465 $2.00000 $2.00485
</TABLE>
US-7
U.S. TREASURY PORTFOLIO SERIES
<PAGE>
T
A
X
E
X
E
M
P
T
P
O
R
T
F
O
L
I
O
S
THE TAX-EXEMPT PORTFOLIOS
THE TRUST PORTFOLIO
The Tax-Exempt Portfolios may be appropriate investment vehicles for investors
who desire to participate in a portfolio of tax-exempt fixed income securities
with greater diversification than they might be able to acquire individually.
In addition, Municipal Bonds of the type deposited in the Tax-Exempt
Portfolios are often not available in small amounts.
The selection of Municipal Bonds for each Trust was based largely upon the
experience and judgment of the Sponsor. In making such selections the Sponsor
considered the following factors: (a) Standard & Poor's or Moody's ratings of
the Municipal Bonds; (b) the price of the Municipal Bonds relative to other
issues of similar quality and maturity; (c) the diversification of the
Municipal Bonds as to purpose of issue; (d) the income to the Unitholders of
the Trust; (e) in the case of Insured Trust Funds whether such Bonds were
insured or the availability and cost of insurance for the scheduled payment of
principal and interest on the Municipal Bonds; and (f) the dates of maturity
of the Bonds.
All of the Municipal Bonds in each Trust Fund's portfolio are rated in the
category "BBB" or better (including provisional or conditional ratings) by
Standard & Poor's or "Baa" or better by Moody's. See "Portfolio" for each Tax-
Exempt Portfolio.
All Municipal Bonds deposited in the Trust Funds on the Initial Date of
Deposit were represented by purchase contracts assigned to the Trustee
together with cash, cash equivalents or irrevocable letters of credit issued
by a major commercial bank in the amounts necessary to complete the purchase
thereof. Each Trust consists of that number of Municipal Bonds divided by
purpose of issues (and percentage of principal amount of such Trust) as set
forth in the following table.
SERIES INFORMATION
<TABLE>
<CAPTION>
INSURED
MICHIGAN
SERIES
14
--------
<S> <C>
Number of Obligations................................................. 7
Territorial Obligations (1)........................................... None
General Obligation Bonds (2)(3)....................................... 3 (38%)
Revenue Bonds (4)(3).................................................. 4 (62%)
Revenue Bond Concentrations (3):
Correctional Facilities..............................................
Excise Tax Revenue...................................................
Sales Tax Revenue....................................................
Electric Systems.....................................................
Utilities............................................................
Hospital............................................................. 2 (28%)
Pollution Control....................................................
Lease Revenue........................................................
Education............................................................ 1 (15%)
Wastewater...........................................................
Water & Sewer........................................................ 1 (19%)
Tax Allocation.......................................................
Tollroad.............................................................
Miscellaneous........................................................
Average life of the Municipal Bonds in the Trust (5).................. 27 years
Percentage of "when, as and if issued" or "delayed delivery" Bonds
purchased by the Trust............................................... 9%
Syndication (6)....................................................... 9%
</TABLE>
TE-1
TAX-EXEMPT PORTFOLIOS
<PAGE>
- ---------------------
(1) Municipal Bonds issued by Territories of the United States (which term
includes the Commonwealth of Puerto Rico and the District of Columbia)
generally receive the same tax exempt treatment for both state and Federal
tax purposes as Municipal Bonds issued by political entities in the named
State Trust. See "State Risk Factors and State Tax Status" for each Trust.
(2) General obligation bonds are general obligations of governmental entities
and are backed by the taxing powers of such entities.
(3) The portfolio percentage in parenthesis represents the principal amount of
such Bonds to the total principal amount of Bonds in the Trust. For a
discussion of the risk associated with investments in the bonds of such
issuers, see "Municipal Bond Risk Factors" below.
(4) Revenue bonds are payable from the income of a specific project or
authority and are not supported by an issuer's power to levy taxes.
(5) The average life of the Bonds in a Trust is calculated based upon the
stated maturities of the Bonds in such Trust (or, with respect to Bonds
for which funds or securities have been placed in escrow to redeem such
Bonds on a stated call date, based upon such call date). The average life
of the Bonds in a Trust may increase or decrease from time to time as
Bonds mature or are called or sold.
(6) The Sponsor and/or affiliated Underwriters have participated as either the
sole underwriter or manager or a member of underwriting syndicates from
which approximately that percentage listed above of the aggregate
principal amount of the Bonds in such Trust were acquired.
TE-2
TAX-EXEMPT PORTFOLIOS
<PAGE>
TAXABLE EQUIVALENT ESTIMATED CURRENT RETURN TABLES
As of the date of this 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 1996. 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 table assumes 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, and have been rounded to the nearest 1/10 of 1%. The
table does 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 $117,950. 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 Federal tax rate to approximately 44 percent for
taxpayers filing a joint return and entitled to four personal exemptions and
to approximately 41 percent for taxpayers filing a single return entitled to
only one personal exemption. These limitations are subject to certain
maximums, which depend on the number of exemptions claimed and the total
amount of the taxpayer's itemized deductions. For example, the limitation on
itemized deductions will not cause a taxpayer to lose more than 80% of his
allowable itemized deductions, with certain exceptions. See "Federal Tax
Status" for a more detailed discussion of recent Federal tax legislation,
including a discussion of provisions affecting corporations.
MICHIGAN
<TABLE>
<CAPTION>
TAXABLE INCOME
($1,000'S) TAX-EXEMPT ESTIMATED CURRENT RETURN
- ------------------------ -------------------------------------------
4 5 6
4% 1/2% 5% 1/2% 6% 1/2% 7%
SINGLE JOINT EQUIVALENT TAXABLE ESTIMATED CURRENT
RETURN RETURN TAX BRACKET* RETURN
------ ------ ------------ -------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-
24.00 $ 0- 40.10 20.2% 5.01% 5.64% 6.27% 6.89% 7.52% 8.15% 8.77%
24.00-
58.15 40.10- 96.90 32.4 5.92 6.66 7.40 8.14 8.88 9.62 10.36
58.15-
121.30 96.90-147.70 35.2 6.17 6.94 7.72 8.49 9.26 10.03 10.80
121.30-
263.75 147.70-263.75 39.9 6.66 7.49 8.32 9.15 9.98 10.82 11.65
Over
263.75 Over 263.75 43.3 7.05 7.94 8.82 9.70 10.58 11.46 12.35
</TABLE>
- --------
*The combined State and Federal tax brackets includes both the individual
income tax rate and the Michigan intangible tax rate, because the intangible
tax is generally based on income received from intangibles.
TE-3
TAX-EXEMPT PORTFOLIOS
<PAGE>
INSURED MICHIGAN
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47
SERIES 14
PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: MAY 8, 1996
<TABLE>
<CAPTION>
NAME OF ISSUER, TITLE,
COUPON RATE AND MATURITY
DATE OF BOND
REPRESENTED BY SPONSOR'S
AGGREGATE CONTRACTS TO PURCHASE REDEMPTION COST OF BONDS
PRINCIPAL BONDS(1)(5) RATING(2) PROVISIONS(1) TO TRUST(4)
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 500,000 Michigan Hospital Finance AAA 2003 @ 102 $ 468,945
Authority, Hospital 2014 @ 100 S.F.
Revenue Refunding Bonds
(Oakwood Hospital
Obligated Group) Series
1993A (FGIC Insured),
5.625% Due 11/1/2018
250,000 City of Marquette, AAA 2006 @ 102 248,745
Michigan, Hospital
Finance Revenue Refunding
Bonds (Marquette General
Hospital) Series D (FSA
Insured), 6.1% Due
4/1/2019
250,000 Marysville Public AAA 2004 @ 101 241,950
Schools, County of St. 2016 @ 100 S.F.
Clair, State of Michigan,
1995 School Building and
Site Bonds (General
Obligation Unlimited Tax)
(FGIC Insured), 5.75% Due
5/1/2019
500,000 Paw Paw Public Schools, AAA 2005 @ 100 470,240
County of Van Buren, 2016 @ 100 S.F.
State of Michigan 1995
School Building and Site
Bonds (General
Obligation-Unlimited Tax)
(FGIC Insured), 5.625%
Due 5/1/2025
250,000 Holly, Michigan Area AAA 2005 @ 101 236,730
School District, 1995 2021 @ 100 S.F.
School Building Bonds
(FGIC Insured), 5.625%
Due 5/1/2025
500,000 City of Detroit, AAA 2005 @ 101 457,375
Michigan, Water Supply 2016 @ 100 S.F.
System Revenue, Second
Lien Bonds, Series 1995-A
(MBIA Insured), 5.5% Due
7/1/2025
405,000 Board of Trustees of AAA 2005 @ 102 386,856
Oakland University 2016 @ 100 S.F.
(Michigan), General
Revenue Bonds, Series
1995 (MBIA Insured),
5.75% Due 5/15/2026
---------- ----------
$2,655,000 $2,510,841
========== ==========
</TABLE>
- --------
See "Notes to Portfolios."
TE-4
TAX-EXEMPT PORTFOLIOS
<PAGE>
NOTES TO PORTFOLIO:
All insured Bonds in the Trust Funds are insured only by the insurer indicated
in the description. The insurance was obtained directly by the issuer of the
Bonds or by the Sponsor.
(P) This Bond was issued at an original issue discount.The tax effect of Bonds
issued at an original issue discount is described in "Federal Tax Status."
(S) These Municipal Bonds are "when, as and if issued" or "delayed delivery"
and have expected settlement dates after the "First Settlement Date."
Interest on these Bonds begins accruing to the benefit of Unitholders on
the date of delivery.
(C) This Bond is of the same issue as another Bond in the Trust.
(D) This issue of Bonds is secured by, and payable from, escrowed U.S.
Government securities.
(1) Contracts to acquire Municipal Bonds were entered into by the Sponsor
between May 2, 1996 and May 7, 1996. All Bonds are represented by regular
way contracts, unless otherwise indicated, for the performance of which an
irrevocable letter of credit has been deposited with the Trustee.
(2) The ratings have been provided by Cantor Fitzgerald & Co. as reported to
Cantor Fitzgerald & Co. by the respective rating agencies. All ratings
represent Standard & Poor's ratings unless marked with the symbol "*" in
which case the rating represents a Moody's Investors Service, Inc. rating.
A brief description of the applicable Standard & Poor's and Moody's rating
symbols and their meanings is set forth under "Appendix: Description of
Ratings" or under "General Information--Rating of Units." A rating marked
by "[_]" is contingent upon Standard & Poor's receiving final
documentation from the insurer.
(3) There is shown under this heading the year in which each issue of
Municipal Bonds is initially redeemable and the redemption price for that
year; unless otherwise indicated, each issue continues to be redeemable at
declining prices thereafter, but not below par value. The prices at which
the Bonds may be redeemed or called prior to maturity may or may not
include a premium and, in certain cases, may be less than the cost of the
Bonds to the Trust. In addition, certain Bonds in the portfolio may be
redeemed in whole or in part other than by operation of the stated
redemption or sinking fund provisions under certain unusual or
extraordinary circumstances specified in the instruments setting forth the
terms and provisions of such Bonds. "S.F." indicates that a sinking fund
is established with respect to an issue of Municipal Bonds.
(4) During the initial offering period, evaluations of Municipal Bonds are
made on the basis of current offering side evaluations of the Municipal
Bonds. The aggregate offering price is greater than the aggregate bid
price of the Municipal Bonds, which is the basis on which Redemption
Prices will be determined for purposes of redemption of Units after the
initial offering period.
(5) Other information regarding the Municipal Bonds in the Trust Funds, at the
opening of business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
INSURED
MICHIGAN
SERIES 14
----------
<S> <C>
Cost of Bonds to Sponsor......................................... $2,503,344
Profit or (Loss) to Sponsor...................................... $ 7,497
Annual Interest Income to Trust.................................. $ 150,725
Bid Side Value of Bonds.......................................... $2,492,886
</TABLE>
Neither Cost of Bonds to Sponsor nor Profit or (Loss) to Sponsor reflects
underwriting profits or losses received or incurred by the Sponsor through
its participation in underwriting syndicates but such amounts reflect
portfolio hedging transaction costs, hedging gains or losses, certain other
carrying costs and the cost of insurance obtained by the Sponsor, if any,
prior to the Initial Date of Deposit for individual Bonds.
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<PAGE>
MUNICIPAL BOND RISK FACTORS
Certain of the Bonds in the Trust Funds 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 or other specific revenue source. There are, of
course, variations in the security of the different Bonds in the Trust Funds,
both within a particular classification and between classifications, depending
on numerous factors.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are derived from services provided by hospitals and other health care
facilities, including nursing homes. Ratings of bonds issued for health care
facilities are often based on feasibility studies that contain projections of
occupancy levels, revenues and expenses. A facility's gross receipts and net
income available for debt service will be affected by future events and
conditions including, among other things, demand for services and the ability
of the facility to provide the services required, physicians' confidence in
the facility, management's capabilities, economic developments in the service
area, competition, efforts by insurers and governmental agencies to limit
rates, legislation establishing state rate-setting agencies, expenses, the
cost and possible unavailability of malpractice insurance, the funding of
Medicare, Medicaid and other similar third party payor programs, and
government regulation. Federal legislation has been enacted which implements a
system of prospective Medicare reimbursement which may restrict the flow of
revenues to hospitals and other facilities which are reimbursed for services
provided under the Medicare program. Future legislation or changes in the
areas noted above, among other things, would affect all hospitals to varying
degrees and, accordingly, any adverse changes in these areas may affect the
ability of such issuers to make payments of principal and interest on
Municipal Bonds held in the portfolios of the Trust Funds. Such adverse
changes also may affect the ratings of the Municipal Bonds held in the
portfolios of the Trust Funds.
Certain of the Bonds in the Trust Funds may be single family mortgage revenue
bonds, which are issued for the purpose of acquiring from originating
financial institutions notes secured by mortgages on residences located within
the issuer's boundaries and owned by persons of low or moderate income.
Mortgage loans are generally partially or completely prepaid prior to their
final maturities as a result of events such as sale of the mortgaged premises,
default, condemnation or casualty loss. Because these 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. The redemption price of such issues may be more or less than the
offering price of such Bonds. Extraordinary mandatory redemption without
premium could also result from the failure of the originating financial
institutions to make mortgage loans in sufficient amounts within a specified
time period or, in some cases, from the sale by the Bond issuer of the
mortgage loans. Failure of the originating financial institutions to make
mortgage loans would be due principally to the interest rates on mortgage
loans funded from other sources becoming competitive with the interest rates
on the mortgage loans funded with the proceeds of the single family mortgage
revenue bonds. Additionally, unusually high rates of default on the underlying
mortgage loans may reduce revenues available for the payment of principal of
or interest on such mortgage revenue bonds. Single family mortgage revenue
bonds issued after December 31, 1980 were issued under Section 103A of the
Internal Revenue Code of 1954, which Section contains certain ongoing
requirements relating to the use
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<PAGE>
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 ongoing 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. There can be no
assurances that the ongoing requirements will be met. The failure to meet
these requirements could cause the interest on the Bonds to become taxable,
possibly retroactively from the date of issuance.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are primarily derived from mortgage loans to housing projects for low
to moderate income families. The ability of such issuers to make debt service
payments will be affected by events and conditions affecting financed
projects, including, among other things, the achievement and maintenance of
sufficient occupancy levels and adequate rental income, increases in taxes,
employment and income conditions prevailing in local labor markets, utility
costs and other operating expenses, the managerial ability of project
managers, changes in laws and governmental regulations, the appropriation of
subsidies and social and economic trends affecting the localities in which the
projects are located. The occupancy of housing projects may be adversely
affected by high rent levels and income limitations imposed under Federal and
state programs. Like single family mortgage revenue bonds, multi-family
mortgage revenue bonds are subject to redemption and call features, including
extraordinary mandatory redemption features, upon prepayment, sale or non-
origination of mortgage loans as well as upon the occurrence of other events.
Certain issuers of single or multi-family housing bonds have considered
various ways to redeem bonds they have issued prior to the stated first
redemption dates for such bonds. In connection with the housing Bonds held by
the Trust Funds, the Sponsor has not had any direct communications with any of
the issuers thereof, but at the Initial Date of Deposit it 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.
However, there can be no assurance that an issuer of a Bond in the Trusts will
not attempt to so redeem a Bond in the Trust Funds.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are derived from the sale of water and/or sewerage services. Water
and sewerage bonds are generally payable from user fees. Problems faced by
such issuers include the ability to obtain timely and adequate rate increases,
a decline in population resulting in decreased user fees, the difficulty of
financing large construction programs, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
increasing difficulty of obtaining or discovering new supplies of fresh water,
the effect of conservation programs and the impact of "no-growth" zoning
ordinances. Issuers may have experienced these problems in varying degrees.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are primarily derived from the sale of electric energy or natural
gas. Utilities are generally subject to extensive regulation by state utility
commissions which, among other things, establish the rates which may be
charged and the appropriate rate of return on an approved asset base. The
problems faced by such issuers include the difficulty in obtaining approval
for timely and adequate rate increases from the governing public utility
commission, the difficulty in financing large construction programs, the
limitations on operations and increased costs and delays attributable to
environmental considerations, increased competition, recent reductions in
estimates of future demand for electricity in certain areas of the country,
the difficulty of the capital market in absorbing utility debt, the difficulty
in obtaining fuel at reasonable prices and the effect of energy conservation.
Issuers may have experienced these problems in varying degrees. In addition,
Federal, state and municipal governmental authorities may from time to time
review existing and impose additional regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely affect
the ability of the issuers of such Bonds to make payments of principal and/or
interest on such Bonds.
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TAX-EXEMPT PORTFOLIOS
<PAGE>
Certain of the Bonds in the Trust Funds may be industrial revenue bonds
("IRBs"), including pollution control revenue bonds, which are tax-exempt
securities issued by states, municipalities, public authorities or similar
entities to finance the cost of acquiring, constructing or improving various
industrial projects. These projects are usually operated by corporate
entities. Issuers are obligated only to pay amounts due on the IRBs to the
extent that funds are available from the unexpended proceeds of the IRBs or
receipts or revenues of the issuer under an arrangement between the issuer and
the corporate operator of a project. The arrangement may be in the form of a
lease, installment sale agreement, conditional sale agreement or loan
agreement, but in each case the payments to the issuer are designed to be
sufficient to meet the payments of amounts due on the IRBs. Regardless of the
structure, payment of IRBs is solely dependent upon the creditworthiness of
the corporate operator of the project or corporate guarantor. Corporate
operators or guarantors may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or industry.
These include cyclicality of revenues and earnings, regulatory and
environmental restrictions, litigation resulting from accidents or
environmentally-caused illnesses, extensive competition and financial
deterioration resulting from leveraged buy-outs or takeovers. The IRBs in the
Trust Funds may be subject to special or extraordinary redemption provisions
which may provide for redemption at par or, with respect to original issue
discount bonds, at issue price plus the amount of original issue discount
accreted to the redemption date plus, if applicable, a premium. The Sponsor
cannot predict the causes or likelihood of the redemption date plus, if
applicable, a premium. The Sponsor cannot predict the causes or likelihood of
the redemption of IRBs or other Bonds in the Trust Funds prior to the stated
maturity of such Bonds.
Certain of the Bonds in the Trust Funds may be obligations which are payable
from and secured by revenues derived from the ownership and operation of
facilities such as airports, bridges, turnpikes, port authorities, convention
centers and arenas. The major portion of an airport's gross operating income
is generally derived from fees received from signatory airlines pursuant to
use agreements which consist of annual payments for leases, occupancy of
certain terminal space and service fees. Airport operating income may
therefore be affected by the ability of the airlines to meet their obligations
under the use agreements. The air transport industry is experiencing
significant variations in earnings and traffic, due to increased competition,
excess capacity, increased costs, deregulation, traffic constraints and other
factors, and several airlines are experiencing severe financial difficulties.
The Sponsor cannot predict what effect these industry conditions may have on
airport revenues which are dependent for payment on the financial condition of
the airlines and their usage of the particular airport facility. Similarly,
payment on 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 in the Trust Funds 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
eduction systems, from tuition, dormitory revenues, grants and endowments.
General problems relating to school bonds include litigation contesting the
state constitutionality of financing public eduction in part from ad valorem
taxes, thereby creating a disparity in educational funds available to schools
in wealthy areas and schools in poor areas. Litigation or legislation on this
issue may affect the sources of funds available for the payment of school
bonds in the Trusts. General problems relating to college and university
obligations would include the prospect of a declining percentage of the
population consisting of "college" age individuals, possible inability to
raise tuition and fees sufficiently to cover increased operating costs, the
uncertainty of continued receipt of Federal grants and state
TE-8
TAX-EXEMPT PORTFOLIOS
<PAGE>
funding and new government legislation or regulations which may adversely
affect the revenues or costs of such issuers. All of such issuers have been
experiencing certain of these problems in varying degrees.
Certain of the Bonds in the Trust Funds may be Urban Redevelopment Bonds
("URBs"). URBs have generally been issued under bond resolutions pursuant to
which the revenues and receipts payable under the arrangements with the
operator of a particular project have been assigned and pledged to purchasers.
In some cases, a mortgage on the underlying project may have been granted as
security for the URBs. Regardless of the structure, payment of the URBs is
solely dependent upon the creditworthiness of the operator of the project.
Certain of the Bonds in the Trust Funds may be lease revenue bonds whose
revenues are derived from lease payments made by a municipality or other
political subdivision which is leasing equipment or property for use in its
operation. The risks associated with owning Bonds of this nature include the
possibility that appropriation of funds for a particular project or equipment
may be discontinued. The Sponsor cannot predict the likelihood of
nonappropriation of funds for these types of lease revenue Bonds.
Certain of the Bonds in the Trust Funds may be sales and/or use tax revenue
bonds whose revenues are derived from the proceeds of a special sales or use
tax. Such taxes are generally subject to continuing Legislature approval.
Payments may be adversely affected by reduction of revenues due to decreased
use of a facility or decreased sales.
Investors should be aware that many of the Bonds in the Trust Funds are
subject to continuing requirements such as the actual use of Bond proceeds or
manner of operation of the project financed from Bond proceeds that may affect
the exemption of interest on such Bonds from Federal income taxation. Although
at the time of issuance of each of the Bonds in the Trusts an opinion of bond
counsel was rendered as to the exemption of interest on such obligations from
Federal income taxation, there can be no assurance that the respective issuers
or other obligors on such obligations will fulfill the various continuing
requirements established upon issuance of the Bonds. A failure to comply with
such requirements may cause a determination that interest on such obligations
is subject to Federal income taxation, perhaps even retroactively from the
date of issuance of such Bonds, thereby reducing the value of the Bonds and
subjecting Unitholders to unanticipated tax liabilities.
Federal bankruptcy statutes relating to the adjustment of debts of political
subdivisions or authorities of states of the United States provide that, in
certain circumstances, such subdivisions or authorities may be authorized to
initiate bankruptcy proceedings without prior notice to or consent of
creditors, which proceedings could result in material and adverse modification
or alteration of the rights of holders of obligations issued by such
subdivisions or authorities.
Certain of the Bonds in the Trust Funds may represent "moral obligations" of a
governmental entity other than the issuer. In the event that the issue of a
Municipal Bond defaults in the repayment thereof, the governmental entity
lawfully may, but is not obligated to, discharge the obligation of the issuer
to repay such Municipal Bond.
STATE RISK FACTORS AND STATE TAX STATUS
None of the special counsel to the various Trust Funds has expressed any
opinion regarding the completeness or materiality of any matters contained in
this Prospectus other than the tax opinions set forth under "Federal Tax
Status." For risks specific to the individual Trusts, see "Risk Factors" for
each Trust.
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TAX-EXEMPT PORTFOLIOS
<PAGE>
INSURED MICHIGAN SERIES 14
Risk Factors
Investors should be aware that the economy of the State of Michigan has, in
the past, proven to be cyclical, due primarily to the fact that the leading
sector of the State's economy is the manufacturing of durable goods. While the
State's efforts to diversity its economy have proven successful, as reflected
by the fact that the share of employment in the State in the durable goods
sector has fallen from 33.1 percent in 1960 to 17.9 percent in 1990, durable
goods manufacturing still represents a sizable portion of the State's economy.
As a result, any substantial national economic downturn is likely to have an
adverse effect on the economy of the State and on the revenues of the State
and some of its local governmental units.
In July 1995, Moody's Investors Service Inc. raised the State's general
obligation bond rating to "Aa". In October 1989, Standard & Poor's Ratings
Group raised its rating on the State's general obligation bonds to "AA".
The State's economy could continue to be affected by changes in the auto
industry, notably consolidation and plant closings resulting from competitive
pressures and over-capacity. Such actions could adversely affect State
revenues and the financial impact on the local units of government in the
areas in which plants are closed could be more severe. In addition, the State
is a party to various legal proceedings, some of which could, if unfavorably
resolved from the point of view of the State, substantially affect State
programs or finances.
In recent years, the State has reported its financial results in accordance
with generally accepted accounting principles. For the fiscal years ended
September 30, 1990 and 1991, the State reported negative year-end balances in
the General Fund/School Aid Fund of $310.4 million and $169.4 million,
respectively. The State ended each of the 1992, 1993, 1994 and 1995 fiscal
years with its General Fund/School Aid Fund in balance, after having made
substantial transfers to the Budget Stabilization Fund in 1993, 1994, and
1995. A positive cash balance in the combined General Fund/School Aid Fund was
recorded at September 30, 1990. In the 1991 through 1993 fiscal years, the
State experienced deteriorating cash balances which necessitated short-term
borrowing and the deferral of certain scheduled cash payments. The State did
not borrow for cash flow purposes in 1994, but borrowed $500 million on March
9, 1995, which was repaid on September 29, 1995 and $900 million on February
20, 1996, with a maturity date of September 30, 1996. The State's Budget
Stabilization Fund received transfers of $283 million in 1993, $464 million in
1994 and $320 million in 1995, bringing the balance in the Budget
Stabilization Fund after making certain transfers out, to $988 million at
September 30, 1995.
The Michigan Constitution of 1963 limits the amount of total revenues of the
State raised from taxes and certain other sources to a level for each fiscal
year equal to a percentage of the State's personal income for the prior
calendar year. In the event that the State's total revenues exceed the limit
by 1 percent or more, the Michigan Constitution of 1963 requires that the
excess be refunded to taxpayers.
On March 15, 1994, Michigan voters approved a school finance reform amendment
to the State's Constitution which, among other things, increased the State
sales tax rate from 4% to 6% and placed a cap on property assessment increases
for all property taxes. Concurrent legislation cut the State's income tax rate
from 4.6% to 4.4%, reduced some property taxes and altered local school
funding sources to a combination of property taxes and state revenues, some of
which is provided from other new or increased State taxes. The legislation
also contained other provisions that alter (and in some cases, may reduce) the
TE-10
<PAGE>
revenues of local units of government, and tax increment bonds could be
particularly affected. While the ultimate impact of the constitutional
amendment and related legislation cannot yet be accurately predicted,
investors should be alert to the potential effect of such measures upon the
operations and revenues of Michigan local units of government.
In addition, the State Legislature recently adopted a package of state tax
cuts, including a phase out of the intangibles tax, an increase in exemption
amounts for personal income tax, and reductions in the single business tax.
Although all or most of the Bonds in the Trust are revenue obligations or
general obligations of local governments or authorities rather than general
obligations of the State of Michigan itself, there can be no assurance that
any financial difficulties the State may experience will not adversely affect
the market value or marketability of the Bonds or the ability of the
respective obligors to pay interest on or principal of the Bonds, particularly
in view of the dependency of local governments and other authorities upon
State aid and reimbursement programs and, in the case of bonds issued by the
State Building Authority, the dependency of the State Building Authority on
the receipt of rental payments from the State to meet debt service
requirements upon such bonds. In the 1991 fiscal year, the State deferred
certain scheduled cash payments to municipalities, school districts,
universities and community colleges. While such deferrals were made up at
specified later dates, similar future deferrals could have an adverse impact
on the cash position of some local governmental units. Additionally, the State
reduced revenue sharing payments to municipalities below that level provided
under formulas by $10.9 million in the 1991 fiscal year and $34.4 million in
the 1992 fiscal year, $45.5 million in the 1993 fiscal year, $54.5 million in
the 1994 fiscal year, and $67.0 million (budgeted) in the 1995 fiscal year.
The Trust may contain general obligation bonds of local units of government
pledging the full faith and credit of the local unit which are payable from
the levy of ad valorem taxes on taxable property within the jurisdiction of
the local unit. Such bonds issued prior to December 22, 1978, or issued after
December 22, 1978 with the approval of the electors of the local unit, are
payable from property taxes levied without limitation as to rate or amount.
With respect to bonds issued after December 22, 1978, and which were not
approved by the electors of the local unit, the tax levy of the local unit for
debt service purposes is subject to constitutional, statutory and charter tax
rate limitations. In addition, several major industrial corporations have
instituted challenges of their ad valorem property tax assessments in a number
of local municipal units in the State. If successful, such challenges could
have an adverse impact on the ad valorem tax bases of such units which could
adversely affect their ability to raise funds for operation and debt service
requirements.
Michigan Tax Status
In the opinion of Miller, Canfield, Paddock and Stone, P.L.C. special counsel
to the Insured Michigan Series 14 (the "Insured Michigan Trust") for Michigan
tax matters, under existing Michigan law:
The Insured Michigan Trust and the owners of Units will be treated for
purposes of the Michigan income tax laws and the Single Business Tax in
substantially the same manner as they are for purposes of the Federal
income tax laws, as currently enacted. Accordingly, we have relied upon the
opinion of Chapman and Cutler as to the applicability of Federal income tax
under the Internal Revenue Code of 1986 to the Insured Michigan Trust and
the Unitholders.
Under the income tax laws of the State of Michigan, the Insured Michigan
Trust is not an association taxable as a corporation; the income of the
Insured Michigan Trust will be treated as the income of
TAX-EXEMPT PORTFOLIOS
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<PAGE>
the Unitholders and be deemed to have been received by them when received
by the Insured Michigan Trust. Interest on the underlying Bonds which is
exempt from tax under these laws when received by the Insured Michigan
Trust will retain its status as tax exempt interest to the Unitholders.
For purposes of the foregoing Michigan tax laws, each Unitholder will be
considered to have received his pro rata share of Bond interest when it is
received by the Insured Michigan Trust, and each Unitholder will have a
taxable event when the Insured Michigan Trust disposes of a Bond (whether
by sale, exchange, redemption or payment at maturity) or when the
Unitholder redeems or sells his Unit to the extent the transaction
constitutes a taxable event for Federal income tax purposes. The tax cost
of each unit to a Unitholder will be established and allocated for purposes
of these Michigan tax laws in the same manner as such cost is established
and allocated for Federal income tax purposes.
Under the Michigan Intangibles Tax, the Insured Michigan Trust is not
taxable and the pro rata ownership of the underlying Bonds, as well as the
interest thereon, will be exempt to the Unitholders to the extent the
Insured Michigan Trust consists of obligations of the State of Michigan or
its political subdivisions or municipalities, or of obligations of the
Commonwealth of Puerto Rico, Guam or of the United States Virgin Islands.
The Intangibles Tax is being phased out, with reductions of twenty-five
percent (25%) in 1994 and 1995, fifty percent (50%) in 1996, and seventy-
five percent (75%) in 1997, with total repeal effective January 1, 1998.
The Michigan Single Business Tax replaced the tax on corporate and
financial institution income under the Michigan Income Tax, and the
Intangible Tax with respect to those intangibles of persons subject to the
Single Business Tax the income from which would be considered in computing
the Single Business Tax. Persons are subject to the Single Business Tax
only if they are engaged in "business activity", as defined in the Act.
Under the Single Business Tax, both interest received by the Insured
Michigan Trust on the underlying Bonds and any amount distributed from
Insured Michigan Trust to a Unitholder, if not included in determining
taxable income for Federal income tax purposes, is also not included in the
adjusted tax base upon which the Single Business Tax is computed, of either
the Insured Michigan Trust or the Unitholders. If the Insured Michigan
Trust or the Unitholders have a taxable event for Federal income tax
purposes when the Insured Michigan Trust disposes of a Bond (whether by
sale, exchange, redemption or payment at maturity) or the Unitholder
redeems or sells his Unit, an amount equal to any gain realized from such
taxable event which was included in the computation of taxable income for
Federal income tax purposes (plus an amount equal to any capital gain of an
individual realized in connection with such event but excluded in computing
that individual's Federal taxable income) will be included in the tax base
against which, after allocation, apportionment and other adjustments, the
Single Business Tax is computed. The tax base will be reduced by an amount
equal to any capital loss realized from such a taxable event, whether or
not the capital loss was deducted in computing Federal taxable income in
the year the loss occurred. Unitholders should consult their tax advisor as
to their status under Michigan law.
Any proceeds paid under an insurance policy issued to the Trustee of the
Trust, or paid under individual policies obtained by issuers of Bonds,
which, when received by the Unitholders, represent maturing interest on
defaulted obligations held by the Trustee, will be excludable from the
Michigan income tax laws and the Single Business Tax if, and to the same
extent as, such interest would have been so excludable if paid by the
issuer of the defaulted obligations. While treatment under the Michigan
Intangibles Tax is not premised upon the characterization of such proceeds
under the Internal Revenue Code, the Michigan Department of Treasury should
adopt the same approach as under the Michigan income tax laws and the
Single Business Tax.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
As the Tax Reform Act of 1986 eliminates the capital gain deduction for tax
years beginning after December 31, 1986, the federal adjusted gross income,
the computation base for the Michigan Income Tax, of a Unitholder will be
increased accordingly to the extent such capital gains are realized when
the Insured Michigan Trust disposes of a Bond or when the Unitholder
redeems or sells a Unit, to the extent such transaction constitutes a
taxable event for Federal income tax purposes.
For a discussion of Federal tax matters relating to distributions from the
Trust Fund, see "Federal Tax Status."
INSURANCE ON THE BONDS
All Municipal Bonds in the portfolios of the Insured Trusts are insured as to
the scheduled payment of interest and principal by the issuer or the Sponsor
from MBIA Insurance Corporation ("MBIA Corporation") or other insurers. See
"Portfolios" and the Notes thereto. The premium for any insurance policy or
policies obtained by an issuer of Municipal Bonds or the Sponsor has been paid
in advance by such issuer or the Sponsor and any such policy or policies are
non-cancellable and will remain in force so long as the Municipal Bonds so
insured are outstanding and the insurer and/or insurers thereof remain in
business. Where Municipal Bond insurance is obtained by the issuer or the
Sponsor directly from MBIA Corporation or another insurer, no premiums for
insurance are paid by an Insured Trust Fund. 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, no other insurer has an obligation to insure any issue adversely
affected by either of the above described events.
The aforementioned insurance guarantees the scheduled payment of principal and
interest on all of the Municipal Bonds in an Insured Trust Fund. It does not
guarantee the market value of the Municipal Bonds or the value of the Units of
the Insured Trust Fund. Insurance obtained by the issuer of a Municipal Bond
or the Sponsor is effective so long as the Bond is outstanding, whether or not
held by an Insured Trust Fund. 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.
Financial Guaranty Insurance Company. Financial Guaranty 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 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 December 31, 1995, the total capital
and surplus of Financial Guaranty was approximately $1,000,520,000. 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 is (212) 312-3000) or
to the New York State Insurance Department at 160 West Broadway, 18th Floor,
New York, New York 10013, Attention: Property Companies Bureau (telephone
number (212) 621-0389).
In addition, Financial Guaranty Insurance Company is currently authorized to
write insurance in all 50 states and the District of Columbia.
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<PAGE>
The information relating to Financial Guaranty contained above has been
furnished by such corporation. The financial information contained herein with
respect to such corporation is unaudited but appears in reports or other
materials 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 date thereof but the
Sponsor is not aware that the information herein is inaccurate or incomplete.
AMBAC Indemnity Corporation. AMBAC Indemnity Corporation ("AMBAC") is a
Wisconsin-domiciled stock insurance company, 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 (unaudited) of approximately $2,145,000,000 and
statutory capital (unaudited) of approximately $782,000,000 as of December 31,
1994. Statutory capital consists of AMBAC policyholders' surplus and statutory
contingency reserve. AMBAC is a wholly owned subsidiary of AMBAC Inc., a 100%
publicly-held company. Moody's Investors Service, Inc. and Standard & Poor's
have both assigned a AAA claims-paying ability rating to AMBAC. Copies of
AMBAC's financial statements prepared in accordance with statutory accounting
standards are available from AMBAC. The address of AMBAC's administrative
offices and its telephone number are One State Street Plaza, 17th Floor, New
York, New York 10004 and (212) 668-0340. AMBAC has entered into quota share
reinsurance agreements under which a percentage of the insurance underwritten
pursuant to certain municipal bond insurance programs of AMBAC has been and
will be assumed by a number of foreign and domestic unaffiliated reinsurers.
MBIA Insurance Corporation. MBIA Insurance Corporation ("MBIA Corporation") 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 Corporation. MBIA Corporation, which commenced municipal bond
insurance operations on January 5, 1987, is a limited liability corporation
rather than a several liability association. MBIA Corporation is domiciled in
the State of New York and licensed to do business in all 50 states, the
District of Columbia and the Commonwealth of the Northern Mariana Islands, the
Commonwealth of Puerto Rico, the Virgin Islands of the United States and the
Territory of Guam.
As of December 31, 1995, MBIA, Inc. had admitted assets of $3.8 billion
(audited), total liabilities of $2.5 billion (audited), and total capital and
surplus of $1.3 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. Standard & Poor's has rated the claims paying ability of MBIA,
Inc. "AAA". Copies of MBIA Corporation's financial statements prepared in
accordance with statutory accounting practices are available from MBIA
Corporation. The address of MBIA Corporation is 113 King Street, Armonk, New
York 10504.
Effective December 31, 1989, MBIA, Inc. acquired Bond Investors Group, Inc. On
January 5, 1990, the Insurer acquired all of the outstanding stock of Bond
Investors Group, Inc., the parent of 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
the Insurer and the Insurer has reinsured BIG's net outstanding exposure.
Moody's Investors Service rates all bond issues insured by MBIA, Inc. "Aaa"
and short-term loans "MIG1," both designated to be of the highest quality.
Standard & Poor's rates all new issues insured by MBIA, Inc. "AAA."
TAX-EXEMPT PORTFOLIOS
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<PAGE>
Financial Security Assurance. Financial Security Assurance ("Financial
Security" or "FSA") is a monoline insurance company incorporated on March 16,
1984 under the laws of the State of New York. The operations of Financial
Security commenced on July 25, 1985, and Financial Security received its New
York State insurance license on September 23, 1985. Financial Security and its
two wholly owned subsidiaries are licensed to engage in financial guaranty
insurance business in 49 states, the District of Columbia and Puerto Rico.
Financial Security and its subsidiaries are engaged exclusively in the
business of writing financial guaranty insurance, principally in respect of
asset-backed and other collateralized securities offered in domestic and
foreign markets. Financial Security and its subsidiaries also write financial
guaranty insurance in respect of municipal and other obligations and reinsure
financial guaranty insurance policies written by other leading insurance
companies. 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 these securities, in consideration for payment
of a premium to the insurer.
Financial Security is approximately 91.6% owned by U S West, Inc. and 8.4%
owned by The Tokio Marine and Fire Insurance Co., Ltd. ("Tokio Marine").
Neither U S West, Inc. nor Tokio Marine is obligated to pay the debts of or
the claims against Financial Security. Financial Security is domiciled in the
State of New York and is subject to regulation by the State of New York
Insurance Department.
As of March 31, 1993, 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 $479,110,000 (unaudited) and $220,078,000
(unaudited), and the total shareholders' equity and the unearned premium
reserve, respectively, of Financial Security and its consolidated subsidiaries
were, in accordance with generally accepted accounting principles,
approximately $628,119,000 (unaudited) and $202,493,000 (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. Financial Security's telephone number is (212) 826-
0100.
Pursuant to an intercompany agreement, liabilities on financial guaranty
insurance written by Financial Security or either of its subsidiaries are
reinsured among such companies at an agreed-upon percentage substantially
proportional to their respective capital, surplus and reserves, subject to
applicable statutory risk limitations. In addition, Financial Security
reinsures a portion of its liabilities under certain of its financial guaranty
insurance policies with unaffiliated reinsurers under various quota share
treaties and on a transaction-by-transaction basis. Such reinsurance is
utilized by Financial Security as a risk management device and to comply with
certain statutory and rating agency requirements; it does not alter or limit
Financial Security's obligations under any financial guaranty insurance
policy.
Financial Security's claims-paying ability is rated "Aaa" by Moody's Investors
Service, Inc., and "AAA" by Standard & Poor's, Nippon Investors Service Inc.,
Duff & Phelps Inc. and Australian Ratings 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. Capital Guaranty Insurance Company
("Capital Guaranty" or "CGIC") is a "Aaa/AAA" rated monoline stock insurance
company incorporated in the State of Maryland, and is a wholly owned
subsidiary of Capital Guaranty Corporation, a Maryland insurance holding
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<PAGE>
company. Capital Guaranty Corporation is a publicly owned company whose shares
are traded on the New York Stock Exchange.
Capital Guaranty Insurance Company is authorized to provide insurance in all
50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam and
the U.S. Virgin Islands. Capital Guaranty focuses on insuring municipal
securities and provides policies which guaranty the timely payment of
principal and interest when due for payment on new issue and secondary market
issue municipal bond transactions. Capital Guaranty's claims-paying ability is
rated "Triple-A" by both Moody's and Standard & Poor's.
As of September 30, 1995, Capital Guaranty had more than $19.0 billion in net
exposure outstanding (excluding defeased issues). The total statutory
policyholders' surplus and contingency reserve of Capital Guaranty was
$204,642,000 and the total admitted assets were $326,802,226 as reported to
the Insurance Department of the State of Maryland as of September 30, 1995.
Financial statements for Capital Guaranty Insurance Company, that have been
prepared in accordance with statutory insurance accounting standards, are
available upon request. The address of Capital Guaranty's headquarters is
Steuart Tower, 22nd Floor, One Market Plaza, San Francisco, CA 94105-1413 and
the telephone number is (415) 995-8000.
Chapman and Cutler, counsel for the Sponsor, has given an opinion to the
effect that the payment of insurance proceeds representing maturing interest
on defaulting municipal obligations paid by Financial Guaranty or another
insurer would be excludable from Federal gross income if, and to the same
extent as, such interest would have been so excludable if paid by the issuer
of the defaulted obligations. See "Federal Tax Status."
FEDERAL TAX STATUS
All Municipal Bonds deposited in the Trust Fund will be accompanied by copies
of opinions of bond counsel to the issuers thereof, given at the time of
original delivery of the Municipal Bonds, to the effect that the interest
thereon is excludable from gross income for Federal income tax purposes. In
connection with the offering of Units of the Trust Fund, neither the Sponsor,
the Trustee, the auditors nor their respective counsel have made any review of
the proceedings relating to the issuance of the Municipal Bonds or the basis
for such opinions.
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
The Trust Fund is not an association taxable as a corporation for Federal
income tax purposes and interest and accrued original issue discount on
Bonds which is excludable from gross income under the Code will retain its
status when distributed to Unitholders; however, such interest may be taken
into account in computing the alternative minimum tax, an additional tax on
branches of foreign corporations and the environmental tax (the "Superfund
Tax"), as noted below.
Each Unitholder is considered to be the owner of a pro rata portion of each
asset of the respective Trust Fund in the proportion that the number of
Units of such Trust Fund held by him bears to the total number of Units
outstanding of such Trust Fund under subpart E, subchapter J of chapter 1
of the Code and will have a taxable event when such Trust Fund disposes of
a Bond, or when the Unitholder redeems or sells his Units. Unitholders must
reduce the tax basis of their Units for their share of accrued interest
received by a Trust Fund, if any, on Bonds delivered after the date the
TAX-EXEMPT PORTFOLIOS
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<PAGE>
Unitholders pay for their Units to the extent that such interest accrued on
such Bonds during the period from the Unitholder's settlement date to the
date such Bonds are delivered to a Trust Fund and, consequently, such
Unitholders may have an increase in taxable gain or reduction in capital
loss upon the disposition of such Units. Gain or loss upon the sale or
redemption of Units is measured by comparing the proceeds of such sale or
redemption with the adjusted basis of the Units. If the Trustee disposes of
Bonds (whether by sale, payment on maturity, redemption or otherwise), gain
or loss is recognized to the Unitholder (subject to various non-recognition
provisions of the Code). The amount of any such gain or loss is measured by
comparing the Unitholder's pro rata share of the total proceeds from such
disposition with the Unitholder's basis for his or her fractional interest
in the asset disposed of. In the case of a Unitholder who purchases Units,
such basis (before adjustment for earned original issue discount and
amortized bond premium, if any) is determined by apportioning the cost of
the Units among each of the Trust Fund's assets ratably according to their
value as of the valuation date nearest the date of acquisition of the
Units. The tax basis reduction requirements of the Code relating to
amortization of bond premium may, under some circumstances, result in the
Unitholder realizing a taxable gain when his Units are sold or redeemed for
an amount equal to or less than his original cost.
Any insurance proceeds paid under individual policies obtained by issuers
of Bonds which represent maturing interest on defaulted obligations held by
the Trustee will be excludable from Federal gross income if, and to the
same extent as, such interest would have been so excludable if paid in the
normal course by the issuer of the defaulted obligations provided that, at
the time such policies are purchased, the amounts paid for such policies
are reasonable, customary and consistent with the reasonable expectation
that the issuer of the obligations, rather than the insurer, will pay debt
service on the obligations.
Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original
issue discount accrues either on the basis of a constant compound interest
rate or ratably over the term of the Municipal Bond, depending on the date the
Municipal Bond was issued. In addition, special rules apply if the purchase
price of a Municipal Bond exceeds the original issue price plus the amount of
original issue discount which would have previously accrued based upon its
issue price (its "adjusted issue price") to prior owners. The application of
these rules will also vary depending on the value of the Municipal Bond on the
date a Unitholder acquires his Units, and the price the Unitholder pays for
his Units. Unitholders should consult with their tax advisers regarding these
rules and their application.
The Revenue Reconciliation Act of 1993 (the "Tax Act") subjects tax-exempt
bonds to the market discount rules of the Code effective for bonds purchased
after April 30, 1993. In general, market discount is the amount (if any) by
which the stated redemption price at maturity exceeds an investor's purchase
price (except to the extent that such difference, if any, is attributable to
original issue discount not yet accrued) subject to a statutory de minimis
rule. Market discount can arise based on the price a Trust Fund pays for
Municipal Bonds or the price a Unitholder pays for his or her Units. Under the
Tax Act, accretion of market discount is taxable as ordinary income; under
prior law the accretion had been treated as capital gain. Market discount that
accretes while a Trust Fund holds a Municipal Bond would be recognized as
ordinary income by the Unitholders when principal payments are received on the
Municipal Bond, upon sale or at redemption (including early redemption), or
upon the sale or redemption of his or her Units, unless a Unitholder elects to
include market discount in taxable income as it accrues. The market discount
rules are complex and Unitholders should consult their tax advisers regarding
these rules and their application.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
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 a Trust Fund. 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 Fund. Under current Code
provisions, the Superfund Tax does not apply to tax years beginning on or
after January 1, 1996. However, the Superfund Tax could be extended
retroactively. 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 Fund is not deductible for Federal income tax purposes. The Internal
Revenue Service has taken the position that such indebtedness need not be
directly traceable to the purchase or carrying of Units (however, these rules
generally do not apply to interest paid on indebtedness incurred to purchase
or improve a personal residence). Also, under Section 265 of the Code, certain
financial institutions that acquire Units would generally not be able to
deduct any of the interest expense attributable to ownership of such Units. On
December 7, 1995 the U.S. Treasury Department released proposed legislation
that, if enacted, would generally extend the financial institution rules to
all corporations, effective for obligations acquired after the date of
announcement. Investors with questions regarding these issues should consult
with their tax advisers.
In the case of certain Municipal Bonds in a Trust Fund, the opinions of bond
counsel indicate that interest on such Municipal Bonds received by a
"substantial user" of the facilities being financed with the proceeds of these
Municipal Bonds or persons related thereto, for periods while such Municipal
Bonds are held by such a user or related person, will not be excludable from
Federal gross income, although interest on such Municipal Bonds received by
others would be excludable from Federal gross income. "Substantial user" and
"related person" are defined under the Code and U.S. Treasury Regulations. Any
person who believes that he or she may be a "substantial user" or a "related
person" as so defined should contact his or her tax adviser.
In the case of corporations, the alternative tax rate applicable to long-term
capital gains is 35% effective for long-term capital gains realized in taxable
years beginning on or after January 1, 1993. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
differences at which ordinary income and capital gains are taxed. Under the
Code, taxpayers must disclose to the Internal Revenue Service the amount of
tax-exempt interest earned during the year.
All statements of law in the Prospectus concerning exclusion from gross income
for Federal, state or other tax purposes are the opinions of counsel and are
to be so construed.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exclusion of interest thereon from Federal gross
income are rendered by bond counsel to the respective issuing authorities.
Neither the Sponsor nor Chapman and Cutler has made any special review for the
Trust Fund of the proceedings relating to the issuance of the Bonds or of the
basis for such opinions.
Section 86 of the Code, in general, provides that fifty percent of Social
Security benefits are includible in gross income to the extent that the sum of
"modified adjusted gross income" plus fifty percent of the Social Security
benefits received exceeds a "base amount". The base amount is $25,000 for
unmarried taxpayers, $32,000 for married taxpayers filing a joint return and
zero for married taxpayers who do not live apart at all times during the
taxable year and who file separate returns. Modified adjusted gross income is
adjusted gross income determined without regard to certain otherwise allowable
deductions and exclusions from gross income and by including tax-exempt
interest. To the extent that Social Security benefits are includible in gross
income, they will be treated as any other item of gross income.
In addition, under the Tax Act, for taxable years beginning after December 31,
1993, up to 85 percent of Social Security benefits are includible in gross
income to the extent that the sum of "modified adjusted gross income" plus
fifty percent of Social Security benefits received exceeds an "adjusted base
amount." The adjusted base amount is $34,000 for unmarried taxpayers, $44,000
for married taxpayers filing a joint return and zero for married taxpayers who
do not live apart at all times during the taxable year and who file separate
returns.
Although tax-exempt interest is included in modified adjusted gross income
solely for the purpose of determining what portion, if any, of Social Security
benefits will be included in gross income, no tax-exempt interest, including
that received from the Trust Fund, 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 or her Social Security
benefits in gross income whether or not he or she receives any tax-exempt
interest. A taxpayer whose modified adjusted gross income (after inclusion of
tax-exempt interest) does not exceed the base amount need not include any
Social Security benefits in gross income.
Ownership of the Units may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, corporations
subject to either the environmental tax or the branch profits tax, financial
institutions, certain insurance companies, certain S corporations, individual
recipients of Social Security or Railroad Retirement benefits and taxpayers
who may be deemed to have incurred (or continued) indebtedness to purchase or
carry tax-exempt obligations. Prospective investors should consult their tax
advisors as to the applicability of any collateral consequences. On December
7, 1995, the U.S. Treasury Department released proposed legislation that, if
adopted, could affect the United States federal income taxation of non-United
States Unitholders and the portion of the Trusts' income allocable to non-
United States Unitholders. Similar language, which would be effective on the
date of enactment, was included in the Health Insurance Reform Bill as passed
by the U.S. Senate on April 23, 1996.
For a discussion of the state tax status of income earned on Units of a state
trust, see the discussion of tax status for the applicable trust. Except as
noted therein, the exemption of interest on state and local obligations for
Federal income tax purposes discussed above does not necessarily result in
exemption under the income or other tax laws of any state or city. The laws of
the several states vary with respect to the taxation of such obligations.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
TAX REPORTING AND REALLOCATION
Because the Trust receives interest and makes monthly distributions based upon
such Trust's expected total collections of interest and any anticipated
expenses, certain tax reporting consequences may arise. The Trust is required
to report Unitholder information to the Internal Revenue Service ("IRS"),
based upon the actual collection of interest by such Trust on the securities
in such Trust, without regard to such Trust's expenses or to such Trust's
payments to Unitholders during the year. If distributions to Unitholders
exceed interest collected, the difference will be reported as a return of
principal which will reduce a Unitholder's cost basis in its Units (and its
pro rata interest in the securities in the Trust). A Unitholder must include
in taxable income the amount of income reported by a Trust to the IRS
regardless of the amount distributed to such Unitholder. If a Unitholder's
share of taxable income exceeds income distributions made by a Trust to such
Unitholder, such excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible by an
individual Unitholder as an itemized deduction except to the extent that the
total amount of certain itemized deductions, such as investments expenses
(which would include the Unitholder's share of Trust expenses), tax return
preparation fees and employee business expenses, exceeds 2% of such
Unitholder's adjusted gross income. Alternatively, in certain cases, such
excess may represent an increase in the Unitholder's tax basis in the Units
owned. Investors with questions regarding these issues should consult with
their tax advisers.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
UNDERWRITING
The Underwriters named below have severally purchased Units of the Trusts in
the following respective amounts:
<TABLE>
<CAPTION>
INSURED
MICHIGAN
SERIES
FIRM NAME 14
--------- --------
<S> <C>
*EVEREN Unit Investment Trusts......................................... 154,150
*EVEREN Securities, Inc................................................ 50,000
Roney & Company........................................................ 31,350
First of Michigan Corporation.......................................... 10,000
The Ohio Company....................................................... 10,000
Primevest Financial Services........................................... 10,000
-------
TOTAL UNITS:........................................................... 265,500
=======
</TABLE>
Underwriter Addresses:
*EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc., 77 West
Wacker Drive, 29th Floor, Chicago, IL 60601-1994
*EVEREN Securities, Inc., 77 West Wacker Drive, 28th Floor, Chicago, IL 60601-
1994
First of Michigan Corporation, 100 Renaissance Center, 26th Floor, Detroit, MI
48243
The Ohio Company, 155 E. Broad St., Columbus, Ohio 43215
Primevest Financial Services, 400 1st Street South, Suite 300, St. Cloud, MN
56301
Roney & Company, One Griswold Street, 6th Floor, UITs, Detroit, MI 48226
- ------------------
*EVEREN Capital Corporation owns or has a controlling interest in EVEREN Unit
Investment Trusts (the Trusts' Sponsor and Evaluator) and EVEREN Securities,
Inc. EVEREN Unit Investment Trusts is a service of EVEREN Securities, Inc. For
additional information about the Underwriters, see "Underwriting."
The Underwriters acquired the Units of the Trust Funds at a price per Unit
equal to the Public Offering Prices set forth under "Essential Information"
less the Underwriters' takedown. The amount of the Underwriters' takedown for
Trusts with a weighted average maturity less than 7.5 years for each Unit is
$.22 for those firms committing for 10,000 to 24,999 Units, $.22 plus 50% of
any net portfolio profit for those firms committing for 25,000 to 99,999 Units
and $.23 plus 50% of any net portfolio profit for those firms committing for
100,000 or more Units. The amount of the Underwriters' takedown for Trusts
with a weighted average maturity between 7.5 and 9.99 years for each Unit is
$.28 for those firms committing for 10,000 to 24,999 Units, $.28 plus 50% of
any net portfolio profits for those firms committing for 25,000 to 49,999
Units, $.29 plus 50% of any net portfolio profit for those firms committing
for 50,000 to 99,999 Units and $.30 plus 50% of any net portfolio profit for
those firms committing for 100,000 or more Units. The amount of the
Underwriters' takedown for Trusts with a weighted average maturity 10 to 14.99
years for each Unit is $.30 for those firms committing for 10,000 to 24,999
Units, $.30 plus 50% of any net portfolio profits for those firms committing
for 25,000 to 49,999 Units, $.31 plus 50% of any net portfolio profit for
those firms committing for 50,000 to 99,999 Units and $.32 plus 50% of any net
portfolio profit for those firms committing for 100,000 or more Units. The
amount of the Underwriters' takedown for Trusts with a weighted average
maturity greater than 14.99 years for each Unit is $.36 for 10,000 to 24,999
Units, $.36 plus 50% of any net portfolio profit for those firms committing
for 25,000 to 49,999 Units, $.37 plus 50% of any net portfolio profit for
those firms committing for 50,000 to 99,999 Units and $.38 plus 50% of any net
portfolio profit for those firms committing for 100,000 or more Units. In
connection with any quantity discounts (see "Public Offering of Units--Public
Offering Price"), the Sponsor and the applicable Underwriter will each receive
reduced concessions as a result of the reduced sales charges to the investor.
In addition to such discounts, the Sponsor may, from time to time, pay or
allow an additional discount, in the form of cash or other compensation, to
dealers who underwrite additional Units of a Trust or who sell, during a
specified time period, a minimum dollar amount of Units
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<PAGE>
of a Trust and other unit investment trusts underwritten by the Sponsor. The
Underwriting Agreement provides that the Sponsor will select and purchase the
Municipal Bonds for deposit in the Trust Funds on its own behalf and on behalf
of the other Underwriters.
The Underwriting Agreement provides that a public offering of the Units of the
Trust Funds will be made by the Underwriters at the Public Offering Price
described in the Prospectus. Units may also be sold to or through dealers, who
are members of the National Association of Securities Dealers, Inc., and
others at prices representing discounts from the Public Offering Price.
However, resales of Units of the Trust Funds to the public will be made at the
Public Offering Price thereof.
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 Underwriters,
brokers, dealers, banks and/or others may be eligible to win other nominal
awards for certain sales efforts, or under which the Sponsor will reallow to
any such Underwriters, brokers, dealers, banks and/or others 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 underwriters, brokers,
dealers, banks or others 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.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The tables below set forth the estimated monthly distributions of interest and
principal to Unitholders on a per Unit basis. The tables assume no changes in
expenses, no changes in the current interest rates, no exchanges, redemptions,
sales or prepayments of the underlying Securities 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.
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<PAGE>
INSURED MICHIGAN SERIES 14
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Jun 15 1996 $0.02724 $0.02724
Jul 15, 1996 to Oct 15, 2018 $0.04540 $0.04540
Nov 15, 2018 $0.04540 $1.88324 $1.92864
Dec 15, 2018 to Mar 15, 2019 $0.03680 $0.03680
Apr 15, 2019 $0.03680 $0.94162 $0.97842
May 15, 2019 $0.03210 $0.94162 $0.97372
Jun 15, 2019 to Apr 15, 2025 $0.02770 $0.02770
May 15, 2025 $0.02770 $2.82486 $2.85256
Jun 15, 2025 $0.01480 $0.01480
Jul 15, 2025 $0.01480 $1.88324 $1.89804
Aug 15, 2025 to May 15, 2026 $0.00640 $0.00640
Jun 15, 2026 $0.00275 $1.52542 $1.52817
</TABLE>
TAX-EXEMPT PORTFOLIOS
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GENERAL INFORMATION
RATING OF UNITS
Standard & Poor's has rated the Units of any U.S. Treasury Portfolio Series or
GNMA Portfolio Series "AAA." Because the Securities in an Insured Trust Fund
in a Tax-Exempt Portfolio Series or an Insured Corporate Series are insured as
to the scheduled payment of principal and interest and on the basis of the
financial condition and the method of operation of the insurance companies
referred to in "Insurance on the Bonds" for each such Trust, Standard & Poor's
has also rated the Units of any Insured Trust Fund "AAA." This is the highest
rating assigned by Standard & Poor's. Standard & Poor's has been compensated
by the Sponsor for its services in rating Units of the Trust Funds.
A Standard & Poor's rating (as described by Standard & Poor's) on the units of
an investment trust (hereinafter referred to collectively as "units" or
"trust") is a current assessment of creditworthiness with respect to the
investments held by such trust. This assessment takes into consideration the
financial capacity of the issuers and of any guarantors, insurers, lessees, or
mortgagors with respect to such investments. The assessment, however, does not
take into account the extent to which trust expenses or portfolio asset sales
for less than the trust's purchase price will reduce payment to the Unitholder
of the interest and principal required to be paid on the portfolio assets. In
addition, the rating is not a recommendation to purchase, sell, or hold units,
inasmuch as the rating does not comment as to market price of the units or
suitability for a particular investor.
Trusts rated "AAA" are composed exclusively of assets that are rated "AAA" by
Standard & Poor's or have, in the opinion of Standard & Poor's, credit
characteristics comparable to assets rated "AAA," or certain short-term
investments. Standard & Poor's defines its "AAA" rating for such assets as the
highest rating assigned by Standard & Poor's to a debt obligation. Capacity to
pay interest and repay principal is very strong.
Securities in an Insured Trust Fund for which insurance has been obtained by
the Issuer or the Sponsor (all of which were rated "AAA" by Standard & Poor's
and/or "Aaa" by Moody's Investors Service, Inc.) may or may not have a higher
yield than uninsured Securities rated "AAA" by Standard & Poor's or "Aaa" by
Moody's Investors Service, Inc. In selecting Securities for the portfolios of
an Insured Trust Fund, the Sponsor has applied the criteria hereinbefore
described.
TRUST INFORMATION
Because certain of the Securities in certain of the Trusts may from time to
time under certain circumstances be sold or redeemed or will mature in
accordance with their terms and because the proceeds from such events will be
distributed to Unitholders and will not be reinvested, no assurance can be
given that a Trust will retain for any length of time its present size and
composition. Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any Security. In the event of a failure
to deliver any Security that has been purchased for a Trust under a contract,
including those securities purchased on a "when, as and if issued" basis
("Failed Securities"), the Sponsor is authorized under the Trust Agreement to
direct the Trustee to acquire other securities ("Replacement Securities") to
make up the original corpus of such Trust.
Securities in certain of the Trust Funds may have been purchased on a "when,
as and if issued" or delayed delivery basis with delivery expected to take
place after the First Settlement Date. See "Notes to Portfolios" for each
Trust. Accordingly, the delivery of such Securities may be delayed or may not
occur. Interest on these Securities begins accruing to the benefit of
Unitholders on their respective dates of
GI-1
GENERAL INFORMATION
<PAGE>
delivery. To the extent any Municipal Bonds in a Tax-Exempt Portfolio are
actually delivered to such Trust after their respective expected dates of
delivery, Unitholders who purchase Units in such Trust prior to the date such
"when, as and if issued" or "delayed delivery" Municipal Bonds are actually
delivered to the Trustee would, to the extent such income is not offset by a
reduction in the Trustee's fee (or, to the extent necessary, other expenses),
be required to reduce their tax basis in their Units of such Trust since the
interest accruing on such Municipal Bonds during the interval between their
purchase of Units and the actual delivery of such Municipal Bonds would, for
tax purposes, be considered a non-taxable return of principal rather than as
tax-exempt interest. The result of such adjustment, if necessary, would be,
during the first year only, that the Estimated Long-Term Returns may be, and
the Estimated Current Returns would be, slightly lower than those shown
herein, assuming such Trust portfolios and estimated annual expenses do not
vary. See footnote (4) to "Essential Information." Unitholders of all Trusts
will be "at risk" with respect to any "when, as and if issued" or "delayed
delivery" Securities included in their respective Trust (i.e., may derive
either gain or loss from fluctuations in the evaluation of such Securities)
from the date they commit for Units.
The Replacement Securities must be purchased within 20 days after delivery of
the notice that a contract to deliver a Security will not be honored and the
purchase price may not exceed the amount of funds reserved for the purchase of
the Failed Securities. The Replacement Securities (i) must be payable in
United States currency, (ii) must be purchased at a price that results in a
yield to maturity and a current return at least equal to that of the Failed
Securities as of the Initial Date of Deposit, (iii) shall not be "when, as and
if issued" or restricted securities, (iv) must satisfy any rating criteria for
Securities originally included in such Trust, (v) not cause the Units of such
Trust to cease to be rated AAA by Standard & Poor's if the Units were so rated
on the Initial Date of Deposit and (vi) in the case of Insured Trust Funds
must be insured prior to acquisition by a Trust. In connection with an Insured
Corporate Series, an Investment Grade Series or High Yield Series, Replacement
Securities also must be bonds, debentures, notes or other straight debt
obligations (whether secured or unsecured and whether senior or subordinated)
without equity or other conversion features, with fixed maturity dates
substantially the same as those of the Failed Securities having no warrants or
subscription privileges attached and (ii) be issued after July 18, 1984 if
interest thereon is United States source income. In connection with a Tax-
Exempt Portfolio only, Replacement Securities must also (i) be tax-exempt
bonds issued by the appropriate state or counties, municipalities, authorities
or political subdivisions thereof and (ii) have a fixed maturity date of at
least 3 years if the bonds are to be deposited in a trust other than a long-
term trust or at least 10 years if the bonds are to be deposited in a long-
term trust. Whenever a Replacement Security is acquired for a Trust, the
Trustee shall, within five days thereafter, notify all Unitholders of the
Trust of the acquisition of the Replacement Security and shall, on the next
monthly distribution date which is more than 30 days thereafter, make a pro
rata distribution of the amount, if any, by which the cost to the Trust of the
Failed Security exceeded the cost of the Replacement Security. Once all of the
Securities in a Trust are acquired, the Trustee will have no power to vary the
investments of the Trust, i.e., the Trustee will have no managerial power to
take advantage of market variations to improve a Unitholder's investment.
If the right of limited substitution described in the preceding paragraphs is
not utilized to acquire Replacement Securities in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such Failed
Securities to all Unitholders of the Trust Fund and the Trustee will
distribute the principal and accrued interest attributable to such Failed
Securities not more than 30 days after the date on which the Trustee would
have been required to purchase a Replacement Security. In addition,
Unitholders should be aware that, at the time of receipt of such principal,
they may not be able to reinvest such proceeds in other securities at a yield
equal to or in excess of the yield which such proceeds would have earned for
Unitholders of such Trust Fund.
GI-2
GENERAL INFORMATION
<PAGE>
Whether or not a Replacement Security is acquired, an amount equal to the
accrued interest (at the coupon rate of the Failed Securities) will be paid to
Unitholders of the Trust Fund to the date the Sponsor removes the Failed
Securities from the Trust Fund if the Sponsor determines not to purchase a
Replacement Security or to the date of substitution if a Replacement Security
is purchased. All such interest paid to Unitholders which accrued after the
date of settlement for a purchase of Units will be paid by the Sponsor. In the
event a Replacement Security could not be acquired by a Trust, the net annual
interest income per Unit for such Trust would be reduced and the Estimated
Current Return and Estimated Long-Term Return might be lowered.
Subsequent to the Initial Date of Deposit, a Security may cease to be rated or
its rating may be reduced below any minimum required as of the Initial Date of
Deposit. Neither event requires the elimination of such investment from a
Trust, but may be considered in the Sponsor's determination to direct the
Trustee to dispose of such investment. See "General Information--Investment
Supervision."
The Sponsor may not alter the portfolio of a Trust except upon the happening
of certain extraordinary circumstances. See "General Information--Investment
Supervision." Certain of the Securities may be subject to optional call or
mandatory redemption pursuant to sinking fund provisions, in each case prior
to their stated maturity. A bond subject to optional call is one which is
subject to redemption or refunding prior to maturity at the option of the
issuer, often at a premium over par. A refunding is a method by which a bond
issue is redeemed, at or before maturity, by the proceeds of a new bond issue.
A bond subject to sinking fund redemption is one which is subject to partial
call from time to time at par with proceeds from a fund accumulated for the
scheduled retirement of a portion of an issue to maturity. Special or
extraordinary redemption provisions may provide for redemption at par of all
or a portion of an issue upon the occurrence of certain circumstances, which
may be prior to the optional call dates shown under "Portfolio" for each
Trust. Redemption pursuant to optional call provisions is more likely to
occur, and redemption pursuant to special or extraordinary redemption
provisions may occur, when the Securities have an offering side evaluation
which represents a premium over par, that is, when they are able to be
refinanced at a lower cost. The proceeds from any such call or redemption
pursuant to sinking fund provisions, as well as proceeds from the sale of
Securities and from Securities which mature in accordance with their terms
from a Trust, unless utilized to pay for Units tendered for redemption, will
be distributed to Unitholders of such Trust and will not be used to purchase
additional Securities for such Trust. Accordingly, any such call, redemption,
sale or maturity will reduce the size and diversity of a Trust and the net
annual interest income of such Trust and may reduce the Estimated Current
Return and the Estimated Long-Term Return. See "General Information--Interest,
Estimated Long-Term Return and Estimated Current Return." The call,
redemption, sale or maturity of Securities also may have tax consequences to a
Unitholder. See "Federal Tax Status" for each Trust. Information with respect
to the call provisions and maturity dates of the Securities is contained in
"Portfolio" for each Trust.
Each Unit of a Trust represents an undivided fractional interest in the
Securities deposited therein, in the ratio shown under "Essential
Information." Units may be purchased and certificates, if requested, will be
issued in denominations of one Unit or any multiple or fraction thereof,
subject to each Trust's minimum investment requirement of one Unit. Fractions
of Units will be computed to three decimal points. To the extent that Units of
a Trust are redeemed, the principal amount of Securities in such Trust will be
reduced and the undivided fractional interest represented by each outstanding
Unit of such Trust will increase. See "General Information--Redemption."
Certain of the Securities in certain of the Trusts may have been acquired at a
market discount from par value at maturity. The coupon interest rates on the
discount securities at the time they were purchased
GI-3
GENERAL INFORMATION
<PAGE>
and deposited in the Trusts 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 securities increase, the market discount of
previously issued securities will become greater, and if such interest rates
for newly issued comparable securities decline, the market discount of
previously issued securities will be reduced, other things being equal.
Investors should also note that the value of securities purchased at a market
discount will increase in value faster than securities purchased at a market
premium if interest rates decrease. Conversely, if interest rates increase,
the value of securities purchased at a market discount will decrease faster
than securities purchased at a market premium. In addition, if interest rates
rise, the prepayment risk of higher yielding, premium securities and the
prepayment benefit for lower yielding, discount securities will be reduced. A
discount security held to maturity will have a larger portion of its total
return in the form of taxable income and capital gain and loss in the form of
tax-exempt interest income than a comparable security 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.
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Securities.
Certain of the Securities in certain of the Trust Funds may be "zero coupon"
bonds, i.e., an original issue discount bond that does not provide for the
payment of current interest. Zero coupon bonds are purchased at a deep
discount because the buyer 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 currently. For the Federal tax consequences of original issue
discount securities such as the zero coupon bonds, see "Federal Tax Status"
for each Trust.
To the best of the Sponsor's knowledge, there is no litigation pending as of
the Initial Date of Deposit in respect of any Security which might reasonably
be expected to have a material adverse effect on the Trust Funds. At any time
after the Initial Date of Deposit, litigation may be instituted on a variety
of grounds with respect to the Securities. The Sponsor is unable to predict
whether any such litigation may be instituted, or if instituted, whether such
litigation might have a material adverse effect on the Trust Funds. The
Sponsor and the Trustee shall not be liable in any way for any default,
failure or defect in any Security.
RETIREMENT PLANS
Units of the Trusts (other than a Tax-Exempt Portfolio) may be well suited for
purchase by Individual Retirement Accounts, Keogh Plans, pension funds and
other qualified retirement plans, certain of which are briefly described
below.
Generally, capital gains and income received under each of the foregoing plans
are deferred from federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax-deferred rollover treatment. Investors
considering
GI-4
GENERAL INFORMATION
<PAGE>
participation in any such plan should review specific tax laws related thereto
and should consult their attorneys or tax advisers with respect to the
establishment and maintenance of any such plan. Such plans are offered by
brokerage firms and other financial institutions. The Trusts will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-deferred plans such as IRA accounts. Fees and charges with
respect to such plans may vary.
Individual Retirement Account--IRA. Any individual under age 70 1/2 may
contribute the lesser of $2,000 or 100% of compensation to an IRA annually.
Such contributions are fully deductible if the individual (and spouse if
filing jointly) are not covered by a retirement plan at work. The deductible
amount an individual may contribute to an IRA will be reduced $10 for each $50
of adjusted gross income over $25,000 ($40,000 if married, filing jointly or
$0 if married, filing separately), if either an individual or their spouse (if
married, filing jointly) is an active participant in an employer maintained
retirement plan. Thus, if an individual has adjusted gross income over $35,000
($50,000 if married, filing jointly or $0 if married, filing separately) and
if an individual or their spouse is an active participant in an employer
maintained retirement plan, no IRA deduction is permitted. Under the Internal
Revenue Code of 1986, as amended (the "Code"), an individual may make
nondeductible contributions to the extent deductible contributions are not
allowed. All distributions from an IRA (other than the return of certain
excess contributions) are treated as ordinary income for federal income
taxation purposes provided that under the Code an individual need not pay tax
on the return of nondeductible contributions. The amount includable in income
for the taxable year is the portion of the amount withdrawn for the taxable
year as the individual's aggregate deductible IRA contributions bear to the
aggregate balance of all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be, distributed to
the participant not later than April 1 of the calendar year following the year
during which the participant attains age 70 1/2. Distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over to another
IRA, or where the distributions are taken as a series of substantially equal
periodic payments over the participant's life or life expectancy (or the joint
lives or life expectancies of the participant and the designated beneficiary)
are generally subject to a surtax in an amount equal to 10% of the
distribution. The amount of such periodic payments may not be modified before
the later of five years or attainment of age 59 1/2. Excess contributions are
subject to an annual 6% excise tax.
IRA applications, disclosure statements and trust agreements are available
from the Sponsor upon request.
Qualified Retirement Plans. Units of a Trust may be purchased by qualified
pension or profit sharing plans maintained by corporations, partnerships or
sole proprietors. The maximum annual contribution for a participant in a money
purchase pension plan or to paired profit sharing and pension plans is the
lesser of 25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the Sponsor upon
request.
Excess Distributions Tax. In addition to the other taxes due by reason of a
plan distribution, a tax of 15% may apply to certain aggregate distributions
from IRAs, Keogh plans, and corporate retirement plans to the extent such
aggregate taxable distributions exceed specified amounts (generally $150,000,
as adjusted) during a tax year. This 15% tax will not apply to distributions
on account of death, qualified domestic relations orders or amounts eligible
for tax-deferred rollover treatment. In general, for lump sum distributions
the excess distributions over $750,000 (as adjusted) will be subject to the
15% tax.
GI-5
GENERAL INFORMATION
<PAGE>
The Trustee, The Bank of New York, has agreed to act as custodian for certain
retirement plan accounts. An annual fee of $12.00 per account, if not paid
separately, will be assessed by the Trustee and paid through the liquidation
of shares of the reinvestment account. An individual wishing the Trustee to
act as custodian must complete an EVEREN UIT/IRA application and forward it
along with a check made payable to The Bank of New York. Certificates for
Individual Retirement Accounts cannot be issued.
DISTRIBUTION REINVESTMENT
Each Unitholder of a Trust may elect to have distributions of principal
(including capital gains, if any) or interest or both automatically invested
without charge in shares of any mutual fund which is registered in such
Unitholder's state of residence and is underwritten or advised by Zurich
Kemper Investments, Inc. (the "Zurich Kemper Funds"), other than those Zurich
Kemper Funds sold with a contingent deferred sales charge.
If individuals indicate they wish to participate in the Reinvestment Program
but do not designate a reinvestment fund, the Program Agent referred to below
will contact such individuals to determine which reinvestment fund or funds
they wish to elect. Since the portfolio securities and investment objectives
of such Zurich Kemper Funds generally will differ significantly from that of
the Trusts, Unitholders should carefully consider the consequences before
selecting such Zurich Kemper Funds for reinvestment. Detailed information with
respect to the investment objectives and the management of the Funds is
contained in their respective prospectuses, which can be obtained from the
Sponsor upon request. An investor should read the prospectus of the
reinvestment fund selected prior to making the election to reinvest.
Unitholders who desire to have such distributions automatically reinvested
should inform their broker at the time of purchase or should file with the
Program Agent a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate
in distribution reinvestment by filing with the Program Agent an election to
have such distributions reinvested without charge. Such election must be
received by the Program Agent at least ten days prior to the Record Date
applicable to any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent notice is received
by the Program Agent. See "General Information--Unitholders--Distributions to
Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participation in distribution reinvestment should be directed to the Program
Agent at its unit investment trust division office.
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN
As of the opening of business on the Initial Date of Deposit, the Estimated
Long-Term Return and the Estimated Current Return, if applicable, for each
Trust were as set forth in the "Essential Information" for each Trust.
Estimated Current Return is calculated by dividing the estimated net annual
interest income per Unit by the Public Offering Price. The estimated net
annual interest income per Unit will vary with changes in fees and expenses of
the Trustee, the Sponsor and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of the Securities while the Public
Offering Price will vary with changes in the offering price of the underlying
Securities and accrued interest; therefore, there is no assurance that the
present Estimated Current Return will be realized in the future. Estimated
Long-Term Return is calculated using a formula which (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 or average life of
all of the Securities
GI-6
GENERAL INFORMATION
<PAGE>
in a Trust and (2) takes into account the expenses and sales charge associated
with each Trust Unit. Since the market values and estimated retirements of the
Securities and the expenses of a Trust will change, there is no assurance that
the present Estimated Long-Term Return will be realized in the future.
Estimated Current Return and Estimated Long-Term Return are expected to differ
because the calculation of Estimated Long-Term Return reflects the estimated
date and amount of principal returned while Estimated Current Return
calculations include only net annual interest income and Public Offering
Price.
In order to acquire certain of the Securities contracted for by a Trust, it
may be necessary for the Sponsor or Trustee to pay on the dates for delivery
of such Securities amounts covering accrued interest on such Securities which
exceed the amount which will be made available in the letter of credit
furnished by the Sponsor on the Initial Date of Deposit. The Trustee has
agreed to pay any amounts necessary to cover any such excess and will be
reimbursed therefor, without interest, when funds become available from
interest payments on the Securities deposited in that Trust.
Payments received in respect of mortgages underlying Ginnie Maes in each
series of a GNMA Portfolio will consist of a portion representing interest and
a portion representing principal. Although the aggregate monthly payment made
by the obligor on each mortgage remains constant (aside from optional
prepayments of principal), in the early years most of each such payment will
represent interest, while in later years, the proportion representing interest
will decline and the proportion representing principal will increase. However,
by reason of optional prepayments, principal payments in the earlier years on
mortgages underlying Ginnie Maes may be substantially in excess of those
required by the amortization schedules of such mortgages. Therefore, principal
payments in later years may be substantially less since the aggregate unpaid
principal balances of such underlying mortgages may have been greatly reduced.
To the extent that the underlying mortgages bearing higher interest rates in a
GNMA Portfolio are prepaid faster than the other underlying mortgages, the net
annual interest rate per Unit and the Estimated Current Return on the Units of
a GNMA Portfolio can be expected to decline. Monthly payments to the
Unitholders of a GNMA Portfolio will reflect all of these factors.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, and certain of the Underwriters may, subject to change at any
time, maintain a market for Units of the Trust Funds offered hereby and to
continuously offer to purchase said Units at prices, determined by the
Evaluator, based on the aggregate bid prices of the underlying Securities in
such Trusts, together with accrued interest to the expected dates of
settlement. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Securities in the Trusts.
The aggregate bid prices of the underlying Securities in each Trust are
expected to be less than the related aggregate offering prices (which is the
evaluation method used during the initial public offering period).
Accordingly, Unitholders who wish to dispose of their Units should inquire of
their bank or broker as to current market prices in order to determine whether
there is in existence any price in excess of the Redemption Price and, if so,
the amount thereof.
The offering price of any Units resold by the Sponsor or Underwriters will be
in accord with that described in the currently effective Prospectus describing
such Units. Any profit or loss resulting from the resale of such Units will
belong to the Sponsor and/or the Underwriters. The Sponsor and/or the
Underwriters may suspend or discontinue purchases of Units of any Trust if the
supply of Units exceeds demand, or for other business reasons.
GI-7
GENERAL INFORMATION
<PAGE>
REDEMPTION
A Unitholder who does not dispose of Units in the secondary market described
above may cause Units to be redeemed by the Trustee by making a written
request to the Trustee, The Bank of New York, 101 Barclay Street, New York,
New York 10286 and, in the case of Units evidenced by a certificate, by
tendering such certificate to the Trustee, properly endorsed or accompanied by
a written instrument or instruments of transfer in a form satisfactory to the
Trustee. Unitholders must sign the request, and such certificate or transfer
instrument, exactly as their names appear on the records of the Trustee and on
any certificate representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the proceeds are payable to the
Unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature guarantee
is always required, from corporations, executors, administrators, trustees,
guardians or associations. The signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
guarantee program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
certificate is required for redemption when one has been issued, Units
represented by a certificate cannot be redeemed until the certificate
representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the third business day following
the day on which a tender for redemption is received (the "Redemption Date")
by payment of cash equivalent to the Redemption Price for such Trust,
determined as set forth below under "Computation of Redemption Price," as of
the evaluation time stated under "Essential Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be cancelled and any undivided fractional interest in the Trust
extinguished. The price received upon redemption might be more or less than
the amount paid by the Unitholder depending on the value of the Securities in
the Trust at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a certain percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's
tax identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and may be
recovered by the Unitholder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker. However, any time a Unitholder elects to tender Units
for redemption, such Unitholder should make sure that the Trustee has been
provided a certified tax identification number in order to avoid this possible
"back-up withholding." In the event the Trustee has not been previously
provided such number, one must be provided at the time redemption is
requested.
Any amounts paid on redemption representing interest shall be withdrawn from
the Interest Account for such Trust to the extent that funds are available for
such purpose. All other amounts paid on redemption shall be withdrawn from the
Principal Account for such Trust. The Trustee is empowered to sell Securities
for a Trust in order to make funds available for the redemption of Units of
such Trust. Such sale may be required when Securities would not otherwise be
sold and might result in lower prices than might otherwise be realized. To the
extent Securities are sold, the size and diversity of a Trust will be reduced.
In the case of a U.S. Treasury Portfolio or a GNMA Portfolio, Securities will
be sold by the Trustee so as to maintain, as closely as practicable, the
original percentage relationship between the principal amounts
GI-8
GENERAL INFORMATION
<PAGE>
of the Securities in such Trusts. The Securities to be sold for purposes of
redeeming Units will be selected from a list supplied by the Sponsor. The
Securities will be chosen for this list by the Sponsor on the basis of such
market and credit factors as it may determine are in the best interests of
such Trusts. Provision is made under the related Trust Agreements for the
Sponsor to specify minimum face amounts in which blocks of Securities are to
be sold in order to obtain the best price available. While such minimum
amounts may vary from time to time in accordance with market conditions, it is
anticipated that the minimum face amounts which would be specified would range
from $25,000 to $100,000. Sales may be required at a time when the Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized. Moreover, due to the minimum principal amount in which
U.S. Treasury Obligations and Ginnie Maes may be required to be sold, the
proceeds of such sales may exceed the amount necessary for payment of Units
redeemed. To the extent not used to meet other redemption requests in such
Trusts, such excess proceeds will be distributed pro rata to all remaining
Unitholders of record of such Trusts, unless reinvested in substitute
Securities. See "General Information--Investment Supervision."
The Trustee is irrevocably authorized in its discretion, if an Underwriter
does not elect to purchase any Unit tendered for redemption, in lieu of
redeeming such Units, to sell such Units in the over-the-counter market for
the account of tendering Unitholders at prices which will return to the
Unitholders amounts in cash, net after brokerage commissions, transfer taxes
and other charges, equal to or in excess of the Redemption Price for such
Units. In the event of any such sale, the Trustee shall pay the net proceeds
thereof to the Unitholders on the day they would otherwise be entitled to
receive payment of the Redemption Price.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or during which (as determined by the
Securities and Exchange Commission) trading on the New York Stock Exchange is
restricted; (2) for any period during which an emergency exists as a result of
which disposal by the Trustee of Securities is not reasonably practicable or
it is not reasonably practicable to fairly determine the value of the
underlying Securities in accordance with the Trust Agreements; or (3) for such
other period as the Securities and Exchange Commission may by order permit.
The Trustee is not liable to any person in any way for any loss or damage
which may result from any such suspension or postponement.
Computation of Redemption Price. The Redemption Price for Units of each Trust
is computed by the Evaluator as of the evaluation time stated under "Essential
Information" next occurring after the tendering of a Unit for redemption and
on any other business day desired by it, by:
A. adding: (1) the cash on hand in the Trust other than cash deposited in the
Trust to purchase Securities not applied to the purchase of such Securities;
(2) the aggregate value of each issue of the Securities (including "when
issued" contracts, if any) held in the Trust as determined by the Evaluator on
the basis of bid prices therefor; and (3) interest accrued and unpaid on the
Securities in the Trust as of the date of computation;
B. deducting therefrom (1) amounts representing any applicable taxes or
governmental charges payable out of the Trust and for which no deductions have
been previously made for the purpose of additions to the Reserve Account
described under "General Information--Expenses of the Trusts"; (2) an amount
representing estimated accrued expenses of the Trust, including but not
limited to fees and expenses of the Trustee (including legal and auditing fees
and any insurance costs), the Evaluator, the Sponsor and
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bond counsel, if any; (3) cash held for distribution to Unitholders of record
as of the business day prior to the evaluation being made; and (4) other
liabilities incurred by the Trust; and
C. finally dividing the results of such computation by the number of Units of
the Trust outstanding as of the date thereof.
UNITHOLDERS
Ownership of Units. Ownership of Units of any Trust will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Certificates, if issued, will be so noted on the confirmation
statement sent to the Underwriter and broker. Non-receipt of such
certificate(s) must be reported to the Trustee within one year; otherwise, a
2% surety bond fee will be required for replacement.
Units are transferable by making a written request to the Trustee and, in the
case of Units evidenced by a certificate, by presenting and surrendering such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign
such written request, and such certificate or transfer instrument, exactly as
their names appear on the records of the Trustee and on any certificate
representing the Units to be transferred. Such signatures must be guaranteed
by a participant in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guarantee program in addition to, or in substitution
for, STAMP, as may be accepted by the Trustee.
Units may be purchased and certificates, if requested will be issued in
denominations of one Unit subject to each Trust's minimum investment
requirement of 100 Units or any whole Unit multiple thereof subject to any
minimum requirement established by the Sponsor from time to time. Any
certificate issued will be numbered serially for identification, issued in
fully registered form and will be transferable only on the books of the
Trustee. The Trustee may require a Unitholder to pay a reasonable fee, to be
determined in the sole discretion of the Trustee, for each certificate re-
issued or transferred and to pay any governmental charge that may be imposed
in connection with each such transfer or interchange. The Trustee at the
present time does not intend to charge for the normal transfer or interchange
of certificates. Destroyed, stolen, mutilated or lost certificates will be
replaced upon delivery to the Trustee of satisfactory indemnity (generally
amounting to 3% of the market value of the Units), affidavit of loss, evidence
of ownership and payment of expenses incurred.
Distributions to Unitholders. Interest received by each Trust, including any
portion of the proceeds from a disposition of Securities which represents
accrued interest, is credited by the Trustee to the Interest Account for such
Trust. All other receipts are credited by the Trustee to a separate Principal
Account for the Trust. The Trustee normally has no cash for distribution to
Unitholders until it receives interest payments on the Securities in the
Trust. Since interest usually is paid semi-annually (monthly in the case of a
GNMA Portfolio), during the initial months of the Trusts, the Interest Account
of each Trust, consisting of accrued but uncollected interest and collected
interest (cash), will be predominantly the uncollected accrued interest that
is not available for distribution. On the dates set forth under "Essential
Information" for each Trust, the Trustee will commence distributions, in part
from funds advanced by the Trustee.
Thereafter, assuming the Trust retains its original size and composition,
after deduction of the fees and expenses of the Trustee, the Sponsor and
Evaluator and reimbursements (without interest) to the Trustee
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for any amounts advanced to a Trust, the Trustee will normally distribute on
each Interest Distribution Date (the fifteenth of the month) or shortly
thereafter to Unitholders of record of such Trust on the preceding Record Date
(which is the first day of each month). Unitholders of the Trusts will receive
an amount substantially equal to one-twelfth of such holders' pro rata share
of the estimated net annual interest income to the Interest Account of such
Trust. However, interest earned at any point in time will be greater than the
amount actually received by the Trustee and distributed to the Unitholders.
Therefore, there will always remain an item of accrued interest that is added
to the daily value of the Units. If Unitholders of a Trust sell or redeem all
or a portion of their Units, they will be paid their proportionate share of
the accrued interest of such Trust to, but not including, the third business
day after the date of a sale or to the date of tender in the case of a
redemption.
In order to equalize distributions and keep the undistributed interest income
of the Trusts at a low level, all Unitholders of record in such Trust on the
first Record Date will receive an interest distribution on the first Interest
Distribution Date. Because the period of time between the first Interest
Distribution Date and the regular distribution dates may not be a full period,
the first regular distributions may be partial distributions.
Unitholders of a U.S. Treasury Portfolio which contains Stripped Treasury
Securities should note that Stripped Treasury Securities are sold at a deep
discount because the buyer of those securities obtains only the right to
receive a future fixed payment on the security and not any rights to periodic
interest payments thereon. Purchasers of these Securities acquire, in effect,
discount obligations that are economically identical to the "zero-coupon
bonds" that have been issued by corporations. Zero coupon bonds are debt
obligations which do not make any periodic payments of interest prior to
maturity and accordingly are issued at a deep discount. Under generally
accepted accounting principles, a holder of a security purchased at a discount
normally must report as an item of income for financial accounting purposes
the portion of the discount attributable to the applicable reporting period.
The calculation of this attributable income would be made on the "interest"
method which generally will result in a lesser amount of includible income in
earlier periods and a correspondingly larger amount in later periods. For
Federal income tax purposes, the inclusion will be on a basis that reflects
the effective compounding of accrued but unpaid interest effectively
represented by the discount. Although this treatment is similar to the
"interest" method described above, the "interest" method may differ to the
extent that generally accepted accounting principles permit or require the
inclusion of interest on the basis of a compounding period other than the
semi-annual period. See "Federal Tax Status" for the U.S. Treasury Portfolios,
if any.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the second Distribution Date following
their purchase of Units. Since interest on Bonds in the Trusts is payable at
varying intervals, usually in semi-annual installments, and distributions of
income are made to Unitholders at different intervals from receipt of
interest, the interest accruing to a Trust may not be equal to the amount of
money received and available for distribution from the Interest Account.
Therefore, on each Distribution Date the amount of interest actually deposited
in the Interest Account of a Trust and available for distribution may be
slightly more or less than the interest distribution made. In order to
eliminate fluctuations in interest distributions resulting from such
variances, the Trustee is authorized by the Trust Agreements to advance such
amounts as may be necessary to provide interest distributions of approximately
equal amounts. The Trustee will be reimbursed, without interest, for any such
advances from funds available in the Interest Account for such Trust.
The Trustee will distribute on each Distribution Date or shortly thereafter,
to each Unitholder of record of a Trust on the preceding Record Date, an
amount substantially equal to such holder's pro rata share of
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the cash balance, if any, in the Principal Account of such Trust computed as
of the close of business on the preceding Record Date. However, no
distribution will be required if the balance in the Principal Account is less
than $.01 per Unit. Notwithstanding the foregoing, the Trustee will make a
distribution to Unitholders of all principal relating to maturing U.S.
Treasury Obligations in any U.S. Treasury Portfolio or GNMA Portfolio within
twelve business days of the date of such maturity.
In connection with GNMA Portfolios only, the terms of the Ginnie Maes provide
for payment to the holders thereof (including a GNMA Portfolio) on the
fifteenth day of each month of amounts collected by or due to the issuers
thereof with respect to the underlying mortgages during the preceding month.
The Trustee will collect the interest due a GNMA Portfolio on the Securities
therein as it becomes payable and credit such interest to a separate Interest
Account for such GNMA Portfolio created by the Indenture. Distributions will
be made to each Unitholder of record of a GNMA Portfolio on the appropriate
Distribution Date (see "Essential Information") and will consist of an amount
substantially equal to such Unitholder's pro rata share of the cash balances,
if any, in the Interest Account, the Principal Account and any Capital Gains
Account of such GNMA Portfolio, computed as of the close of business on the
preceding Record Date.
Statements to Unitholders. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of interest
and the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit.
The accounts of each Trust are required to be audited annually, at the Trust's
expense, by independent auditors designated by the Sponsor, unless the Sponsor
determines that such an audit would not be in the best interest of the
Unitholders of such Trust. The accountants' report will be furnished by the
Trustee to any Unitholder of such Trust upon written request. Within a
reasonable period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar year was a
Unitholder of a Trust a statement, covering the calendar year, setting forth
for the applicable Trust:
A. As to the Interest Account:
1. The amount of interest received on the Securities (and for Tax-Exempt
Portfolios, the percentage of such amount by states and territories in which
the issuers of such Securities are located);
2. The amount paid from the Interest Account representing accrued interest of
any Units redeemed;
3. The deductions from the Interest Account for applicable taxes, if any, fees
and expenses (including auditing fees) of the Trustee, the Sponsor, the
Evaluator, and, if any, of bond counsel;
4. Any amounts credited by the Trustee to the Reserve Account described under
"General Information--Expenses of the Trusts";
5. The net amount remaining after such payments and deductions, expressed both
as a total dollar amount and a dollar amount per Unit outstanding on the last
business day of such calendar year; and
B. As to the Principal Account:
1. The dates of the maturity, liquidation or redemption of any of the
Securities and the net proceeds received therefrom excluding any portion
credited to the Interest Account;
2. The amount paid from the Principal Account representing the principal of
any Units redeemed;
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3. The deductions from the Principal Account for payment of applicable taxes,
if any, fees and expenses (including auditing fees) of the Trustee, the
Sponsor, the Evaluator, and, if any, of bond counsel;
4. The amount of when-issued interest treated as a return of capital, if any;
5. Any amounts credited by the Trustee to the Reserve Account described under
"General Information--Expenses of the Trusts";
6. The net amount remaining after distributions of principal and deductions,
expressed both as a dollar amount and as a dollar amount per Unit outstanding
on the last business day of the calendar year; and
C. The following information:
1. A list of the Securities as of the last business day of such calendar year;
2. The number of Units outstanding on the last business day of such calendar
year;
3. The Redemption Price based on the last evaluation made during such calendar
year;
4. The amount actually distributed during such calendar year from the Interest
and Principal Accounts (and Capital Gains Account, if applicable) separately
stated, expressed both as total dollar amounts and as dollar amounts per Unit
outstanding on the Record Dates for each such distribution.
Rights of Unitholders. A Unitholder may at any time tender Units to the
Trustee for redemption. The death or incapacity of any Unitholder will not
operate to terminate a Trust nor entitle legal representatives or heirs to
claim an accounting or to bring any action or proceeding in any court for
partition or winding up of a Trust.
No Unitholder shall have the right to control the operation and management of
any Trust in any manner, except to vote with respect to the amendment of the
Trust Agreements or termination of any Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolios of the Trusts by the purchase, sale
or substitution of Securities, except in the special circumstances noted below
and as indicated earlier under "General Information--Trust Information"
regarding the substitution of Replacement Securities for any Failed
Securities. Thus, with the exception of the redemption or maturity of
Securities in accordance with their terms, the assets of the Trusts will
remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Securities the value of which
has been affected by certain adverse events including institution of certain
legal proceedings or decline in price or the occurrence of other market
factors, including advance refunding, so that in the opinion of the Sponsor
the retention of such Securities in a Trust would be detrimental to the
interest of the Unitholders. The proceeds from any such sales, exclusive of
any portion which represents accrued interest, will be credited to the
Principal Account of such Trust for distribution to the Unitholders.
The Sponsor is required to instruct the Trustee to reject any offer made by an
issuer of Securities to issue new obligations in exchange or substitution for
any of such Securities pursuant to a refunding financing plan, except that the
Sponsor may instruct the Trustee to accept or reject such an offer or to take
any
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other action with respect thereto as the Sponsor may deem proper if (1) the
issuer is in default with respect to such Securities or (2) in the written
opinion of the Sponsor the issuer will probably default with respect to such
Securities in the reasonably forseeable 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 Securities originally
deposited thereunder. Within five days after deposit of obligations in
exchange or substitution for underlying Securities, the Trustee is required to
give notice thereof to each Unitholder, identifying the Securities eliminated
and the Securities substituted therefor.
The Trustee may sell Securities, designated by the Sponsor, from a Trust for
the purpose of redeeming Units of such Trust tendered for redemption and the
payment of expenses.
ADMINISTRATION OF THE TRUSTS
The Trustee. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its offices at 101
Barclay Street, New York, New York 10286 (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 Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of any Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreements, reference is made
to the material set forth under "General Information--Unitholders."
In accordance with the Trust Agreements, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address
of, and the number of Units held by, every Unitholder of each Trust. Such
books and records shall be open to inspection by any Unitholder of such Trust
at all reasonable times during usual business hours. The Trustee shall make
such annual or other reports as may from time to time be required under any
applicable state or Federal statute, rule or regulation. The Trustee shall
keep a certified copy or duplicate original of the Trust Agreements on file in
its office available for inspection at all reasonable times during usual
business hours by any Unitholder, together with a current list of the
Securities held in each Trust. Pursuant to the Trust Agreements, the Trustee
may employ one or more agents for the purpose of custody and safeguarding of
Securities comprising the Trusts.
Under the Trust Agreements, the Trustee or any successor trustee may resign
and be discharged of its duties created by the Trust Agreements by executing
an instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than 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 at any time remove the Trustee,
with or without cause, and appoint a successor trustee as provided in the
Trust Agreements. Notice of such removal and appointment shall be mailed to
each Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original Trustee shall vest in the successor. The Trustee
shall be a corporation organized under the laws of the United States, or any
state thereof, which is authorized under such laws to exercise
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trust powers. The Trustee shall have at all times an aggregate capital,
surplus and undivided profits of not less than $5,000,000.
The Evaluator. EVEREN Unit Investment Trusts, a service of EVEREN Securities,
Inc., the Sponsor, also serves as Evaluator. The Evaluator may resign or be
removed by the Trustee in which event the Trustee is to use its best efforts
to appoint a satisfactory successor. Such resignation or removal shall become
effective upon acceptance of appointment by the successor evaluator. If upon
resignation of the Evaluator no successor has accepted appointment within 30
days after notice of resignation, the Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor. Notice of such
resignation or removal and appointment shall be mailed by the Trustee to each
Unitholder. At the present time, pursuant to a contract with the Evaluator,
Muller Data Corporation, a non-affiliated firm regularly engaged in the
business of evaluating, quoting or appraising comparable securities, provides,
for both the initial offering period and secondary market transactions,
portfolio evaluations of the Securities in the Trusts which are then reviewed
by the Evaluator. In the event the Sponsor is unable to obtain current
evaluations from Muller Data Corporation, it may make its own evaluations or
it may utilize the services of any other non-affiliated evaluator or
evaluators it deems appropriate.
Amendment and Termination. The Trust Agreements may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or
(3) to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Agreements with respect to the Trusts may also be
amended in any respect by the Sponsor and the Trustee, or any of the
provisions thereof may be waived, with the consent of the holders of Units
representing 66 2/3% of the Units then outstanding of such Trust, provided
that no such amendment or waiver will reduce the interest of any Unitholder
thereof without the consent of such Unitholder or reduce the percentage of
Units required to consent to any such amendment or waiver without the consent
of all Unitholders of such Trust. In no event shall any Trust Agreement be
amended to increase the number of Units of a Trust issuable thereunder or to
permit, except in accordance with the provisions of such Trust Agreement, the
acquisition of any Securities in addition to or in substitution for those
initially deposited in a Trust. The Trustee shall promptly notify Unitholders
of the substance of any such amendment.
The Trust Agreements provide that the Trusts shall terminate upon the
maturity, redemption or other disposition of the last of the Securities held
in a Trust. If the value of a Trust shall be less than the applicable minimum
value stated under "Essential Information," the Trustee may, in its
discretion, and shall, when so directed by the Sponsor, terminate the Trust. A
Trust may be terminated at any time by the holders of Units representing 66
2/3% of the Units thereof then outstanding. In the event of termination of a
Trust, written notice thereof will be sent by the Trustee to all Unitholders
of such Trust. Within a reasonable period after termination, the Trustee will
sell any Securities remaining in such Trust and, after paying all expenses and
charges incurred by the Trust, will distribute to Unitholders thereof (upon
surrender for cancellation of certificates for Units, if issued) their pro
rata share of the balances remaining in the Interest and Principal Accounts
(and Capital Gains Account, if applicable) of such Trust.
Limitations on Liability. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from its responsibilities under the
Trust Agreements, but will be under no liability to the Unitholders for taking
any action or refraining from any action in good faith pursuant to the Trust
Agreements or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct. The Sponsor
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shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreements provide that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
certificates except by reason of its own gross negligence, bad faith or
willful misconduct, nor shall the Trustee be liable or responsible in any way
for depreciation or loss incurred by reason of the sale by the Trustee of any
Securities. In the event that the Sponsor shall fail to act, the Trustee may
act and shall not be liable for any such action taken by it in good faith. The
Trustee shall not be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the interest
thereon. In addition, the Trust Agreements contain other customary provisions
limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. The Trust Agreements provide that the determinations made by the
Evaluator shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee or Unitholders for errors in judgment, but shall be
liable only for its gross negligence, lack of good faith or willful
misconduct.
EXPENSES OF THE TRUSTS
The Sponsor will charge the Trusts a surveillance fee for services performed
for the Trusts in an amount not to exceed that amount set forth in "Essential
Information" but in no event will such compensation, when combined with all
compensation received from other unit investment trusts for which the Sponsor
both acts as sponsor and provides portfolio surveillance, exceed the aggregate
cost to the Sponsor for providing such services. Such fee shall be based on
the total number of Units of the related Trust outstanding as of the January
Record Date for any annual period. The Sponsor will receive a portion of the
sales commissions paid in connection with the purchase of Units and will share
in profits, if any, related to the deposit of Securities in the Trusts. The
Sponsor and other Underwriters have borne all the expenses of creating and
establishing the Trusts including the cost of the initial preparation,
printing and execution of the Prospectus, Trust Agreements and certificates,
legal and accounting expenses, advertising and selling expenses, payment of
closing fees, the expenses of the Trustee, evaluation fees relating to the
deposit and other out-of-pocket expenses.
The Trustee receives for its services fees set forth under "Essential
Information." The Trustee fee which is calculated monthly is based on the
largest aggregate principal amount of Securities in a Trust at any time during
the period. In no event shall the Trustee be paid less than $2,000 per Trust
in any one year. Funds that are available for future distributions,
redemptions and payment of expenses are held in accounts which are non-
interest bearing to Unitholders and are available for use by the Trustee
pursuant to normal trust procedures; however, the Trustee is also authorized
by the Trust Agreements to make from time to time certain non-interest bearing
advances to the Trusts. During the first year the Trustee has agreed to lower
its fees and absorb expenses by the amount set forth under "Essential
Information." The Trustee's fee will not be increased in future years in order
to make up this reduction in the Trustee's fee. The Trustee's fee is payable
on or before each Distribution Date.
For evaluation of Securities in each Trust, the Evaluator shall receive a fee,
payable monthly, calculated on the basis of that annual rate set forth under
"Essential Information," based upon the largest aggregate principal amount of
Securities in such Trust at any time during such monthly period.
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The Trustee's and Evaluator's fees are deducted first from the Interest
Account of a Trust to the extent funds are available and then from the
Principal Account. Such fees may be increased without approval of Unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index
entitled "All Services Less Rent of Shelter," published by the United States
Department of Labor, or any equivalent index substituted therefor. In
addition, the Trustee's fee may be periodically adjusted in response to
fluctuations in short-term interest rates (reflecting the cost to the Trustee
of advancing funds to a Trust to meet scheduled distributions).
The following additional charges are or may be incurred by the Trusts: (a)
fees for the Trustee's extraordinary services; (b) expenses of the Trustee
(including legal and auditing expenses and insurance costs for Insured Trust
Funds, but not including any fees and expenses charged by any agent for
custody and safeguarding of Securities) and of bond counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by
the Trustee to protect a Trust or the rights and interests of the Unitholders;
(e) indemnification of the Trustee for any loss, liability or expense incurred
by it in the administration of a Trust not resulting from gross negligence,
bad faith or willful misconduct on its part; (f) indemnification of the
Sponsor for any loss, liability or expense incurred in acting in that capacity
without gross negligence, bad faith or willful misconduct; and (g)
expenditures incurred in contacting Unitholders upon termination of the
Trusts. The fees and expenses set forth herein are payable out of the
appropriate Trust and, when owing to the Trustee, are secured by a lien on
such Trust. Fees or charges relating to a Trust shall be allocated to each
Trust in the same ratio as the principal amount of such Trust bears to the
total principal amount of all Trusts. Fees or charges relating solely to a
particular Trust shall be charged only to such Trust.
Fees and expenses of the Trusts shall be deducted from the Interest Account
thereof, or, to the extent funds are not available in such Account, from the
Principal Accounts. The Trustee may withdraw from the Principal Account or the
interest Account of any Trust such amounts, if any, as it deems necessary to
establish a reserve for any taxes or other governmental charges or other
extraordinary expenses payable out of the Trust. Amounts so withdrawn shall be
credited to a separate account maintained for a Trust known as the Reserve
Account and shall not be considered a part of the Trust when determining the
value of the Units until such time as the Trustee shall return all or any part
of such amounts to the appropriate account.
THE SPONSOR
The Sponsor, EVEREN Unit Investment Trusts, with an office at 77 West Wacker
Drive, 29th Floor, Chicago, Illinois 60601, (800) 621-5024, is a service of
EVEREN Securities, Inc., which is a wholly-owned subsidiary of EVEREN Capital
Corporation. The Sponsor acts as underwriter of a number of other unit
investment trusts and will act as underwriter of any other unit investment
trust products developed by the Sponsor in the future. As of December 31,
1995, the total stockholder's equity of EVEREN Securities, Inc. was
$261,286,862.
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreements or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreements and liquidate the Trusts as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreements.
GI-17
GENERAL INFORMATION
<PAGE>
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to these Trusts. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trusts. More comprehensive financial
information can be obtained upon request from the Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The statements of condition and the related portfolios at the Initial Date of
Deposit included in this Prospectus have been audited by Grant Thornton LLP,
independent certified public accountants, as set forth in their report in the
Prospectus, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing.
GI-18
GENERAL INFORMATION
<PAGE>
<TABLE>
<CAPTION>
CONTENTS PAGE
-----
<S> <C>
SUMMARY.................................................................. 2
ESSENTIAL INFORMATION.................................................... 3
THE TRUST FUNDS.......................................................... 6
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS............................................................. 8
STATEMENT OF CONDITION................................................... 9
PUBLIC OFFERING OF UNITS................................................. 10
Public Offering Price................................................... 10
Accrued interest........................................................ 14
Comparison of Public Offering Price and
Redemption Price....................................................... 14
Public Distribution of Units............................................ 15
Profits of Sponsor and Underwriters..................................... 17
THE INSURED CORPORATE SERIES............................................. IC-1
The Trust Portfolio..................................................... IC-1
Series Information...................................................... IC-2
Portfolios.............................................................. IC-3
Notes to Portfolios..................................................... IC-5
Risk Factors............................................................ IC-6
Insurance on the Bonds.................................................. IC-8
Federal Tax Status...................................................... IC-9
Tax Reporting and Reallocation.......................................... IC-13
Estimated Cash Flows to Unitholders..................................... IC-14
THE U.S. TREASURY PORTFOLIO SERIES....................................... US-1
The Trust Portfolio..................................................... US-1
Risk Factors............................................................ US-1
Portfolios.............................................................. US-2
Notes to Portfolios..................................................... US-2
Federal Tax Status...................................................... US-3
Tax Reporting and Reallocation.......................................... US-6
Estimated Cash Flows to Unitholders..................................... US-6
THE TAX EXEMPT PORTFOLIOS................................................ TE-1
The Trust Portfolio..................................................... TE-1
Series Information...................................................... TE-1
Taxable Equivalent Estimated Current
Return Tables.......................................................... TE-3
Portfolio............................................................... TE-4
Notes to Portfolio...................................................... TE-5
Municipal Bond Risk Factors............................................. TE-6
State Risk Factors and State Tax Status................................. TE-9
Insurance on the Bonds.................................................. TE-13
Federal Tax Status...................................................... TE-16
Tax Reporting and Reallocation.......................................... TE-20
Underwriting............................................................ TE-21
Estimated Cash Flows to Unitholders..................................... TE-22
GENERAL INFORMATION...................................................... GI-1
Rating of Units......................................................... GI-1
Trust Information....................................................... GI-1
Retirement Plans........................................................ GI-4
Distribution Reinvestment............................................... GI-6
Interest, Estimated Long-Term Return and Estimated
Current Return......................................................... GI-6
Market for Units........................................................ GI-7
Redemption.............................................................. GI-8
Unitholders............................................................. GI-10
Investment Supervision.................................................. GI-13
Administration of the Trusts............................................ GI-14
Expenses of the Trusts.................................................. GI-16
The Sponsor............................................................. GI-17
Legal Opinions.......................................................... GI-18
Independent Certified Public Accountants................................ GI-18
</TABLE>
--------------------
THIS PROSPECTUS DOES NOT CONTAIN ALL OF THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT AND EXHIBITS RELATING THERETO, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND
THE INVESTMENT COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS MADE.
--------------------
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
TRUSTS, THE TRUSTEE, OR THE SPONSOR. THE TRUSTS ARE REGISTERED AS UNIT
INVESTMENT TRUSTS UNDER THE INVESTMENT COMPANY ACT OF 1940. SUCH REGISTRATION
DOES NOT IMPLY THAT THE TRUSTS OR THE UNITS HAVE BEEN GUARANTEED, SPONSORED,
RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY STATE OR ANY AGENCY OR
OFFICER THEREOF.
--------------------
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.
<PAGE>
- --------------------
EVEREN
Unit
Investment
Trusts
- --------------------
---------------------
Prospectus
---------------------
Insured Corporate Series 9
Insured Corporate Series 10
U.S. Treasury Portfolio Series 17
U.S. Treasury Portfolio Series 18
Insured Michigan Series 14
May 8, 1996
EVEREN Unit Investment Trusts.
<PAGE>
This Registration Statement on Form S-6 comprises the following papers and
documents.
<TABLE>
<C> <S>
The facing sheet of Form S-6.
The cross-reference sheet.
The prospectus.
The signatures.
The following exhibits.
1.1(a). Form of Trust Indenture and Agreement for the Insured Corporate
Series.
1.1(b). Form of Trust Indenture and Agreement for the U.S. Treasury
Portfolios.
1.1(c). Form of Trust Indenture and Agreement for the Tax-Exempt Portfolio.
1.1.1(a). Standard Terms and Conditions of Trust for the Insured Corporate
Series. Reference is made to Exhibit 1.1.1 to the Registration
Statement on Form S-6 with respect to EVEREN Unit Investment Trusts,
Series 40 (Registration No. 33-64619) as filed on December 9, 1995.
1.1.1(b). Standard Terms and Conditions of Trust for the U.S. Treasury
Portfolios.
1.1.1(c). Standard Terms and Conditions of Trust for the Tax-Exempt Portfolio.
Reference is made to Exhibit 1.1.1 to the Registration Statement on
Form S-6 with respect to EVEREN Unit Investment Trusts, Series 41
(Registration No. 333-00065) as filed on January 10, 1996.
2.1. Form of Certificate of Ownership (pages two to four, inclusive, of
the Standard Terms and Conditions of Trust included as Exhibit
1.1.1).
3.1. Opinion of counsel to the Sponsor as to legality of the securities
being registered including a consent to the use of its name under
the headings "Federal Tax Status" for each Trust and "Legal
Opinions" in the Prospectus and opinion of counsel as to the Federal
income tax status of the securities being registered.
3.2. Opinion and consent of counsel as to certain Michigan tax matters.
4.1. Consent of Standard & Poor's.
4.2. Consent of Cantor Fitzgerald & Co.
4.3. Consent of Grant Thornton LLP.
Ex-27. Financial Data Schedules.
</TABLE>
S-1
<PAGE>
SIGNATURES
THE REGISTRANT, EVEREN UNIT INVESTMENT TRUSTS, SERIES 47, HEREBY IDENTIFIES
SERIES 1 OF THE KEMPER GOVERNMENT SECURITIES TRUST, SERIES 39 (GNMA
PORTFOLIO), SERIES 40 (GNMA PORTFOLIO) AND SERIES 41 (U.S. TREASURY
PORTFOLIO), SERIES 1 OF THE KEMPER INSURED CORPORATE TRUST, MULTI-STATE SERIES
19 OF THE KEMPER TAX-EXEMPT INSURED INCOME TRUST AND KEMPER DEFINED FUNDS
INSURED NATIONAL SERIES 1 FOR PURPOSES OF THE REPRESENTATIONS REQUIRED BY RULE
487 AND REPRESENTS THE FOLLOWING:
(1) THAT THE PORTFOLIO SECURITIES DEPOSITED IN THE SERIES AS TO THE
SECURITIES OF WHICH THIS REGISTRATION STATEMENT IS BEING FILED DO NOT
DIFFER MATERIALLY IN TYPE OR QUALITY FROM THOSE DEPOSITED IN SUCH PREVIOUS
SERIES;
(2) THAT, EXCEPT TO THE EXTENT NECESSARY TO IDENTIFY THE SPECIFIC
PORTFOLIO SECURITIES DEPOSITED IN, AND TO PROVIDE ESSENTIAL FINANCIAL
INFORMATION FOR, THE SERIES WITH RESPECT TO THE SECURITIES OF WHICH THIS
REGISTRATION STATEMENT IS BEING FILED, THIS REGISTRATION STATEMENT DOES NOT
CONTAIN DISCLOSURES THAT DIFFER IN ANY MATERIAL RESPECT FROM THOSE
CONTAINED IN THE REGISTRATION STATEMENTS FOR SUCH PREVIOUS SERIES AS TO
WHICH THE EFFECTIVE DATE WAS DETERMINED BY THE COMMISSION OR THE STAFF; AND
(3) THAT IT HAS COMPLIED WITH RULE 460 UNDER THE SECURITIES ACT OF 1933.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
EVEREN UNIT INVESTMENT TRUSTS, SERIES 47, HAS DULY CAUSED THIS AMENDMENT TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS, ON
THE 8TH DAY OF MAY, 1996.
EVEREN UNIT INVESTMENT TRUSTS,
SERIES 47
Registrant
By: EVEREN UNIT INVESTMENT TRUSTS,
a service of EVEREN Securities,
Inc.
Depositor
/s/ Michael J. Thoms
By: _________________________________
Michael J. Thoms
S-2
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON MAY 8, 1996 BY THE
FOLLOWING PERSONS, WHO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF
EVEREN SECURITIES, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ James R. Boris Chairman and Chief Executive Officer
- -------------------------------------------
James R. Boris
/s/ Daniel D. Williams Senior Executive Vice President, Chief
- ------------------------------------------- Financial Officer and Treasurer
Daniel D. Williams
/s/ Frank V. Geremia Senior Executive Vice President
- -------------------------------------------
Frank V. Geremia
/s/ Stephen G. McConahey President and Chief Operating Officer
- -------------------------------------------
Stephen G. McConahey
/s/ Stanley R. Fallis Senior Executive Vice President and Chief
- ------------------------------------------- Administrative Officer
Stanley R. Fallis
/s/ David M. Greene Senior Executive Vice President and
- ------------------------------------------- Director of Client Services
David M. Greene
/s/ Thomas R. Reedy Senior Executive Vice President and
- ------------------------------------------- Director of Capital Markets
Thomas R. Reedy
/s/ Janet L. Reali Executive Vice President, Corporate Counsel
- ------------------------------------------- and Corporate Secretary
Janet L. Reali
</TABLE>
/s/ Michael J. Thoms
--------------------------------
Michael J. Thoms
MICHAEL J. THOMS SIGNS THESE DOCUMENTS PURSUANT TO POWERS OF ATTORNEY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WITH AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT ON FORM S-6 FOR EVEREN UNIT INVESTMENT TRUSTS, SERIES
39 (FILE NO. 33-63111).
S-3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> INSURED CORPORATE
<NUMBER> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-08-1996
<PERIOD-END> MAY-08-1996
<INVESTMENTS-AT-COST> 1,281,135
<INVESTMENTS-AT-VALUE> 1,281,135
<RECEIVABLES> 30,748
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,311,883
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30,748
<TOTAL-LIABILITIES> 30,748
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,281,135
<SHARES-COMMON-STOCK> 135,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,281,135
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> INSURED CORPORATE
<NUMBER> 10
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-08-1996
<PERIOD-END> MAY-08-1996
<INVESTMENTS-AT-COST> 1,220,621
<INVESTMENTS-AT-VALUE> 1,220,621
<RECEIVABLES> 27,574
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,248,195
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 27,574
<TOTAL-LIABILITIES> 27,574
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,220,621
<SHARES-COMMON-STOCK> 130,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,220,621
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> U.S. TREASURY
<NUMBER> 17
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-08-1996
<PERIOD-END> MAY-08-1996
<INVESTMENTS-AT-COST> 493,623
<INVESTMENTS-AT-VALUE> 493,623
<RECEIVABLES> 13,263
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 506,886
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,263
<TOTAL-LIABILITIES> 13,263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 493,623
<SHARES-COMMON-STOCK> 50,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 493,623
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> U.S. TREASURY
<NUMBER> 18
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-08-1996
<PERIOD-END> MAY-08-1996
<INVESTMENTS-AT-COST> 492,510
<INVESTMENTS-AT-VALUE> 492,510
<RECEIVABLES> 13,093
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 505,603
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,093
<TOTAL-LIABILITIES> 13,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 492,510
<SHARES-COMMON-STOCK> 50,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 492,510
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> INSURED MICHIGAN
<NUMBER> 14
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAY-08-1996
<PERIOD-END> MAY-08-1996
<INVESTMENTS-AT-COST> 2,510,841
<INVESTMENTS-AT-VALUE> 2,510,841
<RECEIVABLES> 25,607
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,536,448
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25,607
<TOTAL-LIABILITIES> 25,607
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,510,841
<SHARES-COMMON-STOCK> 265,500
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,510,841
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 1.1(a)
EVEREN Unit Investment Trusts, Series 47
Trust Agreement
Dated: May 8, 1996
This Trust Agreement between EVEREN Securities, Inc., as Depositor and
Evaluator, and The Bank of New York, as Trustee, sets forth certain provisions
in full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust for Corporate Bond Trusts Sponsored by
EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc. and
Subsequent Series, Effective: December 5, 1995" (herein called the "Standard
Terms and Conditions of Trust") and such provisions as are set forth in full and
such provisions as are incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the Provisions of Part ii hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(4), listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each Trust
Fund represented by each Unit is the amount set forth under "Essential
Information-Fractional Undivided Interest per Unit" in the Prospectus.
(c) The number of Units in each Trust is that amount set forth under
"Essential Information-Number of Units" in the Prospectus.
<PAGE>
-2-
(d) The "First General Record Date" shall be the first "Record Date"
set forth under "Essential Information" in the Prospectus.
(e) The amount of the second distribution of funds from the Interest
Account shall be that amount set forth under "Essential Information-
Interest Payments-First Payment per Unit" for each Trust in the Prospectus.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN SECURITIES, INC.
through its EVEREN Unit Investment Trusts
service
Depositor
By Robert K. Burke
------------------------------
Senior Vice President
THE BANK OF NEW YORK
By Ted Rudish
-------------------------------
Vice President
<PAGE>
SCHEDULE A
Bonds Initially Deposited
EVEREN Unit Investment Trusts Series 47
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus for each Trust.)
-4-
<PAGE>
Exhibit 1.1(b)
EVEREN Unit Investment Trusts, Series 47
Trust Agreement
Dated: May 8, 1996
This Trust Agreement between EVEREN Securities, Inc., as Depositor and
Evaluator, and The Bank of New York, as Trustee, sets forth certain provisions
in full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust for Government Securities Trusts
Sponsored by EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc.
and Subsequent Series, Effective: December 5, 1995" (herein called the "Standard
Terms and Conditions of Trust") and such provisions as are set forth in full and
such provisions as are incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the Provisions of Part ii hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(4), listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each Trust
Fund represented by each Unit is the amount set forth under "Essential
Information-Fractional Undivided Interest per Unit" in the Prospectus.
(c) The number of Units in each Trust is that amount set forth under
"Essential Information-Number of Units" in the Prospectus.
(d) The "First General Record Date" shall be the first "Record Date"
set forth under "Essential Information" in the Prospectus.
<PAGE>
(e) The amount of the second distribution of funds from the Interest
Account shall be that amount set forth under "Essential Information-
Interest Payments-First Payment per Unit" for each Trust in the Prospectus.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN SECURITIES, INC.
through its EVEREN Unit Investment Trusts
service
Depositor
By Robert K. Burke
------------------------------
Senior Vice President
THE BANK OF NEW YORK
By Ted Rudish
-------------------------------
Vice President
<PAGE>
SCHEDULE A
Bonds Initially Deposited
EVEREN Unit Investment Trusts Series 47
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus for each Trust.)
-4-
<PAGE>
Exhibit 1.1(c)
EVEREN Unit Investment Trusts, Series 47
Trust Agreement
Dated: May 8, 1996
This Trust Agreement between EVEREN Securities, Inc., as Depositor and
Evaluator, and The Bank of New York, as Trustee, sets forth certain provisions
in full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust for Tax-Exempt Portfolios Sponsored by
EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc. and
Subsequent Series, Effective: December 5, 1995" (herein called the "Standard
Terms and Conditions of Trust") and such provisions as are set forth in full and
such provisions as are incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the Provisions of Part ii hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(4), listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each Trust
Fund represented by each Unit is the amount set forth under "Essential
Information-Fractional Undivided Interest per Unit" in the Prospectus.
(c) The number of Units in each Trust is that amount set forth under
"Essential Information-Number of Units" in the Prospectus.
(d) The "First General Record Date" shall be the first "Record Date"
set forth under "Essential Information" in the Prospectus.
<PAGE>
(e) The amount of the second distribution of funds from the Interest
Account shall be that amount set forth under "Essential Information-
Interest Payments-First Payment per Unit" for each Trust in the Prospectus.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN SECURITIES, INC.
through its EVEREN Unit Investment Trusts
service
Depositor
By Robert K. Burke
------------------------------
Senior Vice President
THE BANK OF NEW YORK
By Ted Rudish
------------------------------------
Vice President
<PAGE>
SCHEDULE A
Bonds Initially Deposited
EVEREN Unit Investment Trusts Series 47
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus for each Trust.)
-4-
<PAGE>
Standard Terms and Conditions of Trust
for
Government Securities Trusts
Sponsored by
EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
Effective: May 8, 1996
among
EVEREN Securities, Inc.
Depositor and Evaluator
and
The Bank of New York
Trustee
___________________________________
Applicable to U.S. Treasury Portfolio Series 17 and Subsequent Series,
Rolling Income Treasury Series 3 and Subsequent Series
and GNMA Portfolio Series 6 and Subsequent Series
(including GNMA Reinvestment Trusts)
(Included in EVEREN Unit Investment Trusts, Series 47 and Subsequent Series)
___________________________________
<PAGE>
STANDARD TERMS AND CONDITIONS OF TRUST
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
Preambles 1
Article I Definitions.................................................................... 1
Section 1.01. Definitions.................................................................... 1
Article II Deposit of Securities; Acceptance of Trust; Form and Issuance of Units......... 6
Section 2.01. Deposit of Securities.......................................................... 6
Section 2.02. Acceptance of Trust............................................................ 6
Section 2.03. Issuance of Units.............................................................. 7
Section 2.04. Form of Certificates........................................................... 7
Article III Administration of Fund......................................................... 7
Section 3.01. Initial Costs.................................................................. 7
Section 3.02. Interest Account............................................................... 8
Section 3.03. Principal Account.............................................................. 8
Section 3.04. Reserve Account................................................................ 9
Section 3.05. Deductions and Distributions................................................... 9
Section 3.06. Distribution Statements........................................................ 11
Section 3.07. Extraordinary Sale of Securities............................................... 12
Section 3.08. Refunding Securities........................................................... 14
Section 3.09. Counsel........................................................................ 14
Section 3.10. Notice and Sale by Trustee..................................................... 15
Section 3.11. Trustee Not Required to Amortize............................................... 15
Section 3.12. Liability, Indemnification and Succession of Depositor......................... 15
Section 3.13. Notice to Depositor............................................................ 16
Section 3.14. Limited Replacement of Special Securities; Reinvestment of Principal........... 16
Section 3.15. Compensation of Depositor for Supervisory Services............................. 18
Section 3.16. Deferred Sales Charge.......................................................... 19
Article IV Evaluation of Securities; Evaluator............................................ 19
Section 4.01. Evaluation of Securities....................................................... 19
Section 4.02. Information for Unitholders.................................................... 20
Section 4.03. Compensation of Evaluator...................................................... 20
</TABLE>
-i-
<PAGE>
<TABLE>
<C> <S> <C>
Section 4.04. Liability of Evaluator......................................................... 20
Section 4.05. Resignation and Removal of Evaluator; Successor................................ 20
Article V Evaluation, Redemption, Purchase, Transfer, Interchange or Replacement of Units 21
Section 5.01. Evaluation..................................................................... 21
Section 5.02. Redemptions by Trustee; Purchases by Depositor................................. 22
Section 5.03. Transfer or Interchange of Units............................................... 24
Section 5.04. Certificates Mutilated, Destroyed, Stolen or Lost.............................. 24
Article VI Trustee........................................................................ 25
Section 6.01. General Definition of Trustee's Liabilities, Rights and Duties................. 25
Section 6.02. Books, Records and Reports..................................................... 28
Section 6.03. Indenture and List of Securities on File....................................... 28
Section 6.04. Compensation................................................................... 28
Section 6.05. Removal and Resignation of Trustee; Successor.................................. 29
Section 6.06. Qualifications of Trustee...................................................... 30
Article VII Rights of Unitholders.......................................................... 30
Section 7.01. Beneficiaries of Trust......................................................... 30
Section 7.02. Rights, Terms and Conditions................................................... 30
Article VIII Additional Covenants; Miscellaneous Provisions................................. 31
Section 8.01. Amendments..................................................................... 31
Section 8.02. Termination.................................................................... 32
Section 8.03. Construction................................................................... 33
Section 8.04. Registration of Units.......................................................... 33
Section 8.05. Written Notice................................................................. 33
Section 8.06. Severability................................................................... 34
Section 8.07. Dissolution of Depositor Not to Terminate...................................... 34
Execution.......................................................................................... 35
</TABLE>
------------------------------------
This Table of Contents does not constitute part of the Indenture
-ii-
<PAGE>
Exhibit 1.1.1(b)
STANDARD TERMS AND CONDITIONS OF TRUST
EFFECTIVE: MAY 8, 1996
These Standard Terms and Conditions of Trust are executed between EVEREN
Securities, Inc., as Depositor and Evaluator and The Bank of New York, as
Trustee.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, the Trustee and the Evaluator agree as follows:
INTRODUCTION
These Standard Terms and Conditions of Trust effective shall be applicable
to certain Series of EVEREN Unit Investment Trusts established after the date of
effectiveness hereof, as provided in this paragraph. For all Series established
after the date of effectiveness hereof to which these Standard Terms and
Conditions of Trust are to be applicable, the Depositor, the Trustee and the
Evaluator shall execute a Trust Agreement incorporating by reference these
Standard Terms and Conditions of Trust and designating any exclusion from or
exception to such incorporation by reference for the purposes of that Series or
variation of the terms hereof for the purposes of that Series and specifying for
that Series (if not otherwise specified in the Prospectus for such Series) (i)
the Securities deposited in trust and the number of Units delivered by the
Trustee in exchange for the Securities pursuant to Section 2.03, (ii) the
fractional undivided interest represented by each Unit, (iii) the First
Settlement Date, (iv) the amount of the Trustee advancement with respect to any
"when issued" Securities deposited in the Fund, and (vi) the amount of the
second distribution from the Interest Account.
Now Therefore, in consideration of the premises and of the mutual
agreements herein contained the Depositor and the Evaluator and the Trustee
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Indenture the
following words and phrases, unless the context clearly indicates otherwise,
shall have the following meanings:
(1) "Business Day" shall mean any day other than a Sunday or, in the
City of New York, a legal holiday or a day on which banking institutions
are authorized by law to close.
<PAGE>
(2) "Certificate" shall mean any one of the certificates executed by
the Trustee and the Depositor evidencing ownership of an undivided
fractional interest in a Trust in substantially the following form with the
blanks appropriately filled in:
Face of Certificate
Number EVEREN Unit Investment Trusts Series Units
Certificate of Beneficial Ownership
This Certifies That _____________________________ is the registered owner
of _______ Unit(s) of fractional undivided interest in EVEREN Unit Investment
Trusts of the above Series (herein referred to as the "Trust") created under the
laws of the State of New York pursuant to the Indenture and the related Trust
Agreement, a copy of which is available at the office of the Trustee. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the aforesaid Indenture and the related Trust Agreement to which
the holder of this Certificate by virtue of the acceptance hereof assents and is
bound. This Certificate is transferable and interchangeable by the registered
owner in person or by his duly authorized attorney at the office of the Trustee
upon surrender of this Certificate properly endorsed or accompanied by a written
instrument of transfer and any other documents that the Trustee may require for
transfer, in form satisfactory to the Trustee, and payment of the fees and
expenses provided in the Trust Agreement.
Witness the facsimile signature of the Depositor and the manual signature
of an authorized signatory of the Trustee.
Dated:
EVEREN Securities, Inc., The Bank of New York,
Depositor Trustee
By__________________________ By___________________________________
Authorized Signature Authorized Signature
-2-
<PAGE>
Reverse of Certificate
Form of Assignment
For Value Received _______________________________________ hereby sells,
assigns and transfers unto
____________________
____________________
Please Insert Social Security or Other
Identifying Number of Assignee
__________________________
__________________________
the within Certificate and does hereby irrevocably constitute and appoint
___________________________________________________, attorney, to transfer the
within Certificate on the books of the Trustee, with full power of substitution
in the premises.
Dated: __________________________
Notice: The signature to this assignment must correspond with the
name as written upon the face of the Certificate in every particular,
without alteration or enlargement or any change whatever, and must be
guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guarantee program
in addition to, or in substitution for, STAMP, as may be accepted by
the Trustee.
Signature Guaranteed
By______________________________
-3-
<PAGE>
(3) "Contract Securities" shall mean Securities which are to be
acquired by a Trust pursuant to contracts, including (i) Securities listed
in Schedule A to the Trust Agreement and (ii) Securities which the
Depositor has contracted to purchase for the Fund pursuant to Section 3.14
hereof.
(4) "Depositor" shall mean EVEREN Securities, Inc., acting through
its EVEREN Unit Investment Trusts service, and its successors in interest,
or any successor depositor appointed as hereinafter provided.
(5) "Distribution Dates" shall mean the dates on which distributions
are made to Unitholders as set forth in the Prospectus.
(6) "Evaluator" shall mean EVEREN Securities, Inc., acting through
its EVEREN Unit Investment Trusts service, and its successors in interest,
or any successor evaluator appointed as hereinafter provided.
(7) "Evaluation Time" shall mean the close of business of the
Depositor, unless another meaning is assigned to it in the Prospectus.
(8) "Fund" shall mean the collective Trusts created by this
Indenture, which shall consist of the Securities held pursuant and subject
to the Indenture together with all undistributed interest received or
accrued thereon, any undistributed cash realized from the sale, redemption,
liquidation, prepayment or maturity thereof. Such amounts as may be on
deposit in any Reserve Account hereinafter established shall be excluded
from the Fund.
(9) "Indenture" shall mean these Standard Terms and Conditions of
Trust as originally executed or, if amended as hereinafter provided, as so
amended, together with the Trust Agreement creating a particular series of
the Fund.
(10) "Initial Date of Deposit" shall mean, with respect to any
Trust, the date of the Trust Agreement creating such Trust.
(11) "Percentage Ratio" shall mean, with respect to any Trust which
will issue additional Units pursuant to Section 2.03, the original
percentage relationships established on the Initial Date of Deposit between
the principal amounts of Securities or specified interest rates and ranges
of maturities as reflected in the portfolio of such Trust set forth in the
Prospectus on such Initial Date of Deposit.
(12) "Prospectus" shall mean (a) the prospectus relating to a Trust
filed with the Securities and Exchange Commission pursuant to Rule 497
under the Securities Act of 1933, as amended, and dated the date of the
Trust Agreement or (b) if any post-effective amendment to such prospectus
described in (a) shall have been subsequently made effective under the
Securities Act of 1933, as amended, such post-effective amendment thereto.
-4-
<PAGE>
(13) "Record Dates" shall mean the record dates relating to the
computation of distributions to Unitholders as set forth in the Prospectus.
(14) "Reinvestment Trust" shall mean a Trust which reinvests,
pursuant to Section 3.14(b), principal realized upon the sale, redemption,
liquidation, prepayment or maturity of Securities into Reinvestment
Securities (as such term is defined in Section 3.14(b)).
(15) "Securities" shall mean bonds, notes, other fixed income
securities, other evidences of indebtedness, certificates of participation,
mortgage-backed securities or other obligations issued or guaranteed by the
full faith and credit of the United States or by any agency or
instrumentality thereof, including delivery statements relating to "when-
issued" and/or "regular way" contracts, if any, for the purchase of certain
securities and certified or bank check or checks or letter of credit or
letters of credit sufficient in amount or availability required for such
purchase, deposited in irrevocable trust and listed in all Schedules of the
Trust Agreement, any additional obligations deposited pursuant to Section
2.01 and any obligations received in exchange, substitution or replacement
for such obligations pursuant to Section 3.14 hereof, as may from time to
time continue to be held as a part of the Trusts.
(16) "Supplemental Trust Agreement" shall mean an amendment or
supplement to the Trust Agreement executed pursuant to Section 2.01(b) for
the purpose of depositing additional Securities in a Trust and issuing
additional Units.
(17) "Trust" shall mean any one of the separate trusts created by
the Trust Agreement, which shall consist of the Securities held pursuant
and subject to the Indenture together with all undistributed interest
received or accrued thereon, any undistributed cash realized from the sale,
redemption, liquidation, prepayment or maturity thereof. Such amounts as
may be on deposit in the Reserve Account hereinafter established shall be
excluded from a Trust.
(18) "Trust Agreement" shall mean the Trust Agreement for the
particular series of the Fund into which these Standard Terms and
Conditions is incorporated.
(19) "Trustee" shall mean The Bank of New York or any successor
trustee appointed as hereinafter provided, or any entity which acquires all
or a substantial part of the unit investment trust division of The Bank of
New York.
(20) "Unitholder" shall mean the registered holder of any Unit,
whether or not in certificated form, as recorded on the books of the
Trustee, his legal representatives and heirs and the successors of any
corporation, partnership or other legal entity which is a registered holder
of any Unit and as such shall be deemed a beneficiary of the Trust created
by this Indenture to the extent of his pro rata share thereof.
(21) "Units" in respect of any Trust shall mean the fractional
undivided interest in and ownership of the Trust equal initially to the
fraction of the respective
-5-
<PAGE>
Trust specified in the Prospectus, the denominator of which shall be
increased by the number of any additional Units issued pursuant to Section
2.03 and decreased by the number of any such Units redeemed as provided in
Section 5.02.
(22) Words importing singular number shall include the plural number
in each case and vice versa, and words importing persons shall include
corporations and associations, as well as natural persons.
(23) The words "herein," "hereby," "herewith," "hereof,"
"hereinafter," "hereunder," "hereinabove," "hereafter," "heretofore" and
similar words or phrases of reference and association shall refer to this
Indenture in its entirety.
ARTICLE II
DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST; FORM AND
ISSUANCE OF UNITS
Section 2.01. Deposit of Securities. (a) The Depositor, on the Initial
Date of Deposit, has deposited with the Trustee in trust the Securities listed
in the Schedules attached to the Trust Agreement in bearer form or duly endorsed
in blank or accompanied by all necessary instruments of assignment and transfer
in proper form to be held, managed and applied by the Trustee as herein
provided. The Depositor shall deliver the Securities listed on said Schedules to
the Trustee which were not actually delivered concurrently with the execution
and delivery of the Trust Agreement within 90 days after said execution and
delivery, or if the contract to buy such Security between the Depositor and
seller is terminated by the seller thereof for any reason beyond the control of
the Depositor, the Depositor shall forthwith take the remedial action specified
in Section 3.14.
(b) From time to time following the Initial Date of Deposit for a Trust,
the Depositor is hereby authorized, in its discretion, to assign, convey to and
deposit with the Trustee additional Securities for such Trust, duly endorsed in
blank or accompanied by all necessary instruments of assignment and transfer in
proper form, to be held, managed and applied by the Trustee as herein provided.
Such deposit of additional Securities shall be made, in each case, pursuant to
an executed Supplemental Trust Agreement which shall be accompanied by a legal
opinion issued by legal counsel satisfactory to the Depositor. Any additional
Securities to be deposited shall be made, as nearly as practicable, in
accordance with the Percentage Ratios for such Securities. The Depositor in each
case shall ensure that each deposit of additional Securities pursuant to this
Section shall have the same ratio of Securities (based on principal amount) as
existed on the Initial Date of Deposit for each Trust. Any brokerage fees
related to the purchase of Securities deposited in the Trust after the Initial
Date of Deposit shall be an expense of such Trust.
Section 2.02. Acceptance of Trust. The Trustee hereby accepts the
trusts herein created for the use and benefit of the Unitholders, subject to the
terms and conditions of this Indenture.
-6-
<PAGE>
Section 2.03. Issuance of Units. (a) The Trustee hereby acknowledges
receipt of the deposit of the Securities listed in the Schedules to the Trust
Agreement and referred to in Section 2.01 hereof and, simultaneously with the
receipt of said deposit, has recorded on its books the ownership, by the
Depositor or such other person or persons as may be indicated by the Depositor,
of the aggregate number of Units specified in the Trust Agreement and has
delivered, or on the order of the Depositor will deliver, in exchange for such
Securities, documentation evidencing the ownership of the number of Units
specified and, if such Units are represented by a Certificate, such Certificate
substantially in the form above recited, representing the ownership of those
Units. The Trustee hereby agrees that on the date of any Supplemental Trust
Agreement, it shall acknowledge that the additional Securities identified
therein have been deposited with it by recording on its books the ownership, by
the Depositor or such other person or persons as may be indicated by the
Depositor, of the aggregate number of Units to be issued in respect of such
additional Securities so deposited, and shall, if so requested, execute
documentation substantially in the form above recited representing the ownership
of an aggregate number of those Units.
(b) Under the terms and conditions of the Trust Agreement and this
Indenture and at such times as are permitted by the Trustee, Units may also be
held in certificated form. Unitholders may elect to have their Units held in
certificated form by making a written request to the Trustee requesting such
Certificates; provided, however, that the Trustee is entitled to specify the
minimum denomination of any Certificate issued. The Trustee shall, at the
request of the holder of any Units held in uncertificated form, issue a new
Certificate to evidence such Units and at such time make an appropriate notation
in the regis tration books of the Trustee. The rights set forth in this
Indenture of any holder of Units held in certificated form shall be the same as
those of any other Unitholder. Certificates may be transferred as provided
herein.
Section 2.04. Form of Certificates. Each Certificate referred to in
Section 2.03 is, and each Certificate hereafter issued shall be, in
substantially the form hereinabove recited, numbered serially for
identification, in fully registered form, transferable only on the books of the
Trustee as herein provided, executed manually by an authorized officer of the
Trustee and in facsimile by the President or one of the Vice Presidents of the
Depositor and dated the date of execution and delivery by the Trustee.
ARTICLE III
ADMINISTRATION OF FUND
Section 3.01. Initial Costs. To the extent not borne by the
Depositor the expenses incurred in establishing a Trust shall be borne by such
Trust, including the cost of the initial preparation and typesetting of the
registration statement, prospectuses (including preliminary prospectuses), the
Indenture, and other documents relating to a Trust, printing of Certificates,
Securities and Exchange Commission and state blue sky registration fees, the
costs of the initial valuation of the portfolio and audit of a Trust, the
initial fees and expenses of the Trustee, and legal and other out-of-pocket
expenses related thereto, but not including the expenses incurred in the
printing of prospectuses (including preliminary prospectuses),
-7-
<PAGE>
expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses. To the extent the funds in
the Interest and/or Principal Accounts of the Trust shall be insufficient to pay
the expenses borne by the Trust specified in this Section 3.01, the Trustee
shall advance out of its own funds and cause to be deposited and credited to the
Interest or Principal Accounts such amount as may be required to permit payment
of such expenses. The Trustee shall be reimbursed for such advance in the manner
provided in the related Prospectus; provided, however, that nothing herein shall
be deemed to prevent, and the Trustee shall be entitled to, full reimbursement
for any advances made pursuant to this Section 3.01 no later than the
termination of the Trust.
Section 3.02. Interest Account. The Trustee shall collect the
interest on the Securities as it becomes payable (including all interest accrued
but unpaid prior to the date of deposit of the Securities in trust and including
that part of the proceeds of the sale, liquidation, redemption prepayment or
maturity of any Securities) and credit such interest to a separate account to be
known as the "Interest Account."
Section 3.03. Principal Account. (a) The Securities and all moneys
(except moneys held by the Trustee pursuant to subsection (b) hereof) other than
amounts credited to the Interest Account, received by the Trustee in respect of
the Securities shall be credited to a separate account to be known as the
"Principal Account."
(b) Moneys and/or irrevocable letters of credit required to purchase
Contract Securities or deposited to secure such purchases are hereby declared to
be held specially by the Trustee for such purchases and shall not be deemed to
be part of the Principal Account until (i) the Depositor fails to timely
purchase a Contract Security and has not given the Failed Contract Notice (as
defined in Section 3.14) at which time the moneys and/or letters of credit
attributable to the Contract Security not purchased by the Depositor shall be
credited to the Principal Account; or (ii) the Depositor has given the Trustee
the Failed Contract Notice at which time the moneys and/or letters of credit
attributable to failed contracts referred to in such Notice shall be credited to
the Principal Account; provided, however, that if the Depositor also notifies
the Trustee in the Failed Contract Notice that it has purchased or entered into
a contract to purchase a New Security (as defined in Section 3.14), the Trustee
shall not credit such moneys and/or letters of credit to the Principal Account
unless the New Security shall also have failed or is not delivered by the
Depositor within two business days after the settlement date of such New
Security, in which event the Trustee shall forthwith credit such moneys and/or
letters of credit to the Principal Account. The Trustee shall in any case
forthwith credit to the Principal Account, and/or cause the Depositor to deposit
in the Principal Account, the difference, if any, between the purchase price of
the failed Contract Security and the purchase price of the New Security,
together with any sales charge and accrued interest applicable to such
difference and distribute such moneys to Unitholders pursuant to Section 3.05.
The Trustee shall give prompt written notice to the Depositor and the
Evaluator of all amounts credited to or withdrawn from a Principal Account and
the balance in such Account after giving effect to such credit or withdrawal.
-8-
<PAGE>
Section 3.04. Reserve Account. From time to time the Trustee shall
withdraw from the cash on deposit in an Interest Account or Principal Account
such amounts as it, in its sole discretion, shall deem requisite to establish a
reserve for any applicable taxes or other governmental charges that may be
payable out of the Trust. Such amounts so withdrawn shall be credited to a
separate account which shall be known as the "Reserve Account." The Trustee
shall not be required to distribute to the Unitholders any of the amounts in the
Reserve Account; provided, however, that if it shall, in its sole discretion,
determine that such amounts are no longer necessary for payment of any
applicable taxes or other governmental charges, then it shall promptly deposit
such amounts in the account from which withdrawn or if the Trust shall have
terminated or shall be in the process of termination, the Trustee shall
distribute same in accordance with Section 8.02 (d) and (e) to each Unitholder
such holder's interest in the Reserve Account.
Section 3.05. Deductions and Distributions. (a) The Trustee, as of
the "First Settlement Date," as defined in the Prospectus shall advance from its
own funds and shall pay to the Unitholders then of record the amount of interest
accrued on the Securities deposited in the Trust. The Trustee shall also
advance from its own funds and pay the appropriate persons the amount specified
in the Prospectus, which amount represents interest which accrues on any "when
issued" Securities deposited in the related Trust from the date stated in the
preceding sentence to the respective dates of delivery to the Trust of any of
such Securities. The Trustee shall be entitled to reimbursement, without
interest, for such advancement from interest received by the Trust before any
further distributions shall be made from the Interest Account to Unitholders of
the Trust. Subsequent distributions shall be made as hereinafter provided.
(b) The second distribution of funds from the Interest Account shall be
made on the first Distribution Date after the first Record Date, to all
Unitholders of record as of the first Record Date.
(c) As of the first day of each month of each year commencing the first
Record Date, the Trustee shall:
(1) deduct from the Interest Account or, to the extent funds are not
available in such Account, from the Principal Account and pay to itself
individually the amounts that it is at the time entitled to receive
pursuant to Section 6.04;
(2) deduct from the Interest Account, or, to the extent funds are
not available in such Account, from the Principal Account and pay to the
Evaluator the amount that it is at the time entitled to receive pursuant to
Section 4.03;
(3) deduct from the Interest Account, or to the extent funds are not
available in such Account, from the Principal Account and pay to the
Depositor the amount that it is entitled to receive pursuant to Section
3.15;
(4) deduct from the Interest Account, or, to the extent funds are
not available in such Account, from the Principal Account and pay to
counsel, as hereinafter
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provided for, an amount equal to unpaid fees and expenses, if any, of such
security counsel pursuant to Section 3.09 as certified to by the Depositor;
and
(5) deduct from the Interest Account, or to the extent funds are not
available in such Account, from the Principal Account (as provided in
Section 3.16) and pay to the Depositor that amount it is entitled to
receive pursuant to Section 3.16.
(d) On or shortly after the Distribution Date for each month occurring
subsequent to the first Record Date, the Trustee shall distribute by mail to or
upon the order of each Unitholder of record as of the close of business on the
preceding Record Date at the post office address appearing on the registration
books of the Trustee such Unitholder's pro rata share of the balance of the
Interest Account calculated as of each Record Date on the basis of one-twelfth
of the estimated annual interest income to the related Trust for the ensuing
twelve months, after deduction of the estimated costs and expenses to be
incurred during the twelve month period for which the interest income has been
estimated.
In the event the amount on deposit in the Interest Account is not
sufficient for the payment of the amount of interest to be distributed to
Unitholders on the bases of the aforesaid computations, the Trustee shall
advance its own funds and cause to be deposited in and credited to the Interest
Account such amounts as may be required to permit payment of the monthly
interest distribution to be made as aforesaid and shall be entitled to be
reimbursed, without interest, out of interest received by the related Trust
subsequent to the date of such advance and subject to the condition that any
such reimbursement shall be made only under conditions which will not reduce the
funds in or available for the Interest Account to an amount less than required
for the next ensuing distribution of interest.
Distributions of amounts represented by the cash balance in the Principal
Account shall be computed as of the Record Date of each month occurring
subsequent to the date of the first Record Date. On the Distribution Date of
each month as of which such computation is made, or within a reasonable period
of time thereafter, the Trustee shall distribute by mail to each Unitholder of
record at the close of business on the date of computation (the Record Date) at
his post office address such Unitholder's pro rata share of the cash balance of
the Principal Account as thus computed. The Trustee shall not be required to
make a distribution from the Principal Account unless the cash balance on
deposit therein available for distribution shall be sufficient to distribute at
least $0.01 per Unit.
If the Depositor (i) fails to replace any failed Special Security (as
defined in Section 3.14) or (ii) is unable or fails to enter into any contract
for the purchase of any New Security in accordance with Section 3.14, the
Trustee shall distribute to all Unitholders the principal, accrued interest and
sales charge attributable to such Special Securities at the next monthly
Distribution Date which is more than thirty days after the expiration of the
Purchase Period (as defined in Section 3.14) or at such earlier time or in such
manner as the Trustee in its sole discretion deems to be in the best interest of
the Unitholders.
If any contract for a New Security in replacement of a Special Security
shall fail, the Trustee shall distribute the principal, accrued interest and
sales charge attributable to the
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Special Security to the Unitholders at the next monthly Distribution Date which
is more than thirty days after the date on which the contract in respect of such
New Security failed or at such earlier time or in such earlier manner as the
Trustee in its sole discretion determines to be in the best interest of the
Unitholders.
If, at the end of the Purchase Period, less than all moneys attributable to
a failed Special Security have been applied or allocated by the Trustee pursuant
to a contract to purchase New Securities, the Trustee shall distribute the
remaining moneys to Unitholders at the next monthly distribution date which is
more than thirty days after the end of the Purchase Period or at such earlier
time thereafter as the Trustee in its sole discretion deems to be in the best
interest of the Unitholders.
The amounts to be so distributed to each Unitholder shall be that pro rata
share of the cash balance of the Interest and Principal Accounts, computed as
set forth above, as shall be represented by the Units, whether or not evidenced
by the outstanding Certificate or Certificates, registered in the name of such
Unitholder.
In the computation of each such share, fractions of less than one cent
shall be omitted. After any such distribution provided for above, any cash
balance remaining in an Interest Account or Principal Account shall be held in
the same manner as other amounts subsequently deposited in each of such
accounts, respectively.
For the purpose of distributions as herein provided, the Unitholders of
record on the registration books of the Trustee at the close of business on each
Record Date shall be conclusively entitled to such distribution, and no
liability shall attach to the Trustee by reason of payment to any such
registered Unitholder of record. Nothing herein shall be construed to prevent
the payment of amounts from the Interest Account and the Principal Account to
individual Unitholders by means of one check, draft or other proper instrument,
provided that the appropriate statement of such distribution shall be furnished
therewith as provided in Section 3.06 hereof.
Section 3.06. Distribution Statements. With each distribution from
the Interest or Principal Accounts the Trustee shall set forth, either in the
instrument by means of which payment of such distribution is made or in an
accompanying statement, the amount being distributed from each such account and,
if from the Interest Account, the amount of accrued interest (uncollected and
not available for distribution) on the record date for such distribution, each
expressed as a dollar amount per Unit. Within a reasonable period of time after
the last business day of each calendar year, the Trustee shall furnish to each
person who at any time during such calendar year was a Unitholder a statement
setting forth, with respect to such calendar year:
(A) as to the Interest Account:
(1) the amount of interest received on the Securities,
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(2) the amounts paid for purchases of New Securities pursuant
to Section 3.14 and for redemptions pursuant to Section 5.02,
(3) the deductions for applicable taxes and fees and expenses
of the Trustee and all other Trust expenses, and
(4) the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a dollar
amount per Unit outstanding on the last business day of such calendar
year;
(B) as to the Principal Account:
(1) the dates of the sale, maturity, liquidation, prepayment
or redemption of any of the Securities and the net proceeds received
therefrom, excluding any portion thereof credited to the Interest
Account,
(2) the amount paid for purchases of New Securities pursuant
to Section 3.14 and for redemptions pursuant to Section 5.02,
(3) the deductions for payment of applicable taxes and fees
and expenses of the Trustee and all other Trust expenses, and
(4) the balance remaining after such distributions and
deductions, expressed both as a total dollar amount and as a dollar
amount per Unit outstanding on the last business day of such calendar
year; and
(C) the following information:
(1) a list of the Securities as of the last business day of
such calendar year,
(2) the number of Units outstanding on the last business day
of such calendar year,
(3) the Unit Value based on the last Trust Evaluation made
during such calendar year, and
(4) the amounts actually distributed during such calendar year
from the Interest and Principal Accounts, separately stated, expressed
both as total dollar amounts and as dollar amounts per Unit
outstanding on the record dates for each plan of distribution.
Section 3.07. Extraordinary Sale of Securities. If necessary, in
order to maintain the investment character of the Trust, the Depositor may
direct the Trustee to sell or liquidate Securities at such price and time and in
such manner as shall be determined by the
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Depositor, provided that the Depositor has determined that any one or more of
the following conditions exist:
(a) that there has been a default on such Securities in the payment
of principal or interest, or both, when due and payable;
(b) that any action or proceeding has been instituted in law or
equity seeking to restrain or enjoin the payment of principal or interest
on any such Securities, attacking the constitutionality of any enabling
legislation or alleging and seeking to have judicially determined the
illegality of the issuing body or the constitution of its governing body or
officers, the illegality, irregularity or omission of any necessary acts or
proceedings preliminary to the issuance of such Securities, or seeking to
restrain or enjoin the performance by the officers or employees of any such
issuing body of any improper or illegal act in connection with the
administration of funds necessary for debt service on such Securities or
otherwise; or that there exists any other legal question or impediment
affecting such Securities or the payment of debt service on the same;
(c) that there has occurred any breach of covenant or warranty in
any resolution, ordinance, trust indenture or other document, which would
adversely affect either immediately or contingently the payment of debt
service on such Securities, or their general credit standing, or otherwise
impair the sound investment character of such Securities;
(d) that there has been a default in the payment of principal of or
interest on any other outstanding obligations of an issuer or guarantor of
such Securities;
(e) that the price of any such Securities had declined to such an
extent, or such other market or credit factor exists, so that in the
opinion of the Depositor the retention of such Securities would be
detrimental to the Trust and to the interest of the Unitholders;
(f) that such Securities are the subject of an advanced refunding.
For the purposes of this Section 3.07(g), "an advanced refunding" shall
mean when refunding securities are issued and the proceeds thereof are
deposited in irrevocable trust to retire the Securities on or before their
redemption date;
(g) that as of any Record Date any of the Securities are scheduled
to be redeemed and paid prior to the next succeeding monthly Distribution
Date; provided, however, that as the result of such redemption the Trustee
will receive funds in an amount sufficient to enable the Trustee to include
in the next distribution from the Principal Account at least $0.01 per
Unit;
(h) if the Trust has not elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue Code
of 1986, as amended,
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that the sale of such Securities is required in order to prevent the Trust
from being deemed an association taxable as a corporation for federal
income tax purposes; or
(i) if the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, that such sale is necessary or advisable (i) to maintain the
qualification of the Trust as a regulated investment company or (ii) to
provide funds to make any distribution for a taxable year in order to avoid
imposition of any excise taxes on the Trust.
Upon receipt of such direction from the Depositor, upon which the Trustee
shall rely, the Trustee shall proceed to sell or liquidate the specified
Securities in accordance with such direction; provided, however, that the
Trustee shall not sell or liquidate any Securities upon receipt of a direction
from the Depositor that it has determined that the conditions in subdivision (g)
above exist, unless the Trustee shall receive on account of such sale or
liquidation the full principal amount of such Securities, plus the premium, if
any, and the interest accrued and to accrue thereon to the date of the
redemption of such Securities.
The Trustee shall not be liable or responsible in any way for depreciation
or loss incurred by reason of any sale made pursuant to any such direction or by
reason of the failure of the Depositor to give any such direction, and in the
absence of such direction the Trustee shall have no duty to sell or liquidate
any Securities under this Section 3.07 except to the extent otherwise required
by Section 3.10 of this Indenture.
Section 3.08. Refunding Securities. In the event that an offer shall
be made by an obligor of any of the Securities to issue new obligations in
exchange and substitution for any issue of Securities pursuant to a plan for the
refunding or refinancing of such Securities, the Depositor shall instruct the
Trustee in writing to reject such offer and either to hold or sell such
Securities, except that if (1) the issuer is in default with respect to such
Securities or (2) in the opinion of the Depositor, given in writing to the
Trustee, the issuer will probably default with respect to such Securities in the
reasonably foreseeable future, the Depositor shall instruct the Trustee in
writing to accept or reject such offer or take any other action with respect
thereto as the Depositor may deem proper. Any obligation so received in exchange
shall be deposited hereunder and shall be subject to the terms and conditions of
this Indenture to the same extent as the Securities originally deposited
hereunder. Within five days after such deposit, notice of such exchange and
deposit shall be given by the Trustee to each Unitholder, including an
identification of the Securities eliminated and the securities substituted
therefor.
Section 3.09. Counsel. The Depositor may employ from time to time as
it may deem necessary a firm of attorneys for any legal services that may be
required in connection with the disposition of underlying securities pursuant to
Section 3.07 or the substitution of any securities for underlying securities as
the result of any refunding permitted under Section 3.08. The fees and expenses
of such securities counsel shall be paid by the Trustee from the Interest and
Principal Accounts as provided for in Section 3.05(c)(4) hereof.
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Section 3.10. Notice and Sale by Trustee. If at any time the
principal of or interest on any of the Securities shall be in default and not
paid or provision for payment thereof shall not have been duly made within
thirty days the Trustee shall notify the Depositor thereof. If within thirty
days after such notification the Depositor has not given any instruction to sell
or to hold or has not taken any other action in connection with such Securities,
the Trustee may in its discretion sell such Securities forthwith, and the
Trustee shall not be liable or responsible in any way for depreciation or loss
incurred by reason of such sale.
Section 3.11. Trustee Not Required to Amortize. Nothing in this
Indenture, or otherwise, shall be construed to require the Trustee to make any
adjustments between the Interest and Principal Accounts by reason of any premium
or discount in respect of any of the Securities.
Section 3.12. Liability, Indemnification and Succession of Depositor.
(a) The Depositor shall be under no liability to the Unitholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Indenture or for errors in judgment, but shall be liable only for its own
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder. The Depositor may rely in good faith on any paper, order, notice,
list, affidavit, receipt, opinion, endorsement, assignment, draft or any other
document of any kind prima facie properly executed and submitted to it by the
Trustee, counsel or any other persons pursuant to this Indenture and in
furtherance of its duties.
(b) Each Trust shall pay and hold the Depositor harmless from and against
any loss, liability or expense incurred in acting as Depositor of such Trust
other than by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action which in its
opinion may involve it in any expense or liability; provided, however, that the
Depositor may in its discretion undertake any such action which it may deem
necessary or desirable in respect of this Indenture and the rights and duties of
the parties hereto and the interests of the Unitholders hereunder and, in such
event, the legal expenses and costs of any such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust
concerned and shall be paid directly by the Trustee out of the Interest and
Principal Accounts of such Trust.
(c) The covenants, provisions and agreements herein contained shall in
every case be binding upon any successor to the business of any Depositor. In
the event of an assignment by any Depositor to a successor corporation or
partnership as permitted by the next following sentence, such Depositor and, if
such Depositor is a partnership, its partners shall be relieved of all further
liability under this Indenture. Any Depositor may transfer all or substantially
all of its assets to a corporation or partnership which carries on the business
of such Depositor, if at the time of such transfer such successor duly assumes
all the obligations of such Depositor under this Indenture.
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Section 3.13. Notice to Depositor. In the event that the Trustee
shall have been notified at any time of any action to be taken or proposed to be
taken by holders of the Securities (including but not limited to the making of
any demand, direction, request, giving of any notice, consent or waiver or the
voting with respect to any amendment or supplement to any indenture, resolution,
agreement or other instrument under or pursuant to which the Securities have
been issued), the Trustee shall promptly notify the Depositor and shall
thereupon take such action or refrain from taking any action as the Depositor
shall in writing direct; provided, however, that if the Depositor shall not
within five business days of the giving of such notice to the Depositor direct
the Trustee to take or refrain from taking any action, the Trustee shall take
such action as it, in its sole discretion, shall deem advisable. Neither the
Depositor nor the Trustee shall be liable to any person for any action or
failure to take action with respect to this Section 3.13.
Section 3.14. Limited Replacement of Special Securities; Reinvestment
of Principal. (a) If any contract in respect of Contract Securities other than
a contract to purchase a New Security (as defined below), including those
purchased on a when, as and if issued basis, shall have failed due to any
occurrence, act or event beyond the control of the Depositor or the Trustee
(such failed Contract Securities being herein called the "Special Securities"),
the Depositor shall notify the Trustee (such notice being herein called the
"Failed Contract Notice") of its inability to deliver the failed Special
Security to the Trustee after it is notified in writing that the Special
Security will not be delivered by the seller thereof to the Depositor. Prior
to, or simultaneously with, giving the Trustee the Failed Contract Notice, or
within a maximum of twenty days after giving such Notice (such twenty day period
being herein called the "Purchase Period"), the Depositor shall, if possible,
purchase or enter into the contract, if any, to purchase an obligation to be
held as a Security hereunder (herein called the "New Security") as part of the
Fund in replacement of the failed Special Security, subject to the satisfaction
of all of the following conditions in the case of each purchase or contract to
purchase:
(1) The New Securities (i) shall have a fixed maturity date (whether
or not entitled to the benefits of any sinking, redemption, purchase of
similar fund) substantially similar to, but not exceeding the date of
maturity of the Special Securities they replace, (ii) must be purchased at
a price that results in a current return as of the Date of Deposit at least
equal to that of the Special Securities they replace, (iii) must be
purchased at a price that results in a yield to maturity as of the Initial
Date of Deposit of the Trust at least equal to that of the Special
Securities they replace, (iv) shall be payable as to principal and interest
in United States currency, (v) shall not be "when, as and if issued"
Securities, (vi) shall be securities on which the payment of principal and
interest is backed by the full faith and credit of the United States or by
any agency or instrumentality thereof, (vii) in the case of Trusts
containing Securities issued by the Government National Mortgage
Association, shall be taxable mortgage-backed securities of the modified
pass-through type which maintain as far as practicable the original
percentage relationship between the principal amounts of Securities of
specified interest rates and ranges of maturity in the Trust, (viii) shall
not cause the Units of the Trust to cease to be rated AAA by
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Standard & Poor's if the Units were so rated on the Initial Date of Deposit
and (ix) shall be issued after July 18, 1984.
(2) The purchase price of the New Securities (exclusive of accrued
interest) shall not exceed the principal attributable to the Special
Securities.
(3) The Depositor shall furnish a notice to the Trustee (which may
be part of the Failed Contract Notice) in respect of the New Security
purchased or to be purchased that shall (i) identify the New Securities,
(ii) state that the contract to purchase, if any, entered into by the
Depositor is satisfactory in form and substance, and (iii) state that the
foregoing conditions of clauses (a) and (b) have been satisfied with
respect to the New Securities.
Upon satisfaction of the foregoing conditions with respect to any New
Security, the Depositor shall pay the purchase price for the New Security from
its own resources or, if the Trustee has credited any moneys and/or letters of
credit attributable to the failed Special Security to the Principal Account, the
Trustee shall pay the purchase price of the New Security upon directions from
the Depositor from the moneys and/or letters of credit so credited to the
Principal Account. If the Depositor has paid the purchase price, and, in
addition, the Trustee has credited moneys of the Depositor to the Principal
Account, the Trustee shall forthwith return to the Depositor the portion of such
moneys that is not properly distributable to Unitholders pursuant to Section
3.05.
Whenever a New Security is acquired by the Depositor pursuant to the
provisions of this Section 3.14, the Trustee shall, within five days thereafter,
mail to all Unitholders notices of such acquisition, including an identification
of the failed Special Securities and the New Securities acquired. The purchase
price of the New Securities shall be paid out of the principal attributable to
the failed Special Securities. The Trustee shall not be liable or responsible
in any way for depreciation or loss incurred by reason of any purchase made
pursuant to any such directions and in the absence of such directions the
Trustee shall have no duty to purchase any New Securities under this Indenture.
The Depositor shall not be liable for any failure to instruct the Trustee to
purchase any New Securities or for errors of judgment in respect of this Section
3.14; provided, however, that this provision shall not protect the Depositor
against any liability to which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder.
(b) With respect to any Reinvestment Trust, from the Initial Date of
Deposit until such time as is set forth in the Prospectus for such Trust (the
"Reinvestment Period"), the Trustee shall, as directed by the Depositor, enter
into contracts (which the Depositor shall have approved as satisfactory in form
and substance) to purchase obligations to be held as Securities hereunder as
part of such Trust (the "Reinvestment Securities") and shall pay for the same
with the moneys held in the Principal Account representing the payment or
prepayment of principal on the underlying Securities to the extent that such
proceeds are not required for the purpose of redemption of Units or other
charges to the Principal Account then pending. In giving such direction, the
Depositor shall determine that the Reinvestment
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Securities to be acquired pursuant to such contract satisfy the conditions set
forth above in clauses (a) through (d) and are substantially similar as to
maturity and interest rates as the Securities upon which the principal used to
purchase such Reinvestment Securities was received.
The Trustee may purchase the Reinvestment Securities for deposit in the
Trust directly from market makers in such Securities or may retain the Depositor
or other brokers to purchase the Reinvestment Securities and pay them usual and
customary brokerage commissions for such transactions. Funds remaining in the
Principal Account subsequent to a purchase of Reinvestment Securities will
remain in such Account until such time as they can be invested into additional
Reinvestment Securities. During the Reinvestment Period, amounts in the
Principal Account which the Depositor determines and so notifies the Trustee in
writing or via facsimile, are (a) unable to be invested into Reinvestment
Securities or (b) are required to be distributed for "regulated investment
company" tax purposes shall be distributed on the next semi-annual (June and
December of each year) Distribution Date to Unitholders of record on the related
Record Date.
Upon termination of the Reinvestment Period, amounts that have not been
reinvested which remain in the Principal Account and amounts subsequently
credited to the Principal Account shall be distributed in accordance with
Section 3.05.
Section 3.15. Compensation of Depositor for Supervisory Services. As
compensation for providing supervisory portfolio services under this Indenture,
the Depositor shall receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee in an amount set
forth in the Prospectus, but in no event shall such compensation when combined
with all compensation received from other series of the Fund for providing such
supervisory services in any calendar year exceed the aggregate cost to the
Evaluator for providing such services. Such compensation may, from time to time,
be adjusted provided that the total adjustment upward does not, at the time of
such adjustment, exceed the percentage of the total increase, after the date
hereof, in consumer prices for services as measured by the United States
Department of Labor Consumer Price Index entitled "All Services Less Rent of
Shelter" or similar index, if such index should no longer be published. The
consent or concurrence of any Unitholder hereunder shall not be required for any
such adjustment or increase. Such compensation shall be charged by the Trustee,
upon receipt of invoice therefor from the Evaluator, against the Interest and
Principal Accounts on or before the Distribution Date on which such period
terminates. If the cash balance in the Interest and Principal Accounts shall be
insufficient to provide for amounts payable pursuant to this Section 3.15, the
Trustee shall have the power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02 hereof, or (ii) if no
such Securities have been so designated, such Securities as the Trustee may see
fit to sell in its own discretion, and to apply the proceeds of any such sale in
payment of the amounts payable pursuant to this Section 3.15. Any moneys payable
to the Evaluator pursuant to this Section 3.15 shall be secured by a prior lien
on the Trust except that no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 6.04.
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Section 3.16. Deferred Sales Charge. If the Prospectus related to a
Trust specifies a deferred sales charge, the Trustee shall, on the dates
specified and as provided in such Prospectus, withdraw from the Interest Account
or Principal Account (as specified in the such Prospectus), an amount per Unit
specified in such Prospectus and credit such amount to a special non-Trust
account designated by the Depositor out of which the deferred sales charge will
be distributed to the Depositor (the "Deferred Sales Charge Account"). If the
balance in the applicable Account is insufficient to make such withdrawal, the
Trustee shall, as directed by the Depositor, advance funds in an amount required
to fund the proposed withdrawal and be entitled to reimbursement of such advance
upon the deposit of additional moneys in the applicable Account, and/or sell
Securities and credit the proceeds thereof to the Deferred Sales Charge Account.
Such direction shall, if the Trustee is directed to sell a Security, identify
the Security to be sold and include instructions as to the execution of such
sale. If a Unitholder redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related Prospectus, on the
Redemption Date, withhold from the Redemption Price payable to such Unitholder
an amount equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account. If pursuant to
Section 5.02 hereof, the Depositor shall purchase a Unit tendered for redemption
prior to the payment in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unitholder the amount specified under
Section 5.02 less the unpaid portion of the deferred sales charge. All advances
made by the Trustee pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unitholders.
ARTICLE IV
EVALUATION OF SECURITIES; EVALUATOR
Section 4.01. Evaluation of Securities. The Evaluator shall determine
separately and promptly furnish to the Trustee and the Depositor upon request
the value of each issue of Securities (treating separate maturities of
Securities as separate issues) as of the Evaluation Time on days of trading on
the New York Stock Exchange on the bid side of the market on the days on which
an evaluation of the Trust is required by Section 5.01 and, in addition, as of
the Evaluation Time on days of trading on the New York Stock Exchange on the bid
side of the market if a secondary market for the Units is maintained, such
additional evaluation being made on any day desired by the Trustee or deemed
necessary by the Depositor. Such evaluations shall be made (i) on the basis of
current bid prices for the Securities, (ii) if bids are not available for the
Securities, on the basis of current bid prices for comparable securities, (iii)
by causing the value of the Securities to be determined by others engaged in the
practice of evaluation, quoting or appraising comparable securities, or (iv) by
any combination of the above. For each evaluation, the Evaluator shall also
determine and furnish to the Trustee and the Depositor the aggregate of (a) the
value of all Securities on the basis of such evaluation and (b) on the basis of
the information furnished to the Evaluator by the Trustee pursuant to Section
3.03, the amount of cash then held in the Principal Account which was received
by the Trustee after the Record Date preceding such determination less any
amounts held in the Principal Account for distribution to Unitholders on a
subsequent Distribution Date when a Record Date occurs four business days or
less
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after such determination. For the purposes of the foregoing, the Evaluator
may obtain current bid prices for the Securities from investment dealers or
brokers (including the Depositor) that customarily deal in securities comparable
to those held by the Trust.
Section 4.02. Information for Unitholders. For the purpose of
permitting Unitholders to satisfy any reporting requirements of applicable
federal or state tax law, the Evaluator shall make available to the Trustee and
the Trustee shall transmit to any Unitholder upon request any determinations
made by it pursuant to Section 4.01.
Section 4.03. Compensation of Evaluator. As compensation for its
services hereunder, the Evaluator shall receive against a statement therefor
submitted to the Trustee, an annual fee as set forth in the Prospectus computed
on the basis described in such Prospectus. Such compensation may, from time to
time, be adjusted provided that the total adjustment upward does not, at the
time of such adjustment, exceed the percentage of the total increase, after the
date hereof, in consumer prices for services as measured by the United States
Department of Labor Consumer Price Index entitled "All Services Less Rent" or
similar index, if such index shall no longer be published. The consent or
concurrence of any Unitholder hereunder shall not be required for any such
adjustment or increase. Such compensation shall be charged by the Trustee, upon
receipt of invoice therefor from the Evaluator, against the Interest and
Principal Accounts on or before the Distribution Date on which such period
terminates. If the cash balances in the Interest and Principal Accounts shall be
insufficient to provide for amounts payable pursuant to this Section 4.03, the
Trustee shall have the power to sell (i) Securities designated to be sold
pursuant to Section 5.02 hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to sell in its own
discretion, and to apply the proceeds of any such sale in payment of the amounts
payable pursuant to this Section 4.03. Any moneys payable to the Evaluator
pursuant to this Section 4.03 shall be secured by a prior lien on the Trust
except that no such lien shall be prior to any lien in favor of the Trustee
under the provisions of Section 6.04.
Section 4.04. Liability of Evaluator. The Trustee, the Depositor (if
other than the Evaluator) and the Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. The determinations made by the Evaluator hereunder shall be made in
good faith upon the basis of the best information available to it. The Evaluator
shall be under no liability to the Trustee, the Depositor (if other than the
Evaluator) or the Unitholders for errors in judgment; provided, however, that
this provision shall not protect the Evaluator against any liability to which it
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
Section 4.05. Resignation and Removal of Evaluator; Successor. (a) The
Evaluator may resign and be discharged hereunder, by executing an instrument in
writing resigning as Evaluator and filing the same with the Depositor (if other
than the Evaluator) and the Trustee, not less than 60 days before the date
specified in such instrument when, subject to Section 4.05(e), such resignation
is to take effect. Upon receiving such notice of
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resignation, the Depositor (if other than the Evaluator) and the Trustee shall
use their best efforts to appoint a successor evaluator having qualifications
and at a rate of compensation satisfactory to the Depositor and the Trustee.
Such appointment shall be made by written instrument executed by the Depositor
and Trustee, in duplicate, one copy of which shall be delivered to the resigning
Evaluator and one copy to the successor evaluator. The Depositor (if other than
the Evaluator) or the Trustee may remove the Evaluator at any time upon 30 days'
written notice and appoint a successor evaluator having qualifications and at a
rate of compensation satisfactory to the Depositor (if other than the Evaluator)
and the Trustee. Such appointment shall be made by written instrument executed
by the Depositor and the Trustee, in duplicate, one copy of which shall be
delivered to the Evaluator so removed and one copy to the successor evaluator.
Notice of such resignation or removal and appointment of a successor evaluator
shall be mailed by the Trustee to each Unitholder then of record.
(b) Any successor evaluator appointed hereunder shall execute,
acknowledge and deliver to the Depositor and the Trustee an instrument accepting
such appointment hereunder, and such successor evaluator without any further
act, deed or conveyance shall become vested with all the rights, powers, duties
and obligations of its predecessor hereunder with like effect as if originally
named Evaluator herein and shall be bound by all the terms and conditions of
this Indenture.
(c) In case at any time the Evaluator shall resign and no successor
evaluator shall have been appointed and have accepted appointment within 30 days
after notice of resignation has been received by the Depositor (if other than
the Evaluator) and the Trustee, the Evaluator may forthwith apply to a court of
competent jurisdiction for the appointment of a successor evaluator. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor evaluator.
(d) Any corporation into which the Evaluator hereunder may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Evaluator hereunder shall be a party, shall be the
successor evaluator under this Indenture without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
anything herein, or in any agreement relating to such merger or consolidation,
by which the Evaluator may seek to retain certain powers, rights and privileges
theretofore obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
(e) Any resignation or removal of the Evaluator and appointment of a
successor evaluator pursuant to this Section shall become effective upon
acceptance of appointment by the successor evaluator as provided in subsection
(b) hereof.
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ARTICLE V
EVALUATION, REDEMPTION, PURCHASE, TRANSFER, INTERCHANGE
OR REPLACEMENT OF UNITS
Section 5.01. Evaluation. The Trustee shall make an evaluation of each
Trust as of the Evaluation Time on days of trading on the New York Stock
Exchange (i) on the day on which any Unit is tendered for redemption and (ii) on
any other day desired by the Trustee or requested by the Depositor. Such
evaluations shall take into account and itemize separately (1) the cash on hand
in the Trust (other than cash declared held in trust to cover contracts to
purchase securities) or moneys in the process of being collected from matured
interest coupons or securities matured, prepaid or called for redemption prior
to maturity, (2) the value of each issue of the Securities in the Trust as last
determined by the Evaluator pursuant to Section 4.01 and (3) interest accrued
thereon not subject to collection and distribution. For each such evaluation
there shall be deducted from the sum of the above (i) amounts representing any
applicable taxes or governmental charges payable out of the Trust and for which
no deductions shall have previously been made for the purpose of addition to the
Reserve Account, (ii) amounts representing accrued expenses of the Trust
including but not limited to unpaid fees and expenses of the Trustee, the
Evaluator, the Depositor and counsel, in each case as reported by the Trustee to
the Depositor on or prior to the date of evaluation, and (iii) cash held for
distribution to Unitholders of record as of a date prior to the evaluation then
being made. The value of the pro rata share of each Unit determined on the basis
of any such evaluation shall be referred to herein as the "Unit Value." The
Trustee shall make an evaluation of the Securities deposited in a Trust as of
the time said Securities are deposited under this Indenture. Such evaluation
shall be made on the same basis as set forth in Section 4.01, except that it
shall be based upon the offering prices of the Securities. The Trustee, in lieu
of making the evaluation required hereby, may use an evaluation prepared by the
Evaluator and/or by any other recognized evaluator including Cantor Fitzgerald &
Co. and in so doing shall not be liable or responsible, under any circumstances
whatever, for the accuracy or correctness thereof, or for any error or omission
therein. The Trustee's determination of the offering price of the Securities on
the date of deposit determined as herein provided shall be included in Schedule
A attached to the Trust Agreement.
Section 5.02. Redemptions by Trustee; Purchases by Depositor. Any Unit
tendered for redemption by a Unitholder or his duly authorized attorney to the
Trustee at its Unit Investment Trust division office shall be redeemed by the
Trustee on the third Business Day following the day on which tender for
redemption is made (being herein called the "Redemption Date"). Subject to
payment by such Unitholder of any tax or other governmental charges which may be
imposed thereon, such redemption is to be made by payment on the Redemption Date
of cash equivalent to the Unit Value, determined by the Trustee as of the
Evaluation Time on the date of tender; provided that accrued interest is paid to
the Redemption Date, multiplied by the number of Units tendered (herein called
the "Redemption Price"). Units received for redemption by the Trustee on any day
after the Evaluation Time on days of trading on the New York Stock Exchange will
be held by the Trustee until the next day on which the New York Stock Exchange
is open for trading and
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will be deemed to have been tendered on such day for redemption at the
Redemption Price computed on that day. Units held in certificated form will be
deemed to be "tendered" to the Trustee when the Trustee is in physical receipt
of the Certificate or Certificates representing such Units in the form and with
such documentation as is required to accomplish transfers of Units pursuant to
Section 5.03 hereof.
The Trustee may in its discretion, and shall when so directed by the
Depositor, suspend the right of redemption or postpone the date of payment of
the Redemption Price for more than three Business Days following the day on
which tender for redemption is made (1) for any period during which the New York
Stock Exchange is closed other than customary weekend and holiday closings or
during which trading on the New York Stock Exchange is restricted; (2) for any
period during which an emergency exists as a result of which disposal by the
Trust of the Securities is not reasonably practicable or it is not reasonably
practicable fairly to determine in accordance herewith the value of the
Securities; or (3) for such other period as the Securities and Exchange
Commission may by order permit, and shall not be liable to any person or in any
way for any loss or damage which may result from any such suspension or
postponement.
Not later than the close of business on the day of tender of a Unit or
Units for redemption by a Unitholder other than the Depositor, the Trustee shall
notify the Depositor of such tender. The Depositor shall have the right to
purchase such Unit or Units by notifying the Trustee of its election to make
such purchase as soon as practicable thereafter but in no event subsequent to
the close of business on the second business day after the day on which such
Unit or Units were tendered for redemption. Such purchase shall be made by
payment for such Unit or Units by the Depositor to the Unitholder not later than
the close of business on the Redemption Date of an amount not less than the
Redemption Price which would otherwise be payable by the Trustee to such
Unitholder.
Any Unit or Units so purchased by the Depositor may at the option of the
Depositor be tendered to the Trustee for redemption at the corporate trust
office of the Trustee in the manner provided in the first paragraph of this
Section 5.02.
If the Depositor does not elect to purchase any Unit or Units tendered to
the Trustee for redemption, or if a Unit or Units are being tendered by the
Depositor for redemption, that portion of the Redemption Price which represents
interest shall be withdrawn from the Interest Account to the extent available.
The balance paid on any redemption, including accrued interest, if any, shall be
withdrawn from the Principal Account to the extent that funds are available for
such purpose. If such available balance shall be insufficient, the Trustee shall
sell such of the Securities, currently designated for such purposes by the
Evaluator, as the Trustee in its sole discretion shall deem necessary. In the
event that funds are withdrawn from the Principal Account for payment of accrued
interest, the Principal Account shall be reimbursed for such funds so withdrawn
when sufficient funds are next available in the Interest Account.
The Evaluator shall maintain with the Trustee a current list of Securities
held in the Trust designated to be sold for the purpose of redemption of Units
tendered for redemption
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and not purchased by the Depositor, and for payment of expenses hereunder,
provided that if the Evaluator shall for any reason fail to maintain such a
list, the Trustee, in its sole discretion, may designate a current list of
Securities for such purposes. The net proceeds of any sales of Securities from
such list representing principal shall be credited to the Principal Account of
the Trust and the proceeds of such sales representing accrued interest shall be
credited to the Interest Account of the Trust.
Neither the Depositor nor the Trustee shall not be liable or responsible in
any way for depreciation or loss incurred by reason of any sale of Securities
made pursuant to this Section 5.02. Certificates evidencing Units redeemed
pursuant to this Section 5.02 shall be canceled by the Trustee and the Unit or
Units evidenced by such Certificates shall be terminated by such redemptions.
Section 5.03. Transfer or Interchange of Units. (a) Certificates
representing Units held by a Unitholder will not be issued except upon written
request by a Unitholder, or his or her registered broker/dealer, to the Trustee
at its Unit Investment Trust Division office. Certificates that have been issued
may be returned to the Trustee at any time and canceled, without affecting the
Unitholder's interest in the Trust, when accompanied by proper written
instructions from the Unitholder.
(b) A Unitholder may transfer any of his Units by making a written
request to the Trustee at its principal trust office and, in the case of Units
evidenced by a Certificate, by presenting and surrendering such Certificate at
such office properly endorsed or accompanied by a written instrument or
instruments of transfer in form satisfactory to the Trustee. Unitholders must
sign such written request, and such Certificate of transfer instrument, exactly
as their name appears on the records of the Trustee and on any Certificate
representing the Units to be transferred. Such signature must be guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("STAMP") or
such other signature guarantee program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. Such transfer shall thereupon be made
on the records of the Trustee and, if appropriate, a new registered Certificate
or Certificates for the same number of Units of the same Trust shall be issued
in exchange and substitution therefor. Certificates issued pursuant to this
Agreement are interchangeable for one or more other Certificates of the same
Trust in an equal aggregate number of Units and all Certificates issued shall be
issued in denominations of one Unit or any whole multiple thereof as may be
requested by the Unitholder. The Trustee may deem and treat the person in whose
name any Unit or Certificate shall be registered upon the books of the Trustee
as the owner of such Unit or Certificate for all purposes hereunder and the
Trustee shall not be affected by any notice to the contrary. The transfer books
maintained by the Trustee for each Trust for the purpose of this Section 5.03
shall be closed for an individual Trust as such Trust is terminated pursuant to
Article VIII hereof.
A sum sufficient to pay any tax or other charge that may be imposed in
connection with any such transfer or interchange shall be paid by the Unitholder
to the Trustee. The Trustee may require a Unitholder to pay a reasonable fee
which the Trustee in its sole
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discretion shall determine for each new Certificate issued on any such transfer
or interchange.
All Certificates canceled pursuant to this Indenture shall be disposed of
by the Trustee without liability on its part.
Section 5.04. Certificates Mutilated, Destroyed, Stolen or Lost. In
case any Certificate shall become mutilated or be destroyed, stolen or lost, the
Trustee shall execute and deliver a new Certificate in exchange and substitution
therefor upon the holder's furnishing the Trustee with proper identification and
satisfactory indemnity, complying with such other reasonable regulations and
conditions as the Trustee may prescribe and paying such expenses as the Trustee
may incur. Any mutilated Certificate shall be duly surrendered and canceled
before any new Certificate shall be issued in exchange and substitution
therefor. Upon the issuance of any new Certificate a sum sufficient to pay any
tax or other governmental charge and the fees and expenses of the Trustee may be
imposed. Any such new Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. In the event the Trust has terminated or is in the
process of termination, the Trustee may, instead of issuing a new Certificate in
exchange and substitution for any Certificate which shall have become mutilated
or shall have been destroyed, stolen or lost, make the distributions in respect
of such mutilated, destroyed, stolen or lost Certificate (without surrender
thereof except in the case of a mutilated Certificate) as provided in Section
8.02 hereof if the Trustee is furnished with such security or indemnity as it
may require to save it harmless, and in the case of destruction, loss or theft
of a Certificate, evidence to the satisfaction of the Trustee of the
destruction, loss or theft of such Certificate and of the ownership thereof.
ARTICLE VI
TRUSTEE
Section 6.01. General Definition of Trustee's Liabilities, Rights and
Duties. The Trustee shall in its discretion undertake such action as it may deem
necessary at any and all times to protect the Trust and the rights and interests
of the Unitholders pursuant to the terms of this Indenture, provided, however,
that the expenses and costs of such actions, undertakings or proceedings shall
be reimbursable to the Trustee from the Interest and Principal Accounts, and the
payment of such costs and expenses shall be secured by a prior lien on the
Trust.
In addition to and notwithstanding the other duties, rights, privileges and
liabilities of the Trustee as otherwise set forth the liabilities of the Trustee
are further defined as follows:
(a) all moneys deposited with or received by the Trustee hereunder
shall be held by it without interest in trust as part of the Trust or the
Reserve Account until required to be disbursed in accordance with the
provisions of this Indenture and such moneys will be segregated by separate
recordation on the trust ledger of the Trustee
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so long as such practice preserves a valid preference under applicable law,
or if such preference is not so preserved the Trustee shall handle such
moneys in such other manner as shall constitute the segregation and holding
thereof in trust within the meaning of the Investment Company Act of 1940;
(b) the Trustee shall be under no liability for any action taken in
good faith on any appraisal, paper, order, list, demand, request, consent,
affidavit, notice, opinion, direction, evaluation, endorsement, assignment,
resolution, draft or other document whether or not of the same kind prima
facie properly executed, or for the disposition of moneys, Securities or
certificates pursuant to this Indenture, or in respect of any evaluation
which it is required to make or is required or permitted to have made by
others under this Indenture or otherwise, except by reason of its own
negligence, lack of good faith or willful misconduct, provided that the
Trustee shall not in any event be liable or responsible for any evaluation
made by the Evaluator. The Trustee may construe any of the provisions of
this Indenture, insofar as the same may appear to be ambiguous or
inconsistent with any other provisions hereof, and any construction of any
such provisions hereof by the Trustee in good faith shall be binding upon
the parties hereto;
(c) the Trustee shall not be responsible for or in respect of the
recitals herein, the validity or sufficiency of this Indenture or for the
due execution hereof by the Depositor, or for the form, character,
genuineness, sufficiency, value or validity of any Securities (except that
the Trustee shall be responsible for the exercise of due care in
determining the genuineness of Securities delivered to it pursuant to
contracts for the purchase of such Securities) or for or in respect of the
validity or sufficiency of the Certificates (except for the due execution
thereof by the Trustee) or of the due execution thereof by the Depositor
and the Trustee shall in no event assume or incur any liability, duty, or
obligation to any Unitholder or the Depositor other than as expressly
provided for herein. The Trustee shall not be responsible for or in respect
of the validity of any signature by or on behalf of the Depositor;
(d) the Trustee shall not be under any obligation to appear in,
prosecute or defend any action, which in its opinion may involve it in
expense or liability, unless as often as required by the Trustee, it shall
be furnished with reasonable security and indemnity against such expense or
liability, and any pecuniary cost of the Trustee from such actions shall be
deductible from and a charge against the Interest and Principal Accounts;
(e) the Trustee may employ agents, attorneys, accountants and
auditors and shall not be answerable for the default or misconduct of any
such agents, attorneys, accountants or auditors if such agents, attorneys,
accountants or auditors shall have been selected with reasonable care. The
Trustee shall be fully protected in respect of any action under this
Indenture taken, or suffered, in good faith by the Trustee, in accordance
with the opinion of its counsel. The fees and expenses charged by such
agents, attorneys, accountants or auditors shall constitute an expense of
the Trustee
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reimbursable from the Interest and Principal Accounts as set forth in
Section 6.04 hereof;
(f) if at any time the Depositor shall fail to undertake or perform
any of the duties which by the terms of this Indenture are required by it
to be undertaken or performed, or such Depositor shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a receiver of such
Depositor or of its property shall be appointed, or any public officer
shall take charge or control of such Depositor or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then in any such case, the Trustee may: (1) appoint a successor depositor
who shall act hereunder in all respects in place of such Depositor which
successor shall be satisfactory to the Trustee, and which may be
compensated at rates deemed by the Trustee to be reasonable under the
circumstances, by deduction from the Interest Account or, to the extent
funds are not available in such Account, from the Principal Account but no
such deduction shall be made exceeding such reasonable amount as the
Securities and Exchange Commission may prescribe in accordance with Section
26(a)(2)(C) of the Investment Company Act of 1940, or (2) terminate this
Indenture and the trust created hereby and liquidate the Trust in the
manner provided in Section 8.02;
(g) if (i) the value of the Trust as shown by any evaluation by the
Trustee pursuant to Section 5.0l hereof shall be less than 20% of the
aggregate principal amount of Securities initially deposited in the Trust
or (ii) by reason of the aggregate redemption of Units by the Depositor
and/or one or more underwriters not theretofore sold constituting more than
60% of the number of Units initially authorized and the net worth of the
Trust is reduced to less than 40% of the aggregate principal amount of
Securities initially deposited in the Trust, the Trustee may in its
discretion, and shall when so directed by the Depositor, terminate this
Indenture and the trust created hereby and liquidate the Trust, all in the
manner provided in Section 8.02;
(h) in no event shall the Trustee be liable for any taxes or other
governmental charges imposed upon or in respect of the Securities or upon
the interest thereon or upon it as Trustee hereunder or upon or in respect
of the Trust which it 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 the premises. For all such taxes and charges and for any
expenses, including counsel fees, which the Trustee may sustain or incur
with respect to such taxes or charges, the Trustee shall be reimbursed and
indemnified out of the Interest and Principal Accounts of the Trust, and
the payment of such amounts so paid by the Trustee shall be secured by a
prior lien on the Trust;
(i) except as provided in Sections 3.01 and 3.05, no payment to a
Depositor or to any principal underwriter (as defined in the Investment
Company Act of 1940) for the Trust or to any affiliated person (as so
defined) or agent of a Depositor or such underwriter shall be allowed the
Trustee as an expense except for payment of
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such reasonable amounts as the Securities and Exchange Commission may
prescribe as compensation for performing bookkeeping and other
administrative services of a character normally performed by the Trustee;
and
(j) the Trustee except by reason of its own negligence or willful
misconduct shall not be liable for any action taken or suffered to be taken
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
Section 6.02. Books, Records and Reports. The Trustee shall keep
proper books of record and account of all the transactions of each Trust under
this Indenture at its corporate trust office including a record of the name and
address of, and the Certificates issued by each Trust and held by, every
Unitholder, and such books and records of each Trust shall be open to inspection
by any Unitholder of such Trust at all reasonable times during the usual
business hours. The Trustee shall cause, at Trust expense, audited statements as
to the assets and income of each Trust to be prepared on an annual basis by
independent public accountants selected by the Depositor, provided, however, if
the cost to a Trust for preparation of such statements shall exceed an amount
equivalent to $.50 per Unit on an annual basis, then the Trustee shall not be
required to have such statements prepared. Any such report shall be provided to
a Unitholder upon request.
To the extent permitted under the Investment Company Act of 1940 as
evidenced by an opinion of independent counsel to the Depositor, the Trustee
shall pay, or reimburse to the Depositor or others, the costs of the preparation
of documents and information with respect to a Trust required by law or
regulation in connection with the maintenance of a secondary market in Units of
such Trust. Such costs may include but are not limited to accounting and legal
fees, blue sky registration and filing fees, printing expenses and other
reasonable expenses related to documents required under Federal and state
securities law. Such costs shall be a Trust expense and the Trustee shall not be
obligated to advance any of its own funds to make such payments.
The Trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute or rule or
regulation thereunder.
Section 6.03. Indenture and List of Securities on File. The Trustee
shall keep a certified copy or duplicate original of this Indenture on file at
its unit investment trust division office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities.
Section 6.04. Compensation. For services performed under this
Indenture the Trustee shall be paid an amount as set forth in the Prospectus
computed on the basis described in such Prospectus. The Trustee may from time to
time adjust its compensation as set forth above provided that total adjustment
upward does not, at the time of such adjustment, exceed the percentage of the
total increase, after the date hereof, in consumer prices for services as
measured by the United States Department of Labor Consumer Price Index entitled
"All Services Less Rent of Shelter" or similar index, if such index should no
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longer be published. The consent or concurrence of any Unitholder hereunder
shall not be required for any such adjustment or increase. Such compensation
shall be charged by the Trustee against the Interest and Principal Accounts on
or before the Distribution Date on which such period terminates; provided,
however, that such compensation shall be deemed to provide only for the usual,
normal and proper functions undertaken as Trustee pursuant to this Indenture.
The Trustee shall charge the Interest and Principal Accounts for any and all
expenses and disbursements incurred hereunder, including legal and auditing
expenses, and for any extraordinary services performed by the Trustee hereunder.
The Trustee shall be indemnified and held harmless against any loss or
liability accruing to it without negligence, bad faith or willful misconduct on
its part, arising out of or in connection with the acceptance or administration
of the trust, including the costs and expenses (including counsel fees) of
defending itself against any claim of liability in the premises. If the cash
balances in the Interest and Principal Accounts shall be insufficient to provide
for amounts payable pursuant to this Section 6.04, the Trustee shall have the
power to sell (i) Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so designated, such Securities
as the Trustee may see fit to sell in its own discretion, and to apply the
proceeds of any such sale in payment of the amounts payable pursuant to this
Section 6.04.
The Trustee shall not be liable or responsible in any way for depreciation
or loss incurred by reason of any sale of Securities made pursuant to this
Section 6.04. Any moneys payable to the Trustee pursuant to this Section shall
be secured by a prior lien on the Trust.
Section 6.05. Removal and Resignation of Trustee; Successor. The
following provisions shall provide for the removal and resignation of the
Trustee and the appointment of any successor trustee:
(a) the Trustee or any trustee or trustees hereafter appointed may
resign and be discharged of the Trust created by this Indenture, by
executing an instrument in writing resigning as Trustee of the Trust and
filing same with the Depositor and mailing a copy of a notice of
resignation to all Unitholders then of record, not less than sixty days
before the date specified in such instrument when, subject to Section
6.05(e), such resignation is to take effect. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee as
hereinafter provided, by written instrument, in duplicate, one copy of
which shall be delivered to the resigning Trustee and one copy to the
successor trustee. The Depositor may at any time remove the Trustee, with
or without cause, and appoint a successor trustee by written instrument, in
duplicate, one copy of which shall be delivered to the Trustee so removed
and one copy to the successor trustee. Notice of such resignation or
removal of a trustee and appointment of a successor trustee shall be mailed
by the successor trustee, promptly after its acceptance of such
appointment, to each Unitholder then of record;
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(b) any successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor and to the retiring Trustee an
instrument accepting such appointment hereunder, and such successor trustee
without any further act, deed or conveyance shall become vested with all
the rights, powers, duties and obligations of its predecessor hereunder
with like effect as if originally named Trustee herein and shall be bound
by all the terms and conditions of this Indenture. Upon the request of such
successor trustee, the Depositor and the retiring Trustee shall, upon
payment of any amounts due the retiring Trustee, or provision therefor to
the satisfaction of such retiring Trustee, execute and deliver an
instrument acknowledged by it transferring to such successor trustee all
the rights and powers of the retiring Trustee; and the retiring Trustee
shall transfer, deliver and pay over to the successor trustee all
Securities and moneys at the time held by it hereunder, together with all
necessary instruments of transfer and assignment or other documents
properly executed necessary to effect such transfer and such of the records
or copies thereof maintained by the retir ing Trustee in the administration
hereof as may be requested by the successor trustee, and shall thereupon be
discharged from all duties and responsibilities under this Indenture;
(c) in case at any time the Trustee shall resign and no successor
trustee shall have been appointed and have accepted appointment within
thirty days after notice of resignation has been received by the Depositor,
the retiring Trustee may forthwith apply to a court of competent
jurisdiction for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee;
(d) any entity into which any trustee hereunder may be merged or
with which it may be consolidated, or any entity resulting from any merger
or consolidation to which any trustee hereunder shall be a party, shall be
the successor trustee under this Indenture without the execution or filing
of any paper, instrument or further act to be done on the part of the
parties hereto, anything herein, or in any agreement relating to such
merger or consolidation, by which any such trustee may seek to retain
certain powers, rights and privileges theretofore obtaining for any period
of time following such merger or consolidation, to the contrary
notwithstanding; and
(e) any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in
subsection (b) hereof.
Section 6.06. Qualifications of Trustee. The Trustee shall be a
corporation organized and doing business under the laws of the United States or
any state thereof, which is authorized under such laws to exercise corporate
trust powers and having at all times an aggregate capital, surplus, and
undivided profits of not less than $5,000,000.
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<PAGE>
ARTICLE VII
RIGHTS OF UNITHOLDERS
Section 7.01. Beneficiaries of Trust. By the purchase and acceptance
or other lawful delivery and acceptance of any Unit the Unitholder shall be
deemed to be a beneficiary of the Trust created by this Indenture and vested
with all right, title and interest in the Trust to the extent of the Unit or
Units, subject to the terms and conditions of this Indenture.
Section 7.02. Rights, Terms and Conditions. In addition to the other
rights and powers set forth in the other provisions and conditions of this
Indenture the Unitholders shall have the following rights and powers and shall
be subject to the following terms and conditions:
(a) a Unitholder may at any time tender his Unit or Units to the
Trustee for redemption in accordance with Section 5.02;
(b) the death or incapacity of any Unitholder shall not operate to
terminate this Indenture or the Trust, nor entitle his legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court of competent jurisdiction for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them. Each Unitholder expressly
waives any right he may have under any rule of law, or the provisions of
any statute, or otherwise, to require the Trustee at any time to account,
in any manner other than as expressly provided in this Indenture, in
respect of the Securities or moneys from time to time received, held and
applied by the Trustee hereunder; and
(c) no Unitholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust, or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of any Certificates, be construed so as to
constitute the Unitholders from time to time as partners or members of an
association; nor shall any Unitholder ever be under any liability to any
third persons by reason of any action taken by the parties to this
Indenture, or any other cause whatsoever.
ARTICLE VIII
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
Section 8.01. Amendments. (a) This Indenture may be amended from time
to time by the parties hereto or their respective successors, without the
consent of any of the Unitholders, (i) to cure any ambiguity or to correct or
supplement any provision contained hereon which may be defective or inconsistent
with any other provision contained herein; or (ii) to make such other provision
in regard to matters or questions arising hereunder as shall not adversely
affect the interests of the Unitholders; provided, however, that the parties
hereto may not amend this Indenture so as to (1) increase the number of Units
issuable
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<PAGE>
hereunder above the maximum number set forth in Section 2.03 of this Indenture
except as provided in Section 5.04 hereof or such lesser amount as may be
outstanding at any time during the term of this Indenture or (2) permit, subject
to Sections 3.08 and 3.14 hereof, the deposit or acquisition hereunder of
interest-bearing obligations or other securities either in addition to or in
substitution for any of the Securities.
(b) Except for the amendments, changes or modifications as provided in
Section 8.01(a) hereof, neither the parties hereto nor their respective
successors shall consent to any other amendment, change or modification of this
Indenture without the giving of notice and the obtaining of the approval or
consent of Unitholders representing at least 66-2/3% of the Units then
outstanding of the affected Trust. Nothing contained in this Section 8.01(b)
shall permit, or be construed as permitting, a reduction of the aggregate
percentage of Units the holders of which are required to consent to any
amendment, change or modification of this Indenture without the consent of the
Unitholders of all of the Units then outstanding of the affected Trust and in no
event may any amendment be made which would (1) alter the rights to the
Unitholders as against each other, (2) provide the Trustee with the power to
engage in business or investment activities other than as specifically provided
in this Indenture or (3) adversely affect the characterization of the Trust for
federal income tax purposes.
(c) Promptly after the execution of any such amendment the Trustee shall
furnish written notification to all then outstanding Unitholders of the
substance of such amendment.
Section 8.02. Termination. This Indenture and the Trust created hereby
shall terminate upon the maturity, redemption, sale or other disposition as the
case may be of the last Security held hereunder unless sooner terminated as
hereinbefore specified and may be terminated at any time by the written consent
of Unitholders representing 66-2/3% of the then outstanding Units thereof;
provided, that in no event shall this trust continue beyond the end of the
calendar year preceding the fiftieth anniversary of the execution of this
Indenture (the "Mandatory Termination Date"); and provided further that in
connection with any such liquidation it shall not be necessary for the Trustee
to dispose of any Security or Securities if reten tion of such Security or
Securities, until due, shall be deemed to be in the best interests of
Unitholders, including, but not limited to, situations in which a Security or
Securities mature after the Mandatory Termination Date.
Written notice of any termination, specifying the time or times at which
the Unitholders may surrender any Certificates for cancellation shall be given
by the Trustee to each such Unitholder at his address appearing on the
registration books of the Trustee. Within a reasonable period of time after such
termination the Trustee shall fully liquidate the Securities then held, if any,
and shall:
(a) deduct from the Interest Account or, to the extent that funds
are not available in such Account, from the Principal Account and pay to
itself individually an amount equal to the sum of (1) its accrued
compensation for its ordinary recurring services, (2) any compensation due
it for its extraordinary services and (3) any costs, expenses or
indemnities as provided herein;
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<PAGE>
(b) deduct from the Interest Account or, to the extent that funds
are not available in such Account, from the Principal Account and pay
accrued and unpaid fees of the Evaluator, Depositor and counsel, if any;
(c) deduct from the Interest Account or the Principal Account any
amounts which may be required to be deposited in the Reserve Account to
provide for payment of any applicable taxes or other governmental charges
and any other amounts which may be required to meet expenses incurred under
this Indenture;
(d) distribute to each Unitholder such Unitholder's pro rata share
of the balance of the Interest Account;
(e) distribute to each Unitholder such Unitholder's pro rata share
of the balance of the Principal Account; and
(f) together with such distribution to each Unitholder as provided
for in (d) and (e), furnish to each such Unitholder a final distribution
statement as of the date of the computation of the amount distributable to
Unitholders, setting forth the data and information in substantially the
form and manner provided for in Section 3.06 hereof.
The amounts to be so distributed to each Unitholder shall be that pro rata
share of the balance of the total Interest and Principal Accounts as shall be
represented by the Units held of record by such Unitholder.
The Trustee shall be under no liability with respect to moneys held by it
in the Interest, Reserve and Principal Accounts upon termination except to hold
the same in trust without interest until disposed of in accordance with the
terms of this Indenture.
In the event that all of the Unitholders holding Certificates shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Unitholders to surrender their Certificates for
cancellation and receive the liquidating distribution with respect thereto. If
within one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee may take steps, or may appoint an
agent to take appropriate steps, to contact the remaining Unitholders concerning
surren der of their Certificates and the cost thereof shall be paid out of the
moneys and other assets which remain in the Trust hereunder.
Section 8.03. Construction. This Indenture is executed and delivered
in the State of New York, and all laws or rules of construction of such State
shall govern the rights of the parties hereto and the Unitholders and the
interpretation of the provisions hereof.
Section 8.04. Registration of Units. The Depositor agrees and
undertakes on its own part to register the Units with the Securities and
Exchange Commission or other applicable governmental agency, federal or state,
pursuant to applicable federal or state statutes, if such
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<PAGE>
registration shall be required, and to do all things that may be necessary or
required to comply with this provision during the term of the Trust created
hereunder, and the Trustee shall incur no liability or be under any obligation
for expenses in connection therewith.
Section 8.05. Written Notice. Any notice, demand, direction or
instruction to be given to the Depositor or the Evaluator hereunder shall be in
writing and shall be duly given if mailed or delivered to the Depositor, 77 West
Wacker Drive, Chicago, Illinois 60601-1994, or at such other address as shall be
specified by the Depositor or the Evaluator to the other parties hereto in
writing. Any notice, demand, direction or instruction to be given to the Trustee
hereunder shall be in writing and shall be duly given if mailed or delivered to
the corporate trust office of the Trustee at 101 Barclay Street, New York, New
York 10286, Attention: Unit Investment Trust Division, or at such other address
as shall be specified by the Trustee to the other parties hereto in writing.
Any notice to be given to the Unitholders shall be duly given if mailed or
delivered to each Unitholder at the address of such holder appearing on the
registration books of the Trustee.
Section 8.06. Severability. If any one or more of the covenants,
agreements, provisions or terms of this Indenture shall be held contrary to any
express provision of law or contrary to policy of express law, though not
expressly prohibited, or against public policy, or shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Indenture and shall in no way affect the validity or
enforceability of the other provisions of this Indenture or of the Certificates
or the rights of the Unitholders.
Section 8.07. Dissolution of Depositor Not to Terminate. The
dissolution of the Depositor from or for any cause whatsoever shall not operate
to terminate this Indenture or the Trust insofar as the duties and obligations
of the Trustee are concerned.
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<PAGE>
In Witness Whereof, EVEREN Securities, Inc., has caused this Trust
Indenture and Agreement to be executed by one of its Presidents or Vice
Presidents and The Bank of New York has caused this Trust Indenture and
Agreement to be executed by one of its Vice Presidents all as of the day, month
and year first above written.
EVEREN Securities, Inc., Depositor and
Evaluator
By____________________________________
President
The Bank of New York, Trustee
By____________________________________
Vice President
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<PAGE>
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 8, 1996
EVEREN Unit Investment Trusts
77 West Wacker Drive
Chicago, Illinois 60601
Re: EVEREN Unit Investment Trusts Series 47
---------------------------------------
Gentlemen:
We have served as counsel for EVEREN Unit Investment Trusts, as Sponsor and
Depositor of EVEREN Unit Investment Trusts Series 47 (the "Fund"), in connection
with the preparation, execution and delivery of Trust Agreements dated the date
of this opinion between EVEREN Unit Investment Trusts, as Depositor, and The
Bank of New York, as Trustee, pursuant to which the Depositor has delivered to
and deposited the Bonds listed in the Schedules to the Trust Agreement with the
Trustee and pursuant to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing all the Units of fractional
undivided interest in, and ownership of, the Fund, created under said Trust
Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the execution
and issuance of certificates evidencing the Units of the Fund have been
duly authorized; and
2. The certificates evidencing the Units of the Fund, when duly
executed and delivered by the Depositor and the Trustee in accordance with
the aforementioned Trust Agreement, will constitute valid and binding
obligations of the Fund and the Depositor in accordance with the terms
thereof.
<PAGE>
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We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-03141) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
<PAGE>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 8, 1996
EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
77 West Wacker Drive
Chicago, Illinois 60601
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: EVEREN Unit Investment Trusts Series 47
(Insured Corporate Series 9 and Insured Corporate Series 10)
Gentlemen:
We have acted as counsel for EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., as Sponsor and Depositor of EVEREN Unit Investment
Trusts Series 47 (the "Fund") containing Insured Corporate Series 9 and Insured
Corporate Series 10 (the "Trusts"), in connection with the issuance of Units of
fractional undivided interest in the Trust, under a Trust Agreement dated May 8,
1996 (the "Indenture") between EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., as Depositor and Evaluator, and The Bank of New York,
as Trustee.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent. The assets of the Trust will consist of portfolios of
intermediate and long-term corporate debt obligations issued by utility
companies (the "Corporate Bonds") and "Zero coupon" U.S. Treasury bonds (the
"Treasury Bonds") (collectively, the "Obligations") as set forth in the
Prospectus. All Obligations have been issued after July 18, 1984. For purposes
of the opinions set forth below, we have assumed that interest on each of the
Obligations is includable in gross income for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) The Trusts are not associations taxable as corporations for Federal
income tax purposes but will be governed by the provisions of subchapter J
(relating to Trusts) of chapter 1, Internal Revenue Code of 1986 (the
"Code").
(ii) Each Unitholder will be considered as owning a pro rata share of
each asset of the Trusts for Federal income tax purposes. Under subpart E,
<PAGE>
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subchapter J of chapter 1 of the Code, income of the Trusts will be treated
as income of each Unitholder. Each Unitholder will be considered to have
received his pro rata share of interest derived from each Trust asset
when such interest is received by the Trust. Each Unitholder will also be
required to include in taxable income for Federal income tax purposes,
original issue discount with respect to his interest in any Obligation held
by the Trust which was issued with original issue discount at the same time
and in the same manner as though the Unitholder were the direct owner of
such interest. Original issue discount will be treated as zero with
respect to Corporate Bonds if it is "de minimis" within the meaning of
Section 1273 of the Code and, based upon a Treasury Regulation (the
"Regulation") which was issued on December 28, 1992 regarding the stripped
bond rules of the Code, original issue discount with respect to a Treasury
Bond will be treated as zero if it is "de minimis" as determined
thereunder. If a Corporate Bond is a "high-yield discount obligation"
within the meaning of Section 163(e)(5) of the Code, certain special rules
may apply. A Unitholder may elect to include in taxable income for Federal
income tax purposes, market discount as it accrues with respect to his
interest in any Corporate Bond held by a Trust which he is considered as
having acquired with market discount at the same time and in the same
manner as though the Unitholder were the direct owner of such interest.
(iii) The price a Unitholder pays for his Units, generally including
sales charges, is allocated among his pro rata portion of each Obligation
held by a Trust (in proportion to the fair market values thereof on the
valuation date closest to the date the Unitholder purchases his Units), in
order to determine his tax basis for his pro rata portion of each
Obligation held by such Trust. The Treasury Bonds are treated as bonds
that were originally issued at an original issue discount. Because the
Treasury Bonds represent interests in "stripped" U.S. Treasury bonds, a
Unitholder's initial cost for his pro rata portion of each Treasury Bond
held by a Trust (determined at the time he acquires his Units, in the
manner described above) shall be treated as its "purchase price" by the
Unitholder. Under the special rules relating to stripped bonds, original
issue discount applicable to the Treasury Bonds is effectively treated as
interest for Federal income tax purposes and the amount of original issue
discount in this case is generally the difference between the Bond's
purchase price and its stated redemption price at maturity. A Unitholder
will be required to include in gross income for each taxable year the sum
of his daily portions of original issue discount attributable to the
Treasury Bonds held by a Trust as such original issue discount accrues and
will in general be subject to Federal income tax with respect to the total
amount of such original issue discount that accrues for such year even
though the income is not distributed to the Unitholders during such year to
the extent it is greater than or equal to the "de minimis" amount described
below. To the extent the amount of such discount is less than the
respective "de minimis" amount, such discount shall be treated as zero. In
<PAGE>
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general, original issue discount accrues daily under a constant interest
rate method which takes into account the semi-annual compounding of accrued
interest. In the case of Treasury Bonds this method will generally result
in an increasing amount of income to the Unitholders each year.
(iv) Each Unitholder will have a taxable event when the Trustee disposes
of a Trust asset (whether by sale, exchange, liquidation, redemption,
payment on maturity or otherwise) or when the Unitholder redeems or sells
his Units. A Unitholder's tax basis in his Unit will equal his tax basis
in his pro rata portion of all the assets of the Trust. Such basis is
determined (before the adjustments described below) by apportioning the tax
basis for his Units among each of the Trust assets according to their
values as of the valuation date nearest the date on which he purchased such
Units. Unitholders must reduce the tax basis of their Units for their
share of accrued interest received, if any, on Obligations delivered after
the date the Unitholders pay for their Units to the extent that such
interest accrued on such Oobligations during the period from the
Unitholder's settlement date to the date such Obligations are delivered to
the Trust and, consequently, such Unitholders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such
Units. Such gain or loss is measured by comparing the proceeds of such
redemption or sale with the adjusted basis of the Units. If the Trustee
disposes of Obligations (whether by sale, exchange, payment on maturity,
redemption or otherwise), gain or loss is recognized to the Unitholder
(subject to various nonrecognition 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 his basis for his
fractional interest in the asset disposed of. The basis of each Unit and of
each Obligation which was purchased by a Trust at a premium must be reduced
by the annual amortization of bond premium which the Unitholder has
properly elected to amortize under Section 170 of the Code. The tax basis
reduction requirements of the Code relating to amortization of bond premium
may, under some circumstances, result in the Unitholder realizing a taxable
gain when his Units are sold or redeemed for an amount equal to or less
than his original cost.
Each Unitholders pro rata share of each expense paid by the Trust is
deductible by the Unitholder to the same extent as though the expense had been
paid directly by him. It should be noted that as a result of the Tax Reform Act
of 1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
The Code provides a complex set of rules governing the accrual of original
issue discount, including special rules relating to "stripped" debt instruments
such as the Treasury
<PAGE>
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Bonds. These rules provide that original issue discount generally accrues on the
basis of a constant compound interest rate over the term of the Obligations.
Special rules apply if the purchase price of an Obligation exceeds its original
issue price plus the amount of original issue discount which would have
previously accrued, based upon its issue price (its "adjusted issue price").
Similarly, these special rules would apply to a Unitholder if the tax basis of
his pro rata portion of an Obligation issued with original issue discount
exceeds his pro rata portion of its adjusted issue price. In addition, as
discussed above, the Regulation provides that the amount of original issue
discount on a stripped bond is considered zero if the actual amount of original
issue discount on such stripped bond as determined under Section 1286 of the
Code is less than a "de minimis" amount, which, the Regulation provides, is the
product of (i) 0.25 percent of the stated redemption price at maturity and (ii)
the number of full years from the date the stripped bond is purchased
(determined separately for each new purchaser thereof) to the final maturity
date of the bond.
It is possible that a Corporate Bond that has been issued at an original
issue discount may be characterized as a "high-Yield" discount obligation"
within the meaning of Section 163(e)(5) of the Code. To the extent that such an
obligation is issued at a yield in excess of six percentage points over the
applicable Federal rate, a portion of the original issue discount on such
obligation will be characterized as a distribution on stock (e.g., dividends)
for purposes of the dividends received deduction which is available to certain
corporations with respect to certain dividends received by such corporations.
If a Unitholder's tax basis in his pro rata portion of any Corporate Bond
held by a Trust is less than his allocable portion of such Corporate Bond's
stated redemption price at maturity (or, if issued with original issue discount,
his allocable portion of its revised issue price), such difference will
constitute market discount unless the amount of market discount is "de minimis"
as specified in the Code. To the extent the amount of such discount is less than
the respective "de minimis" amount, such discount shall be treated as zero.
Market discount accrues daily computed on a straight line basis, unless the
Unitholder elects to calculate accrued market discount under a constant yield
method. The market discount rules do not apply to Treasury Bonds because they
are stripped debt instruments subject to special original issue discount rules
as discussed in paragraph (iii).
Accrued market discount is generally includible in taxable income of the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on Corporate Bonds held by a Trust, on the sale,
maturity or disposition of such Corporate Bonds by the Trust and on the sale of
a Unitholder's Units unless a Unitholder elects to include the accrued market
discount in taxable income as such discount accrues. If a Unitholder does not
elect to annually include accrued market discount in taxable income as it
accrues, deductions of any interest expense incurred by the Unitholder to
purchase or carry his Units will be reduced by such accrued market discount. In
general, the portion of any interest which is not currently deductible would
ultimately be deductible when the accrued market discount is included in income.
<PAGE>
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The tax basis of a Unitholder with respect to his interest in an Obligation
is increased by the amount of original issue discount (and market discount, if
the Unitholder elects to include market discount, if any, on the Obligations
held by the Trust in income as it accrues) thereon properly included in the
Unitholder's gross income as determined for Federal income tax purposes and
reduced by the amount of any amortized premium which the Unitholder has properly
elected to amortize under Section 171 of the Code. A Unitholder's tax basis in
his Units will equal his tax basis in his pro rata portion of all of the assets
of the Trust.
A Unitholder will recognize taxable gain (or loss) when all or part of the
pro rata interest in an Obligation is disposed of for an amount greater (or
less) than his tax basis therefor in a taxable transaction subject to various
non-recognition provisions of the Code.
As previously discussed, gain attributable to any Corporate Bond deemed to
have been acquired by the Unitholder with market discount will be treated as
ordinary income to the extent the gain does not exceed the amount of accrued
market discount not previously taken into income. The tax basis reduction
requirements of the Code relating to amortization of bond premium may, under
certain circumstances, result in the Unitholder realizing a taxable gain when
his Units are sold or redeemed for an amount equal to or less than his original
cost.
If a Unitholder disposes of a Unit, he is deemed thereby to have disposed
of his entire pro rata interest in all Trust assets including his pro rata
portion of all of the Corporate Bonds represented by the Unit. This may result
in a portion of the gain, if any, on such sale being taxable as ordinary income
under the market discount rules (assuming no election was made by the Unitholder
to include market discount in income as it accrues) as previously discussed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28 percent maximum
stated rate for taxpayers other than corporations. Because some or all capital
gains are taxed at a comparatively lower rate under the Tax Act, the Tax Act
includes a provision that recharacterizes capital gains as ordinary income in
the case of certain financial transactions that are "conversion transaction"
effective for transactions entered into after April 30, 1993.
A Unitholder who is a foreign investor (i.e., an investor other than a U.S.
citizen or resident or U.S. corporation, partnership, estate or trust) will not
be subject to United States Federal income taxes, including withholding taxes on
interest income (including any original issue discount) on, or any gain from the
sale or other disposition of his pro rata interest in any Obligation held by a
Trust or the sale of his Units provided that all of the following conditions are
met:
(i) the interest income or gain is not effectively connected with the
conduct by the foreign investor of a trade or business within the United
States;
<PAGE>
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(ii) if the interest is United States source income (which is the case
for most securities issued by United States issuers), the Obligation is
issued after July 18, 1984, the foreign investor does not own, directly or
indirectly, 10% or more of the total combined voting power of all classes
of voting stock of the issuer of the Obligation and the foreign investor is
not a controlled foreign corporation related (within the meaning of Section
864(d)(4) of the Code) to the issuer of the debt instrument, or
(iii) with respect to any gain, the foreign investor (if an individual)
is not present in the United States for 183 days or more during his or her
taxable year; and
(iv) the foreign investor provides all certification which may be
required of his status.
It should be noted that the "Revenue Reconciliation Act of 1993," includes
a provision which eliminates the exemption from United States taxation,
including withholding taxes, for certain "contingent interest." This provision
applies to interest received after December 31, 1993. No opinion is expressed
herein regarding the potential applicability of this provision and whether
United States taxation or withholding taxes could be imposed with respect to
income derived from the Units as a result thereof.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
MJK/ch
<PAGE>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 8, 1996
EVEREN Unit Investment Trusts
77 West Wacker Drive
Chicago, Illinois 60601
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: EVEREN Unit Investment Trusts Series 47
U.S. Treasury Portfolio, Series 17 and Series 18
Gentlemen:
We have acted as counsel for EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., Depositor of Everen Unit Investment Trusts Series 47,
U.S. Treasury Portfolio, Series 17 and U.S. Treasury Portfolio, Series 18 (the
"Trust Fund"), in connection with the issuance of Units of fractional undivided
interest in the Trust Funds, under a Trust Agreement, dated May 8, 1996 (the
"Indenture"), between Everen Unit Investment Trust Funds, as Depositor, and The
Bank of New York, as Trustee.
In this connection, we have examined the Registration Statement, the form
of Prospectus proposed to be filed with the Securities and Exchange Commission,
the Indenture and such other instruments and documents as we have deemed
pertinent.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable we are of the opinion that, under existing
Federal income tax law:
(i) The Trust Fund is not an association taxable as a corporation but
will be governed by the provisions of Subchapter J (relating to Trust
Funds) of Chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered the owner of a pro rata
portion of each U.S. Treasury Obligation in the Trust Fund and will be
considered to have received the interest on his pro rata portion of each
U.S. Treasury Obligation when interest on such U.S. Treasury Obligation is
received by the Trust Fund. Each Unitholder will also be required to
include in taxable income for federal income tax purposes, original issue
discount with respect to his interest in any U.S. Treasury Obligation held
by the Trust Fund which was issued with original issue discount at the
<PAGE>
-2-
same time and in the same manner as though the Unitholder were the direct
owner of such interest. Original issue discount will be treated as zero
with respect to the U.S. Treasury Obligations if it is "de minimis" within
the meaning of Section 1273 of the Code and, based upon a Treasury
Regulation (the "Regulation") which was issued on December 28, 1992
regarding the stripped bond rules of the Code, original issue discount with
respect to a Stripped Treasury Security will be treated as zero if it is
"de minimis" as determined thereunder.
(iii) Each Unitholder will be considered the owner of a pro rata
portion of each asset in the Trust Fund. The total cost to a Unitholder of
his Units, including sales charges, is allocated among his pro rata portion
of each asset held by the Trust Fund (in proportion to the fair market
values thereof on the date the Unitholder purchases Units) in order to
determine his initial tax basis for his pro rata portion of each asset held
by the Trust Fund. The basis of each Unit and of each U.S. Treasury
Obligation which was issued with original issue discount must be increased
by the amount of accrued original issue discount and the basis of each
Unit and of each U.S. Treasury Obligation which was purchased by the Trust
Fund at a premium must be reduced by the annual amortization of bond
premium which the Unitholder has properly elected to amortize under Section
171 of the Code. The Stripped Treasury Securities are treated as bonds
that were originally issued at an original issue discount. Because the
Stripped Treasury Securities represent interests in "stripped" U.S.
Treasury bonds, a Unitholder's initial cost for his pro rata portion of
each Stripped Treasury Security held by the Trust Fund (determined at the
time he acquires his units, in the manner described above) shall be treated
as its "purchase price" by the Unitholder. Under the special rules
relating to stripped bonds, original issue discount applicable to the
Stripped Treasury Securities is effectively treated as interest for Federal
income tax purposes and the amount of original issue discount in this case
is generally the difference between the bond's purchase price and its
stated redemption price at maturity. A Unitholder will be required to
include in gross income for each taxable year the sum of his daily portions
of original issue discount attributable to the Stripped Treasury Securities
held by the Trust Fund as such original issue discount accrues and will in
general be subject to Federal income tax with respect to the total amount
of such original issue discount that accrues for such year even though the
income is not distributed to the Unitholders during such year to the extent
it is greater than or equal to the "de minimis" amount described above. To
the extent the amount of such discount is less than the respective "de
minimis" amount, such discount shall be treated as zero. In general,
original issue discount accrues daily under a constant interest rate method
which takes into account the semi-annual compounding of accrued interest.
In the case of Stripped Treasury Securities this method will generally
result in an increasing amount of income to the Unitholders each year. A
Unitholder's tax basis for his pro rata portion of each asset held by the
Trust Fund may be subject to adjustment as discussed in paragraph (v)
hereof.
<PAGE>
-3-
(iv) The Unitholder's aliquot share of the total proceeds received on
the disposition of, or principal paid with respect to, a U.S. Treasury
Obligation held by the Trust Fund will constitute ordinary income (which
will be treated as interest income for most purposes) to the extent it does
not exceed the accrued market discount on such U.S. Treasury Obligation
that has not previously been included in taxable income by such Unitholder.
A Unitholder may generally elect to include market discount in income as
such discount accrues. In general, market discount is the excess, if any,
of the Unitholder's pro rata portion of the outstanding principal balance
of a U.S. Treasury Obligation over the Unitholder's initial tax cost for
such pro rata portion, determined at the time such Unitholder acquires his
Units. However, market discount with respect to any U.S. Treasury
Obligation will generally be considered zero if it does not exceed the
statutorily defined "de minimis" amount. The market discount rules do not
apply to Stripped Treasury Securities because they are stripped debt
instruments subject to special original issue discount rules as discussed
above. If a Unitholder sells his Units, gain, if any, will constitute
ordinary income to the extent of the aggregate of the accrued market
discount on the Unitholder's pro rata portion of each U.S. Treasury
Obligation that is held by the Trust Fund that has not previously been
included in taxable income by such Unitholder. In general, market discount
accrues on a ratable basis unless the Unitholder elects to accrue such
discount on a constant interest rate basis. However, no opinion is
expressed herein regarding the precise manner in which market discount
accrues. The deduction by a Unitholder for any interest expense incurred to
purchase or carry Units will be reduced by the amount of any accrued market
discount that has not yet been included in taxable income by such
Unitholder. In general, the portion of any interest expense which is not
currently deducible would be ultimately deductible when the accrued market
discount is included in income.
(v) As discussed in paragraph (iv) hereof, if a Unitholder sells his
Units, gain, if any, will constitute ordinary income to the extent of the
aggregate of the accrued market discount (which has not previously been
included in such Unitholder's taxable income) with respect to the
Unitholder's pro rata portion of each U.S. Treasury Obligation held by the
Trust Fund. Any other gains (or losses) will be capital gains (or losses)
except in the case of a dealer or a financial institution, and will be
long-term if the Unitholder has held his Units for more than one year. A
Unitholder will recognize taxable gains (or losses) (a) upon redemption or
sale of his Units, (b) if the Trustee disposes of an asset or (c) upon
receipt by the Trustee of payments of principal on the U.S. Treasury
Obligations. The amount of any such gain (or loss) is measured by
comparing the Unitholder's pro rata share of the total proceeds from the
transaction with his adjusted tax basis in his Units or his pro rata
interest in the asset as the case may be, and then reducing such gain, if
any, to the extent characterized as ordinary income resulting from accrued
market discount as discussed above. A Unitholder's tax basis in his Units
and his pro rata portion of each of the underlying assets of the Trust Fund
may be adjusted to reflect the accrual of market discount (if the
Unitholder has elected to include such discount in income as it
<PAGE>
-4-
accrues), original issue discount and amortized bond premium, if any. The
tax cost reduction requirements of said Code relating to amortization of
bond premium may, under some circumstances, result in the Unitholder
realizing a taxable gain when his Units are sold or redeemed for an amount
equal to his original cost. In addition, Unitholders must reduce the tax
basis of their Units and their pro rata portion of the underlying assets of
the Trust Fund for their share of accrued interest received by the Trust
Fund, if any, on U.S. Treasury Obligations delivered after the Unitholders
pay for their Units to the extent that such interest accrued on such U.S.
Treasury Obligations during the period from the Unitholder's settlement
date to the date such U.S. Treasury Obligations are delivered to the Trust
Fund and, consequently, such Unitholders may have an increase in taxable
gain or reduction in capital loss upon the disposition of such Units or
such U.S. Treasury Obligations.
(vi) The Code provides that "miscellaneous itemized deductions" are
allowable only to the extent that they exceed two percent of an individual
taxpayer's adjusted gross income. Miscellaneous itemized deductions
subject to this limitation under present law include a Unitholder's pro
rata share of expenses paid by the Trust Fund, including fees of the
Trustee and the Evaluator but does not include amortizable bond premium on
U.S. Treasury Obligations held by the Trust Fund.
For taxable years beginning after December 31, 1986 and before January 1,
1996, certain corporations may be subject to the environmental tax (the
"Superfund Tax") imposed by Section 59A of the Code. Interest received from,
and gains recognized from the disposition of, a security by the Trust Fund or
the sale of Units by a Unitholder will be included by such corporations in the
computation of the Superfund Tax. Under current Code provisions, the Superfund
Tax does not apply to tax years beginning on or after January 1, 1996. However,
the Superfund Tax could be extended retroactively.
A Unitholder who is a foreign investor (i.e., an investor other than a U.S.
citizen or resident or U.S. corporation, partnership, estate or trust) will not
be subject to United States Federal income taxes, including withholding taxes on
interest income (including any original issue discount) on, or any gain from the
sale or other disposition or redemption of a U.S. Treasury Obligation held by
the Trust Fund or the sale of his Units provided that all of the following
conditions are met:
(i) the interest income or gain is not effectively connected with
the conduct by the foreign investor of a trade or business within the
United States;
(ii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more during
his or her taxable year;
(iii) the U.S. Treasury Obligation was issued after July 18, 1984;
and
<PAGE>
-5-
(iv) the foreign investor provides all certification which may be
required of his status and of the matters contained in clauses (i) and (ii)
above.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including state or local taxes or collateral tax
consequences with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-03141) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
<PAGE>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 8, 1996
EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Everen Unit Investment Trusts Series 47
(Insured Michigan Series 14)
Gentlemen:
We have acted as counsel for Everen Unit Investment Trusts, Depositor of
Everen Unit Investment Trusts Series 47 (the "Fund") containing Insured Michigan
Series 14 (the "Trust Fund"), in connection with the issuance of Units of
fractional undivided interest in the Trust Fund of said Fund under the Trust
Agreement dated May 8, 1996 (the "Indenture") between EVEREN Unit Investment
Trusts, as Depositor and Evaluator and The Bank of New York, as Trustee.
In this connection, we have examined the Registration Statement, the form
of Prospectus proposed to be filed with the Securities and Exchange Commission,
the Indenture and such other instruments and documents as we have deemed
pertinent.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) Each Trust Fund is not an association taxable as a corporation but
will be governed by the provisions of subchapter J (relating to trusts) of
chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata share of
each asset of the respective Trust Fund in the proportion that the number
of Units of such Trust Fund held by him bears to the total number of Units
outstanding of
<PAGE>
-2-
such Trust Fund. Under subpart E, subchapter J of chapter 1 of the Code,
income of each Trust Fund will be treated as income of each Unitholder of
the respective Trust Fund in the proportion described, and an item of Trust
Fund income will have the same character in the hands of a Unitholder as it
would have in the hands of the Trustee. Accordingly, to the extent that the
income of a Trust Fund consists of interest and original issue discount
excludable from gross income under Section 103 of the Code, such income
will be excludable from Federal gross income of the Unitholders, except in
the case of a Unitholder who is a substantial user (or a person related to
such user) of a facility financed through issuance of any industrial
development bonds or certain private activity bonds held by the respective
Trust Fund. In the case of such Unitholder (and no other) interest received
with respect to his Units attributable to such industrial development bonds
or such private activity bonds is includable in his gross income. In the
case of certain corporations, interest on the Bonds is included in
computing the alternative minimum tax pursuant to Section 56(c) of the
Code, the environmental tax (the "Superfund Tax") imposed by Section 59A of
the Code, and the branch profits tax imposed by Section 884 of the Code
with respect to U.S. branches of foreign corporations.
(iii) Gain or loss will be recognized to a Unitholder upon redemption or
sale of his Units. Such gain or loss is measured by comparing the proceeds
of such redemption or sale with the adjusted basis of the Units represented
by his Unit. Before adjustment, such basis would normally be cost if the
Unitholder had acquired his Units by purchase, plus his aliquot share of
advances by the Trustee to a Trust Fund to pay interest on Bonds delivered
after the Unitholder's settlement date to the extent that such interest
accrued on the Bonds during the period from the Unitholder's settlement
date to the date such Bonds are delivered to the respective Trust Fund, but
only to the extent that such advances are to be repaid to the Trustee out
of interest received by such Trust Fund with respect to such Bonds. In
addition, such basis will be increased by the Unitholder's aliquot share of
the accrued original issue discount (and market discount, if the Unitholder
elects to include market discount in income as it accrues) with respect to
each Bond held by a Trust Fund with respect to which there was an original
issue discount at the time the Bond was issued (or which was purchased with
market discount) and reduced by the annual amortization of bond premium, if
any, on Bonds held by the Trust Fund.
(iv) If the Trustee disposes of a Trust Fund asset (whether by sale,
payment on maturity, redemption or otherwise) gain or loss is recognized to
the Unitholder and the amount thereof is measured by comparing the
Unitholder's aliquot share of the total proceeds from the transaction with
his basis for his fractional interest in the asset disposed of. Such basis
is ascertained by apportioning the tax basis for his Units among each of
the Trust Fund assets (as of the date on which his Units were acquired)
ratably according to their values
<PAGE>
-3-
as of the valuation date nearest the date on which he purchased such Units.
A Unitholder's basis in his Units and of his fractional interest in each
Trust Fund asset must be reduced by the amount of his aliquot share of
interest received by the Trust Fund, if any, on bonds delivered after the
Unitholder's settlement date to the extent that such interest accrued on
the Bonds during the period from the Unitholder's settlement date to the
date such Bonds are delivered to the Trust Fund, must be reduced by the
annual amortization of bond premium, if any, on Bonds held by the Trust
Fund and must be increased by the Unitholder's share of the accrued
original issue discount (and market discount if the Unitholder elects to
include market discount in income as it accures) with respect to each Bond
which, at the time the Bond was issued, had original issue discount (or
which was purchased with market discount).
(v) In the case of any Bond held by the Trust Fund where the "stated
redemption price at maturity" exceeds the "issue price", such excess shall
be original issue discount. With respect to each Unitholder, upon the
purchase of his Units subsequent to the original issuance of Bonds held by
the Trust Fund, Section 1272(a)(7) of the Code provides for a reduction in
the accrued "daily portion" of such original issue discount upon the
purchase of a Bond subsequent to the Bond's original issue, under certain
circumstances. In the case of any Bond held by the Trust Fund the interest
on which is excludable from gross income under Section 103 of the Code, any
original issue discount which accrues with respect thereto will be treated
as interest which is excludable from gross income under Section 103 of the
Code.
(vi) Certain bonds in the portfolios of certain of the Trust Fund have
been insured by the issuers thereof against default in the prompt payment
of principal and interest. Insurance has been obtained for such bonds, or,
in the case of a commitment, the bonds will be ultimately insured under the
terms of such an insurance policy, which are designated as issuer insured
bonds on the portfolio pages of the respective Trust Fund in the prospectus
for a Trust Fund, by the issuer of such bonds. Insurance obtained by the
issuer is effective so long as such bonds remain outstanding. For each of
these bonds, we have been advised that the aggregate principal amount of
such bonds listed on the portfolio page for the respective Trust Fund was
acquired by the applicable Trust Fund and are part of the series of such
bonds listed on the portfolio page for the respective Trust Fund in the
aggregate principal amount listed on the portfolio page for the respective
Trust Fund. Based upon the assumption that the bonds acquired by the
applicable Trust Fund are part of the series covered by an insurance policy
or, in the case of a commitment, will be ultimately insured under the terms
of such an insurance policy, it is our opinion that any amounts received by
the applicable Trust Fund representing maturing interest on such bonds will
be excludable from federal gross income if, and to the same extent as, such
interest would have been so excludable if paid in normal course by the
<PAGE>
-4-
Issuer provided that, at the time such policies are purchased, the amounts
paid for such policies are reasonable, customary and consistent with the
reasonable expectation that the Issuer of the bonds, rather than the
insurer, will pay debt service on the bonds. Paragraph (ii) of this
opinion is accordingly applicable to such payment.
Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original issue
discount accrues either on the basis of a constant compound interest rate or
ratably over the term of the Bond, depending on the date the Bond was issued.
In addition, special rules apply if the purchase price of a Bond exceeds the
original issue price plus the amount of original issue discount which would have
previously accrued based upon its issue price (its "adjusted issue price"). The
application of these rules will also vary depending on the value of the bond on
the date a Unitholder acquires his Units, and the price the Unitholder pays for
his Units.
Because the Trust Funds do not include any "private activity" bonds within
the meaning of Section 57 (a)(5) of the Code issued on or after August 8, 1986,
none of the Trust Funds' interest income shall be treated as an item of tax
preference when computing the alternative minimum tax. In the case of
corporations, for taxable years beginning after December 31, 1986, the
alternative minimum tax and the Superfund Tax depend upon the corporation's
alternative minimum taxable income ("AMTI") which is the corporation's taxable
income with certain adjustments.
Pursuant to Section 56(c) of the Code, one of the adjustment items used in
computing AMTI and the Superfund Tax of a corporation (other than an S
Corporation, Regulated Investment Company, Real Estate Investment Trust or
REMIC) for taxable years beginning after 1989, is an amount equal to 75% of the
excess of such corporation's "adjusted current earnings" over an amount equal to
its AMTI (before such adjustment item and the alternative tax net operating loss
deduction). "Adjusted current earnings"
includes all tax-exempt interest, including interest on all Bonds in a
Trust Fund, and tax-exempt original issue discount. Under current Code
provisions, the Superfund Tax does not apply to tax years beginning on or after
January 1, 1996. However, the Superfund Tax could be extended retroactively.
Effective for tax returns filed after December 31, 1987, all taxpayers are
required to disclose to the Internal Revenue Service the amount of tax-exempt
interest earned during the year.
Section 265 of the Code provides for a reduction in each taxable year of
100 percent of the otherwise deductible interest on indebtedness incurred or
continued by financial institutions, to which either Section 585 or Section 593
of the Code applies, to purchase or carry obligations acquired after August 7,
1986, (with certain exceptions) the interest on which is exempt from Federal
income taxes for such taxable year. Under rules prescribed
<PAGE>
-5-
by Section 265, the amount of interest otherwise deductible by such financial
institutions in any taxable year which is deemed to be attributable to tax-
exempt obligations acquired after August 7, 1986, will be the amount that bears
the same ratio to the interest deduction otherwise allowable (determined without
regard to Section 265) to the taxpayer for the taxable year as the taxpayer's
average adjusted basis (within the meaning of Section 1016) of tax-exempt
obligations acquired after August 7, 1986, bears to such average adjusted basis
for all assets of the taxpayer, unless such financial institution can otherwise
establish, under regulations, to be prescribed by the Secretary of the Treasury,
the amount of interest on indebtedness incurred or continued to purchase or
carry such obligations. On December 7, 1995 the U.S. Treasury Department
released proposed legislation that, if adopted, would generally extend the
financial institution rules to all corporations, effective for obligations
acquired after the date of announcement.
We also call attention to the fact that, under Section 265 of the Code,
interest on indebtedness incurred or continued to purchase or carry Units is not
deductible for Federal income tax purposes. Under rules used by the Internal
Revenue Service for determining when borrowed funds are considered used for the
purpose of purchasing or carrying particular assets, the purchase of Units may
be considered to have been made with borrowed funds even though the borrowed
funds are not directly traceable to the purchase of Units. However, these rules
generally do not apply to interest paid on indebtedness incurred for
expenditures of a personal nature such as a mortgage incurred to purchase or
improve a personal residence.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects tax-
exempt bonds to the market discount rules of the Code effective for bonds
purchased after April 30, 1993. In general, market discount is the amount (if
any) by which the stated redemption price at maturity exceeds an investor's
purchase price (except to the extent that such difference, if any, is
attributable to original issue discount not yet accrued) subject to a statutory
de minimis rule. Market discount can arise based on the price a Trust Fund
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 Fund holds a Bond would be recognized as ordinary income
by the Unitholders when principal payments are received on the Bonds, 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.
<PAGE>
-6-
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including state or local taxes or collateral tax
consequences with respect to the purchase, ownership and disposition of Units.
Very truly yours,
CHAPMAN AND CUTLER
MJK/ch
<PAGE>
Exhibit 3.2
Miller, Canfield, Paddock and Stone, P.L.C.
1400 North Woodward Avenue
Bloomfield Hills, Michigan 48303-2014
May 8, 1996
EVEREN Unit Investment Trusts, a division
of EVEREN Securities, Inc.
77 West Wacker Drive
Chicago, Illinois 60601
The Bank of New York through its
Wall Street Trust division as
Trustee of the EVEREN Unit Investment
Trusts, Series 47
101 Barclay Street
New York, New York 10286
Re: EVEREN Unit Investment Trusts, Series 47
Insured Michigan Series 14
Gentlemen:
We have acted as special Michigan counsel to you as Depositor and Trustee
of EVEREN Unit Investment Trusts, Series 47 - Insured Michigan Series 14 (the
"Insured Michigan Trust") referred to above (the "Fund") . You have asked that
we, acting in such capacity, render an opinion to you with respect to certain
matters relating to the issuance of the units of fractional undivided interest
in the Fund (the "Units") pursuant to a Registration Statement on Form S-6 filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Registration Statement").
You have requested our opinion as to the applicability to the Insured
Michigan Trust (the "Michigan Trust") and the holders of Units (the
"Unitholders") , each of which Units represents the ownership of a specified
fractional undivided interest in the assets of the Michigan Trust, of the
Michigan Income Tax Act (M.C.L.A. (S)(S)206.1 et seq.; M.S.A. (S)(S)7.557(101)
et seq.) (the "Michigan Income Tax"), the City Income Tax Act (M.C.L.A.
(S)(S)141.501 et seq.; M.S.A. (S)(S)5.3194(1) et seq.) , which incorporates the
"Uniform City Income Tax ordinance," the First Class School District excise tax
upon income (M.C.L.A. (S)380.451; M.S.A. (S)(S)15.4451) (collectively, the
"income tax laws"), the Michigan Single Business Tax Act (M.C.L.A. (S)(S)208.1
et seq.; M.S.A. (S)(S)7.558(1) et seq.) (the "Single Business Tax") and the
Michigan Tax on ownership of Intangible Personal Property (M.C.L.A.
(S)(S)205.131 et seq.; M.S.A. (S)(S)7.556(1) et seq.) (the "Intangibles Tax").
The Intangibles Tax is being phased out, with reductions of twenty-five percent
(25%) in 1994 and 1995, fifty percent (50%) in 1996, and seventy-five percent
(75%) in 1997, with total repeal effective January 1, 1998 PA 4 and 5). You
have also requested our opinion
<PAGE>
Miller, Canfield, Paddock and Stone
May 8, 1996
Page 2
regarding the tax status of proceeds payable from an insurance policy to be
obtained by either the Fund or by the issuer of the Bonds involved, guaranteeing
prompt payment of principal and interest on all Bonds in the portfolio of the
Fund.
The Michigan Trust, its formation, its proposed method of operation, the
rights of owners of Certificates representing Units, the nature of such
ownership and the portfolio of investments of the Michigan Trust are described
and set forth in the Prospectus dated May 8, 1996, filed with the Securities and
Exchange Commission in Registration No. 333-03141. In giving our opinion set
forth hereunder, we have relied upon the facts contained in such Registration
Statement, including the fact that, at the respective dates of issuance of the
underlying Debt Obligations, opinions of bond counsel to the respective Michigan
authorities issuing such Debt Obligations were given with respect to the
validity of the Debt obligations and the exemption of the same, and of the
interest thereon, from Michigan taxation.
Based on the above, it is our opinion that:
The Michigan Trust and the owners of Units will, in our opinion, be treated
for purposes of the Michigan income tax laws and the Single Business Tax in
substantially the same manner as they are for purposes of the Federal income tax
laws, as currently enacted. Accordingly, we have relied upon the opinion of
Messrs. Chapman and Cutler as to the applicability of Federal income tax under
the Internal Revenue Code of 1986, as currently amended, to the Michigan Trust
and the Unitholders.
Under the income tax laws of the State of Michigan, the Michigan Trust is
not an association taxable as a corporation; the income of the Michigan Trust
will be treated as the income of the Unitholders of the Michigan Trust and be
deemed to have been received by them when received by the Michigan Trust.
Interest on the Debt Obligations in the Michigan Trust which is exempt from tax
under the Michigan income tax laws when received by the Michigan Trust will
retain its status as tax exempt interest to the Unitholders of the Michigan
Trust.
For purposes of the Michigan income tax laws, each Unitholder of the
Michigan Trust will be considered to have received his pro rata share of
interest on each Debt Obligation in the Michigan Trust when it is received by
the Michigan Trust, and each Unitholder will have a taxable event when the
Michigan Trust disposes of a Debt Obligation (whether by sale, exchange,
redemption or payment at maturity) or when the Unitholder redeems or sells his
Unit, to the extent the transaction constitutes a taxable event for Federal
income tax purposes. The tax cost of each Unit to a Unitholder will be
established and allocated for purposes of the Michigan income tax laws in the
same manner as such cost is established and allocated for Federal income tax
purposes.
Under the Michigan Intangibles Tax, the Michigan Trust is not taxable and
the pro rata ownership of the underlying Debt Obligations, as well as the
interest thereon, will be exempt to the Unitholders to the extent the Michigan
Trust consists of obligations of the
<PAGE>
Miller, Canfield, Paddock and Stone
May 8, 1996
Page 3
State of Michigan or its political subdivisions or municipalities, or of
obligations of the Commonwealth of Puerto Rico, Guam or of the United States
Virgin Islands.
The Michigan Single Business Tax replaced the tax on corporate and
financial institution income under the Michigan Income Tax, and the intangible
tax with respect to those intangibles of persons subject to the Single Business
Tax the income from which would be considered in computing the Single Business
Tax. Persons are subject to the Single Business Tax only if they are engaged in
"business activity," as defined in the Act. Under the Single Business Tax,
both interest received by the Michigan Trust on the underlying Debt Obligations
and any amount distributed from the Michigan Trust to a Unitholder, if not
included in determining taxable income for Federal income tax purposes, is also
not included in the adjusted tax base upon which the Single Business Tax is
computed, of either the Michigan Trust or the Unitholders. If the Michigan
Trust or the Unitholders have a taxable event for Federal income tax purposes
when the Michigan Trust disposes of a Debt Obligation (whether by sale,
exchange, redemption or payment at maturity) or the Unitholder redeems or sells
his Unit, an amount equal to any gain realized from such taxable event which was
included in the computation of taxable income for Federal income tax purposes
(plus an amount equal to any capital gain of an individual realized in
connection with such event but excluded in computing that individual's Federal
taxable income) will be included in the tax base against which, after
allocation, apportionment and other adjustments, the Single Business Tax is
computed. The tax base will be reduced by an amount equal to any capital loss
realized from such a taxable event, whether or not the capital loss was deducted
in computing Federal taxable income in the year the loss occurred. Unitholders
should consult their tax advisor as to their status under Michigan law.
Any proceeds paid under an insurance policy issued to the Trustee of the
Fund, or paid under individual policies obtained by issuers of Bonds, which,
when received by the Unitholders, represent maturing interest on defaulted
obligations held by the Trustee, will be excludable from the Michigan income tax
laws and the Single Business Tax if, and to the same extent as, such interest
would have been so excludable if paid by the issuer of the defaulted
obligations. While treatment under the Michigan Intangibles Tax is not premised
upon the characterization of such proceeds under the Internal Revenue Code, the
Michigan Department of Treasury should adopt the same approach as under the
Michigan income tax laws and the Single Business tax.
Chapman and Cutler of 111 West Monroe Street, Chicago, Illinois 60603, are
entitled to rely on this opinion as though it were addressed to them.
We also advise you that, as the Tax Reform Act of 1986 eliminates the
capital gain deduction for tax years beginning after December 31, 1986, the
federal adjusted gross income, the computation base for the Michigan Income Tax,
of a Unitholder will be increased accordingly to the extent such capital gains
are realized when the Michigan Trust disposes of a Debt obligation or when the
Unitholder redeems or sells a Unit, to the extent such transaction constitutes a
taxable event for Federal income tax purposes.
<PAGE>
Miller, Canfield, Paddock and Stone
May 8, 1996
Page 4
We hereby consent to the reference to Miller, Canfield, Paddock and Stone
under the heading "Michigan Tax Status" in the Prospectus relating to the
Michigan Trust which is part of the Registration Statement in Registration No.
333-03141 filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and to the filing of this opinion as an exhibit to said
registration statement.
Yours very truly,
Miller, Canfield, Paddock and Stone, P.L.C.
<PAGE>
EXHIBIT 4.1
STANDARD & POOR'S,
A DIVISION OF McGRAW-HILL, INC.
25 Broadway
New York, New York 10004-1064
Telephone 212/208-1740
FAX 212/208-8262
Sanford B. Bragg
Managing Director
Managed Funds Ratings Services
Everen Unit Investment Trusts
77 West Wacker Drive - 29th Floor
Chicago, IL 60601
Re: Everen Unit Investment Trusts Series 47, containing: Insured Corporate
Series 9, Insured Corporate Series 10 and Insured Michigan Series 14
Pursuant to your request for a Standard & Poor's rating on the
units of the above-captioned Trust, SEC #333-03141, we have reviewed the
information presented to us and have assigned a 'AAA' rating to the units of the
Trust and a 'AAA' rating to the securities contained in the Trust. The ratings
are direct reflections of the portfolios of the Trust, which will be composed
solely of securities covered by bond insurance policies that insure against
default in the payment of principal and interest on the securities so long as
they remain outstanding. Since the policies on the insured securities have been
issued by one or more insurance companies which have been assigned 'AAA' claims
paying ability ratings by Standard & Poor's, Standard & Poor's has assigned a
'AAA' rating to the units of the Trust and to the securities contained in the
Trust.
You have permission to use the name of Standard & Poor's and the
above-assigned ratings in connection with your dissemination of information
relating to these units, provided that it is understood that the ratings are not
"market" ratings nor recommendations to buy, hold, or sell the units of the
trusts or the securities contained in the trusts. Further, it should be
understood the rating on the units does not take into account the extent to
which trust expenses or portfolio asset sales for less than the trust's purchase
price will reduce payment to the unit holders of the interest and principal
required to be paid on the portfolio assets. S&P reserves the right to advise
its own clients, subscribers, and the public of the ratings. S&P relies on the
sponsor and its counsel, accountants, and other experts for the accuracy and
completeness of the information submitted in connection with the ratings. S&P
does not independently verify the truth or accuracy of any such information.
This letter evidences our consent to the use of the name of Standard &
Poor's in connection with the rating assigned to the units in the registration
statement or prospectus relating to the units or the trusts. However, this
letter should not be construed as a consent by us, within the meaning of Section
7 of the Securities Act of 1933, to the use of the name of Standard & Poor's
Ratings Group in connection with the ratings assigned to the securities
contained in the trusts. You are hereby authorized to file a copy of this letter
with the Securities and Exchange Commission.
Please be certain to send us three copies of your final prospectus as
soon as it becomes available. Should we not receive them within a reasonable
time after the closing or should they not conform to the representations made to
us, we reserve the right to withdraw the rating.
<PAGE>
We are pleased to have had the opportunity to be of service to you.
If we can be of further help, please do not hesitate to call upon us.
Sincerely,
/s/ Sanford Bragg/WD
<PAGE>
EXHIBIT 4.2
[CANTOR FITZGERALD LOGO AND LETTERHEAD]
EVEREN Securities, Inc.
Unit Trust Department 29th Floor
77 West Wacker Drive
Chicago, Illinois 60601
Re: EVEREN Unit Investment Trusts, Series 47
Gentlemen:
You have provided to us and we have examined Registration Statement File No.
333-00065 for the above captioned trust. We hereby acknowledge that Cantor
Fitzgerald & Co. ("Cantor") will act as the evaluator for the trust pursuant to
the terms and conditions of the Information Evaluation Service Agreement between
Cantor and EVEREN Securities, Inc. ("EVEREN") dated as of October 13, 1996 (the
"IES Agreement"). We hereby consent to the use in the Registration Statement of
the reference to Cantor Fitzgerald & Co. as evaluator.
You acknowledge that this letter shall not confer upon you any rights or impose
on Cantor any obligations, other than those expressly set forth in the IES
Agreement.
You are hereby authorized to file a copy of this letter with the Securities and
Exchange Commission.
Very truly yours,
CANTOR FITZGERALD & CO.,
By: /s/ Debra Walton
Debra Walton
Managing Director
Acknowledged and Agreed:
EVEREN SECURITIES, INC.
By:
[CANTOR FITZGERALD LETTERHEAD]
<PAGE>
EXHIBIT 4.3
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
-------------------------------------------------
We have issued our report dated May 8, 1996 on the statement of condition
and related bond portfolio of EVEREN Unit Investment Trusts Series 47 as of May
8, 1996 contained in the Registration Statement on Form S-6 and in the
Prospectus. We consent to the use of our report in the Registration Statement
and in the Prospectus and to the use of our name as it appears under the caption
"General Information-Independent Certified Public Accountants".
GRANT THORNTON LLP
Chicago, Illinois
May 8, 1996
